People often ask us how to pick a Forex broker that allows you to trade forex online. We will share with you what we believe is important information about selecting a forex broker.
Low spreads or transaction fees
Forex trading online costs are shown in pips. The higher the spread, Spreads average between 2-5pips. Brokers that offer forex spreads as low as 0 pip need to be cautious. They might charge fees in other ways.
Margin Requirements or Leverage Options
Leverage may be either a good thing or a problem depending on the way you use it. Better brokers will have different leverage options. That means you can choose from a range of leverage ratios. Perhaps a 400% leverage ratio is too high. Does the broker offer a 200/1 or 100/1 option? Forex brokers need to be able provide the leverage values that you are looking for.
The majority of forex brokers online pay interest on traders’ margin accounts. Keep in mind that many forex brokers won’t allow you accrue interest unless the margin requirement is at minimum 2% (50/1).
Customer Service for Forex Brokers
Customer service is the most valuable thing you can have, especially online forex trading. Even if your broker doesn’t offer it, you should have at least some basic service requirements. What is the availability of 24-hour support for Forex brokers? Are they available by phone or email? Email? Chat? Chat? It is possible that the service you receive might be better than what you get when you fund your real money account. If that is the situation, it is best to withdraw your money immediately and to find another forex broker.
Forex Broker Quality
It is essential to find a reliable broker. Forex brokers aren’t required to register with or be regulated with any agency. Forex is an unregulated market. The best brokers will register as Futures Commission Merchants and be regulated by both the Commodity Futures Trading Commission, CFTC, and the National Futures Association (NFA).
Forex Brokers Trading Tools and Research
Better brokers offer trading tools to help their clients forex trade. Most brokers will provide some sort of research, or have it displayed on their trading websites.
Online Forex Trading Platform
Forex brokers allow trading on the Internet, with most, if no, exceptions. Software system is the foundation of any forex trading platform.