This article will help you select the online broker that fits your needs in the best manner, by depicting the most important parameters to look at when choosing an online forex broker and introducing a list of providers who rank the highest in these parameters.
When choosing among the many online brokers currently available for currency trading, a number of important considerations need to be taken into account. First of all, the most significant factor to assess is whether or not your funds deposited as margin will be safe with the forex broker you eventually select.
Once you are comfortable that a short list of online forex brokers are safe to do business with, you will probably want to rank them to assist in your decision making process depending on which characteristics are most important to the future success of your trading business.
For example, you can assess each provider's suitability with respect to the following key factors that many traders consider:
A number of purported currency trading brokers have set up fancy websites but might actually be dishonest in key business matters or even outright frauds simply hoping to separate you from your money. By carefully checking a provider's reputation among their customers by reviewing posts in online discussion forums you can often get a better sense for whether a particular online forex broker is going to be a good business partner for you.
Commissions assessed on a per trade basis can really add up for more active traders and so look for an online forex broker who does not charge commissions. The other important factor in a pricing is the width of their dealing spread in the currency pairs that you are most interested in trading.
Some sites use a dealing desk to handle client transactions, whereas many do not and are instead called NDD or No Dealing Desk brokers. Furthermore, some providers use an Electronic Communications Network or ECN to obtain an electronic pricing and execution service for their clients, while others use Straight Through Processing or STP to further automate the foreign exchange trading process. Research in advance which type of online forex broker will be most suitable for your needs.
Should a dispute arise between you and your provider, having an online forex broker that is overseen by a government financial regulatory body such as the CFTC, NSA or FSA within your legal jurisdiction can be of considerable assistance in resolving the matter fairly. Otherwise, your legal recourse may be limited.
Most sites offer clients their proprietary foreign exchange trading platforms at no additional charge, but such trading can vary considerably in functionality and ease of use. Obtain a trial version of the forex broker's software if it is downloadable, or request access to their web trading interface so that you can review it for its features, ergonomic performance and general suitability for your trading purposes.
Make sure to contact each site's customer service department to see what quality of assistance and attitude they offer to clients. Keep in mind that assistance provided by sales staff can often be friendlier than the help afforded existing customers.
Review the website under consideration for the type of educational information, software manuals, news feeds and market commentary that you feel is necessary for your success.
Many currency trading brokers offer both demo or practice accounts, as well as a series of live trading accounts. The type of live account you qualify for and its resulting services will often depend on the amount of funds you have available as an initial deposit. Make sure the online forex brokers you are considering offer the services you need for the size of initial deposit you can make.
Online forex brokers can differ significantly in the ways that they take funds from and disperse funds to customers. Ascertain whether your potential provider allows deposits and withdrawals in ways that are convenient for you.
In summary, it would be wise to review the above considerations that are important to you for any forex broker you are thinking of placing a significant amount of funds with. Doing so can help prevent fraud and any other potential problems or inconvenience from arising in the future that may negatively impact your trading business.