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Tips Factors to Keep in Mind While Selecting a Forex Broker

Discussion in 'Strategi Trading' started by Adam Smith, Nov 7, 2016.

  1. Adam Smith

    Adam Smith
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    Currency market or the foreign exchange market is the largest market in the world with the average volume of investment being in trillions of dollars on a daily basis. Traders are attracted to the forex market due to the immense amount of opportunities that are offered to them. Trading currency is different from other instruments. The market is decentralised with no central market place where a trader can conduct the trading activity. This is a reason why traders must select a broker. Forex brokers act as a channel between the FX market and traders.

    Since the broker is very important in the forex market, there have been establishment of many brokers in last few years. This poses a difficulty in the selection of brokers as traders get confused due to the availability of so many options. Here are mentioned a few factors that will help the traders to select the right forex broker for themselves in the competitive forex market.

    Trading platform

    Forex trading platform is like a portal or a window that helps the trader to connect with the forex market. Trading platforms are provided by the brokers to their traders. When selecting a forex broker, you must make sure that you select a broker who offers an easy to use and latest version of a trading platform. The trading platform offered by the broker should be visually pleasing and must contain a wide variety of technical as well as fundamental analysis tools. The interface of the platform should be good allowing the traders to enter and exit a trade with a click. A well-designed trading platform is easy to understand and use with different buttons for different uses. If your trader provides you a good platform then you can avoid all the costly mistakes.

    Margin

    If you have traded in any market before, you might already know that what margin means. Margin is the minimum amount of money that you need to maintain in the trading account. In forex market the margin maintained is less in comparison to other markets. If you choose a broker, you would not have to hold too much of capital in your account. A good broker sets a very low margin for opening an account with them.

    Leverage

    Leverage is like a loan that a broker offers to the trader who has an account with him or her. The leverage ratio that prevails in the forex market is the highest among all the markets. When you are selecting a broker, you must choose the one who offers a wide range of leverage rations on the margin account. This allows you to choose the leverage ratio as per your choice and capacity.

    Spread

    The difference between the bid and the ask price is called spread. If a broker charges commission they may charge a percentage of the spread. Many brokers earn from wider spread and do not charge commission.

    Currency pairs

    There are eight major pairs of currency that offer greatest liquidity. There are many currencies a trader can deal with. When you are selecting a broker, you must make sure that you choose a broker who offers currency pairs which you are interested in.

    Apart from the above mentioned factors, you must also check whether the broker offers good customer support or not. The broker must be easy to work with and should provide you assistance 24/7. The broker must fulfil regulations and should ask less initial deposit. If you consider all the factors mentioned above, you will be able to find a right broker for you.
     

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