7 Ways To Compare Forex Brokers
There is certainly a buzz around the foreign exchange market right now. It is a chance for every individual to take their cut, by capitalizing on the economic down turn. Before you start though, compare Forex Brokers to ensure you have the right setup for you.
The following 7 factors should enable all traders to choose effectively.
Their Location
When choosing, make sure they provide you with plenty of information, rather than going with the one that offers the best spread. If you choose based on the best deal and nothing else, you are likely to get scammed.
Offshore companies are here, there and everywhere, but clients will find it hard to withdraw their profits.
Different regulators
To avoid being scammed, when you compare Forex Brokers, do your due diligence. They all have to be regulated by the relevant bodies in their country. For instance, in the UK this would be the FSA, where as in the United States it would be the FCM. Remember, this is your capital at stake, so make sure you pick wisely.
The different types of account
It will soon become apparent that there are hundreds of different accounts available. Account deposits start from $10 for a micro account, mini accounts start from $300 and standard accounts start from $2,000. Corporate accounts are available, but they usually require a much higher deposit amount.
Amount of Leverage
Leverage is the ratio that is risked in comparison to cash held. A lot of places will offer anything from 100:1 right through to 400:1. This means that you can risk $400 for every $1 in a 400:1 account.
Size of Spread
Spreads are important as they sort of dictate your profit margin. Some companies can charge spreads that are 10-15% bigger than others, which means a lot of profits will be lost. When looking to compare Forex Brokers, take into account this spread!
Trading Platform
There are hundreds of different trading platforms, or pieces of trading software. Try a range out and see what works for you and hopefully you will learn what features you really need.
Types and quality of support
The foreign exchange market is one that is open 24 hours a day, 5 days a week, even a trader gets a break!
The one thing you will need to ensure when you compare Forex Brokers is that they have a good support team. Check that you have multiple ways of contacting them such as email, phone and fax as remember, if something goes wrong - you will want to know where your money is.
