More and more people are beginning to look at trading as both a means of investing and as a way of making a living. Forex Trading or Currency Trading is quickly becoming one the most well-known forms of investment trading.
The minimum capital required to enter the Forex market is zero, making it easy for people to trade. You will need a broker, unless your bank is a large financial institution. The number of Forex brokers on the market has increased with the increase in FX Trading demand. There are many Forex brokers to choose from. The problem for potential Forex traders isn’t how to trade; it’s how to select a reliable broker that you can start trading. Not all brokers are created equal. Find a broker that meets your needs as a trader. If you are looking a broker you can have a look at Forex Brokers Malaysia to find more.
It is possible that this can prove to be tricky as not all brokers offer similar services or have the exact same policies and charges. The pip spread and other charges can make a huge difference to your profits. You must be able to concentrate on the markets if you want to make a decent living as a Forex trader. You should make sure you choose a reliable Forex currency trading brokerage before you even begin trading.
There are many things that make a foreign currency broker a great one. Here are my top ten tips for finding good currency trading brokers.
It is vital to have a good reputation in this industry as there are many “fly-by night” businesses in the market. It is best to stick with Forex currency trading brokers that have a track record.
Important to remember is that they must prove all of their business transactions. Is their office legitimate and has the company many satisfied customers Do they have a long history of business or was it a quick start?
Review websites where brokers have shared their experiences can give you a lot of useful information. You should avoid anyone who has been ripped off previously.
Reliable brokers must be transparent about their operations and dealings. Online information must be available about how they operate so potential traders can find out more about their reputation and performance.
No matter where your country is, you should always select a Forex broker whose activities are closely monitored by regulatory authorities. A trusted Forex broker must be registered and accountable to the relevant authorities.
Swiss banks are one of the most well-regulated in the world. They are governed by the Swiss Federal Department Of Finance. US Forex brokers should be registered with the Commodity Futures Trading Commission as Futures Commission Merchants (FCM) and official members of NFA.
This means that they must comply with all industry rules and regulations. You don’t want an unregulated broker holding on to your money in the middle if nowhere. You may never get your money back if they fail.
You might choose to work with another broker, if the broker is not regulated or supervised by a monetary authority.
3. Pip Spread: Differences
Forex trading brokers do not charge fees or commissions like stock brokers. They make their commission from the difference between the pip spread of each currency pair they trade.
Contrary to other financial markets, currency market trades are not done through a central exchange. The broker you use determines the spread’s value.
Forex brokers usually publish live or delayed prices on websites. This allows traders the ability to compare spreads and offers a variable spread.
A variable spread can look appealing because of the volatility in the Forex Market. While the spread may seem small in quiet markets, it can quickly grow to a large extent and wipe out your profits.
There are many brokers who are known to be “bucket shops”. They aren’t in your best interest and can even change spreads to their advantage.
The bottom line is to continue looking for FX brokers that offer fixed and low pip spreads.
4. Speed of execution
I believe this is something novice traders rarely notice when signing up for trading accounts.
While most brokers post live prices on their trading platform, the real question here is how quickly they can execute your order once the button has been clicked.
It is essential that the order be executed quickly, especially if the scalper trades the 5-minute charts.
The best way to solve this problem is to open an account demo with the broker and give them a trial drive. This will let you test their trading platform’s execution speed.
5. Minimum Trading Account Size
Broker leverages have risen to meet the needs of small retail traders with limited capital who want to participate in the Forex market.
While Micro and Nano accounts can be obtained, brokers usually offer the Standard or Mini account.
A Mini and Standard accounts have a key difference. Standard accounts trade in 100,000 units. Mini accounts trade in a tenth that amount or 10,000 units each lot.
This means that the mini account has a tenth of the account size as the regular one. This allows you to take a tenth as much risk in the mini account than you would with a regular one.