Forex is fun and exciting and yields great profits. True. In reality, just so maintain the balance of profits you do need reliable forex brokers. Forex, even now is marginally unregulated market. This has resulted in multiple Forex brokers who are available with varying levels of service and reliability. For you what is imperative is to select the right kind of Forex Broker, this will enable your processing to function smoothly. For a beginner in this article there is a compiled list of do’s and don’ts:
Research
Researching is not an easy task but it will determine your future profits (or losses) so pick your broker very carefully. What you are closely examining is their company and background as thoroughly possible as you can. In order to select a reliable one some signs you must look out for are
1) For how many years they have been a member of any financial regulating body that currently try to regulate the Forex market.
2) You must check his client portfolio. This will give you clear view of who his clients are, how popular he is and has he benefitted them financially or not. You can even ask for testimonials, and cross check them yourself. This will give you an upper hand and create a comfort level.
3) Your broker needs to be accessible through telephone, mobile, e-mail and fax. Things in the Forex market change at lightning speed, so he must be accessible 24 hours. You don’t want to be stood up by your broker in the midst of an important decision. Many brokers nowadays have installed special softwares which give them round the clock accessibility to their clients.
4) There are trial packages, which you might want to see first before settling with any broker. It will give you a clear idea as to what you want.
Leverage:
One of the most exciting attractions of trading Forex is that traders can incorporate leverage. To understand how leverage works, you need to know that it allows a trader to trade with more money than they may actually have in their trading account. What this does is it allows traders to gain huge profits with meager amount of capital. Just how much leverage brokers offer varies according to his individual preference.
Is your broker financially regulated?
What having a regulated broker gives you is a surety in the times of a financial crisis your deposit money will be safe and well protected. Most brokers, in the country of their influence, will be conveniently regulated so you must ensure that you will be covered. Nowadays many brokers are applying for licenses even outside their countries of influence. This means that even if you don't live in the broker’s country of jurisdiction your funds will still be covered.
Consider the spreads on offer:
There are two kinds spreads on offer, floating or fixed spreads. What are floating spreads? They are great in terms that they tend to be lower. In case of low liquidity in the market it is understood that the broker will often increase the spread. This means that many will opt for a fixed spread. A fixed spread on the other hand is guaranteed by the broker not to increase irrespective of the market conditions.
Source: Admiral Markets - Forex trading broker from Australia
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