Forex Broker Ratings

Forex is a rapidly increasing trade and far eclipses the stocks and shares market in terms of volume. Many new investors are opting to try forex rather than dabble in the stock market but picking a good broker for the uninitiated can be a minefield, with so many to choose from.

So what are the main features to take into consideration when choosing a broker?

Before scouting round the market it is essential to have an idea of how, when and where you think you will trade – these fundamental factors are crucial in finding the right broker. For example, an early morning trader won`t care whether a broker shuts down after 10pm whereas some-one hoping to deal late at night will find this approach counterproductive.

Account rules are another key point – if you were hoping to start by trading small, a broker which requires a £5000 deposit is not going to meet your needs, no matter how great the other services offered are.

For forex novices, it is recommended that the major currencies are traded to start with, but for those with specific knowledge or experience in another market, dealing in one of the lesser-traded currencies may be desirable. If this is the case, you will need to find a broker that offers the pairing you are looking for – not everyone deals in all the minor currencies, which are also known as `exotics`.

Once you know how you want to trade and have a list of brokers that meet all of the criteria, it`s time to whittle the list down further by digging a bit deeper.

Narrow spreads are a trader`s best friend and this has to be one of the defining factors which influences traders to sign up with a specific broker. Someone which offers fantastic service and a great platform won`t earn you much money if they cannot also provide a narrow spread.

Another way money can be lost is by untimely execution of orders. It is therefore important to find out how quickly a position can be opened or closed and what the rate of slippage is. Make sure any information provided relates to both regular and busy trading conditions.

The trading platform available from the broker can also make a great deal of difference. This is the place where money is won or lost and if the trader cannot easily navigate around, execute orders or follow the market, ultimately, there will be financial consequences. For platforms which are web-based, check how often the site is down for maintenance and how their server is able to handle busy traffic.

There will of course be times when you may need to contact your broker for advice or help, either by email or telephone. Some of the really big brokers offer a 24/7 service but many of the smaller firms also provide customer support from early in the morning until very late at night. It can be worthwhile ringing or emailing (if possible) the helpdesk with queries to check response times and attitudes of staff before signing up.

Staying on the subject of trading platforms, it is worth considering what extra benefits are provided to investors. Many platforms incorporate not only free simulation accounts – a very useful feature – but also a number of analytical tools, as well as news streams and historical data.

Finally, once you think you have decided on a broker, it is a good idea to see what other people have to say. The internet is invaluable for unearthing valuable forex information and a bit of research could prevent a costly mistake.

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