To begin with, you will review a few of the primary questions you must ask yourself when studying various brokers. Then you will examine various brokers and the features they offer. Utilizing some of the questions that crop up most often online regarding brokers, we have compiled a comparison guide for you to use.
This guide can help you whittle down your choices and then take the last step, in which you speak with some of the brokers and try trading demos on various platforms. We make this easy. Now to start.
Step 1: Do your homework
Prior to starting to compare brokers, are you aware of what you should be looking for? Still unsure?
Following are some of the questions you should consider:
• Is this broker registered with any regulatory agencies? For brokers based in the United States, find out if the ones in which you are interested are registered with the Commodity Futures Trading Commission (CFTC) or National Futures Association (NFA). Check with the Financial Service Authority (FSA) for brokers based in the U.K. You may want to reconsider using any broker who is not registered with any of these organizations or other regulatory firms.
• Is This a Dealing Desk or Non-Dealing Desk broker? Are fixed or non-fixed spreads available through the broker? What is the size of the spreads? Questions such as these are of more importance to traders who enjoy taking quick profits on several pips. When this kind of trading strategy is employed, profits can be impacted by large and/or variable spreads.
• What is the amount of leverage that the broker will provide you with? Prior to choosing the amount of leverage that works for your trading style, we suggest that you read “Leverage the Killer.” Remember, less is more. Keeping this in mind can be a lifesaver for anyone new to Forex trading.
• It goes without saying, you are not going to begin to trade using real money, right? When you have a workable strategy and you are prepared to start engaging in live trading, the amount of risk capital available to you is important. It might be wise to begin by trading “micro” lots if you have $2000 or less to invest. Be sure the broker you use offers this service.
• How does this broker handle daily rollover interest? Does it credit it or debit it? Some brokers do both, some deduct interest and some do neither. For traders who hold positions overnight, this information is critical.
• Are premium services available from this broker, such as news feeds, charting and market commentary? Will extra premium services fit better with my account goals?
Step 2: Do comparisons between brokers
This is where you get to the nitty-gritty. Find some trusted sources to read forex broker reviews. Don’t forget to look at what licenses are brokers holding for your region.
Step 3: Establish demo accounts and get answers to any questions you may have.
Try demo accounts at two brokers that you think best meet your needs. Try your hand at trading in various market environments. Become knowledgeable about the various ways to trade. Feel free to get all the information you need. A number of brokers provide outstanding customer service and are glad to respond to any questions you may have.
While most demo trading platforms are quite similar to the live versions, they are not totally alike. Platform reliability, slippage and the speed with which trades are executed may be different (live accounts are normally more reliable than demo accounts). Once you have developed a strategy and feel prepared to use a live account, start out slowly, execute a few trades and determine whether this broker works out well for you.
Next step is get to reading, you can start by reading some
forex broker reviews
, and learnind more about trading regulatory bodies in your region. Visit
if you are a European resident.