There are a lot of forex brokers to choose from and from a "newbie's" point of view it is probably hard to pick one that stands out. It is almost always true that neophytes in this field would have no clue as to where to start. Of course, it is alright to be so ignorant at first but with little understanding on how you can proceed, everything else will fall into place.
Here are simple steps that you can follow so that you will have the idea of choosing a forex broker that is best for you.
Step # 1 – Do your homework
What does this mean? It means you have to research for the different brokers that will qualify the category of your "best." So, to guide you here is a list of the things you must meet before you go ahead with your endeavor.
- The forex broker you are looking for must be registered legally with all the regulating authorities. You must check whether the broker you are considering for the part is registered at the legally designated jurisdictions in your locality or country such as: NFA (National Futures Association), CFTC (Commodity Futures Trading Commission) or FSA (Financial Service Authority). If the broker you are considering is not legally registered with any authorities then that broker may not be the best one for you.
- Will you go for dealing desk or non-dealing desk broker? Is the broker offering fixed or non-fixed spreads? If so, determine how wide the spreads are. If you are one of the persons who are looking forward to take profits on a quick pace for just a few pips. The spreads can be large and / or variable in this case, which is cut into the profits you can get.
- The broker must give you exact details on how much or how little the leakage is. However, for starters you can just stick to the statement "less is more."
- You have to decide whether you are willing or ready to trade live with real money as soon as you get the chance. This can be applicable if you already have the strategy of the winner and if you know how much risk there are for you. You may want to start trading on "micro" lots although not every broker will give you this option.
- Will the broker credit or debit rollover interest everyday? Brokers can actually do both, deduct or none at all. This should be important if you hold position on a 24-hour basis.
- Make sure there are premium services offered like charting, market commentary and news feeds.
Step # 2 – Broker Comparison
As soon as you have the list of the brokers you consider as the best, it would be now time to compare them all and narrow down further the list.
Step # 3 – Demo and QA
From the narrowed down list, you can pick your top two especially those that fits with every criteria that you have then open up a demo with those two. Start trading in various points or environment in the market. Learn how exactly they work on their trading platform especially the features. Do not forget to ask questions if you do not know something.
So, there you have it. Three simple steps that you can follow so that you can choose the best Forex Broker for you.
