FOREX Trading Brokers

FOREX Trading Brokers

As with other types of trading, you can use a broker to handle your FOREX transactions. A FOREX broker may be an individual person, or a company, that buys and sells FOREX orders, depending on what instructions they receive from you. FOREX brokers will charge a commission for each trade, or at the very least, a fixed fee.

FOREX Trading Brokers

FOREX brokers typically work with financial institutions, such as banks, so that they are able to have funding for margin trading. Can you trust a FOREX broker? Absolutely. A FOREX broker must be registered with both the Commodity Futures Trading Commission (CFTC) and as a Futures Commission Merchant (FCM) before they can broker trades. This, of course, protects consumers against fraud, as well as illegal or abusive trade practices.

You will need a FOREX broker, however, choosing a broker can be a bit overwhelming, as there are numerous brokers to choose from. You can find many, if not most of them, online. Before you dive right in and select a broker, there are many considerations to undertake, and you must do some research. This research will help you to better understand and compare services and fees.

Often, when we buy something, we do so because someone we know recommended it. It works the same way with FOREX brokers. Talk to your family, friends, or other connections to find out who they are using for a FOREX broker. Find out what they like, what they don’t like, etc.

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Take a look at the FOREX brokers you find online

Many will have online customer support centers or help desks, where you can speak with them, or an associate of theirs, to get more information. Their response time, as well as the actual responses, will go a long way in choosing a broker.

Because stock prices change so rapidly, including FOREX, you need a broker who quickly executes your buy and sell orders, with little or no slippage. Make sure that the broker you select offers automatic execution, and read their policy concerning slippage.

Obviously, the fees that come with a FOREX broker matter a great deal. You need to know, in advance, what those fees are, and how and when they are charged to you. Does the type of account that you have with the broker have an impact on those fees? Is there a spread? If the spread is small, the trader (you) will realize more profit, but this typically means that you get less service.

Because FOREX trading depends so heavily on Margin trading, you need to have a good understanding of the broker’s terms that concern margins. What are the requirements for a Margin account? How is it calculated? Does it change depending on the currency that is being traded? These are things that you absolutely must know!

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Most FOREX brokers will offer you the use of software that helps you in your trading. Some will offer it at no additional charge, while others will charge a fee for the use of the software. If possible, try out a demonstration account with the broker, so that you can see how it all works. The software should be highly reliable, and perform well in fast markets. It should also include automatic trading, and it may have trailing stops and trading charts as well.

Just as there are minimum balances required for bank accounts, the broker will probably have a minimum account balance requirement as well. You also need to know about how interest on your FOREX broker account is figured, and when and how it is paid. Other information that may be important to you include: What currencies you are allowed to trade, the size of lots that you can trade, and whether your funds are insured.

FOREX Trading Brokers