There is a vast number of Forex Trading Brokers eagre to offer you an account and help you with your Forex trading. Most are very professional and have support systems to assist you in your commencement. But as with so many high profile investment structures, there are a number of operations that at the outset, look very professional but then vanish into thin air, with your money.
Within the Forex industry, there are many reports of strange and underhand Broking behaviours, funds and accounts that go missing, reversed and un-authorised trades and other Scams that leave you high and dry with a zero balance, or it could be a simple as barriers and problems withdrawing funds.
So how do you start assessing a Broker for Forex Trading?
Here is a list of items you should investigate that will give you an overview of how a Forex Trading Broker might rate. It is not the ‘be all and end all’ only a starting point, as you undertake your due diligence, it is highly likely you will add others:
- Where are the Broker’s Registered Offices? As soon as I see places like Panama, the Seychelles or other off shore havens, the warning bells start ringing. I am not saying they might not be very professional, I just check much deeper.
- Is the Forex Trading Broker regulated by an official Government Body?
- Contact information. Are they available by phone, or only via email or web enquiry service? Forex is a 24hr market, they need to be available on the phone 24hrs per day.
- Do they have a recognised trading platform or an ‘In House’ system? Some big Institutions like Dukascopy have their own platform, but many Brokers use main stream platforms like MetaTrader, Currenex or Integral. Many EAs or Forex Robots require MetaTrader4.
- What spreads do they offer?
- What is their Broking structure? Are they DD (Dealing Desk) Broker, a NDD (No Dealing Desk) Broker, a STP (Straight Through Processing) Broker or an ECN (Electronic Communication Network) Broker? For a detailed explanation of the differences and how it affects your trading: Read this Article.
- Speed of Execution of Orders? This is directly related to their broking structure, so investigate (5) above.
- Leverage offered? Most Forex Trading Brokers will offer 100:1 but some will go much higher for established clients. When you are new, start with 100:1 it is better for your risk management.
- Do they have minimum account balances? Some Forex trading Brokers require a minimum of US$50k or more whereas others will offer accounts as low as US$1000
- Do they have access to all major Financial Markets?
- Do they offer Demo accounts, how many and how long can you demo trade on them?
- Do they provide PDA feeds and software for mobile trading?
This should get you started on compiling a Forex Trading Broker ‘short list’. Spend time on your due diligence, it’s your hard earned money and you need to be 110% happy with where you place it.
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