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Be Wise to Choose the Right Foreign Exchange Broker

Trading in the forex market sounds easy and attractive as it can give you more money in less time, but it is not as simple as it seems. There is no short cut to earn some money. You need to be strategic and experienced to execute the trade. If you are novice and want to trade in the forex, then you must follow some rules and guidelines in order to execute trades. And you need a forex broker who can execute trades on behalf of you.

The forex broker is the mediator between the foreign exchange market and the trader. They trade on behalf of the trader and get an amount from the profit of the trader. Before choosing a broker, one must look for some qualities in them. Some of the qualities of a good forex broker are discussed by in this article.

1. You can check the spreads of the broker against other brokers. If s/he is offering you a lower spread, it is better for you, as it costs less to trade.

2. Check if the broker you want to choose is registered with regulating authorities or not. If the broker is based in the US, they should be registered members of the National Future Association (NFA), and if they are based in the UK, they must be registered with the FSA or Financial Service Authority. If you see that your broker is registered with any of these or any other association, then go ahead. Otherwise, just move on.

3. Check the minimum lot size of the broker. There are some brokers who don’t let you trade under one lot. Just stay away from those brokers. You need to have a complete control over your money management.

4. Check if their trading platform is easy to use. This is a vital fact that you should check. A trading platform is the platform where you execute trades, check your account balance, change trades, get reports of the trades and get in or out of the positions. So make sure that the platform you are offered is user-friendly. A good broker with a poor trading platform or a good trading platform with a poor broker can lead your money towards a great loss. Hence, ask your broker if s/he is offering you a platform that is client-friendly or not. A client-friendly account also includes spreads and leverages.

5. If a forex broker has a good financial backup, you can be assured that he will not be a fraud, and the brokerage firm will not be insolvent all of a sudden. Financial backup actually gives you the proof that the firm is authentic.

Thursday, 28 Jul, 2016 / 7:23

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