So I’ve got this new forex signals program, Forex Neutrino and I want to choose a broker to trade with. The choice is crucial, and yet many of us don’t get it right first time. Having the right broker can really make a change to your profit or loss. So what must you look for in a currency exchange broker?
1. Investment Level
Look for a brokerage service that’s directed at clients at your investment level or a little higher. They vary significantly from a $25 minimum right up to $10,000 or more . Don’t go for the forex broker with the lowest minimum investment unless you are going to invest the minimum. Each company’s spread and services will be different, and you want a service that’s a good match for you.
2. Regulation
Check their membership of regulatory bodies. This may give you some protection in the case of the company’s failure. Keep in mind the regulators will depend on the country in which the company is registered. The main US regulators are the Commodity Futures Trading Commission ( CFTC ) and the national Futures organisation ( NFA ). Foreign brokers will not be registered with them but will have alternatives. Check exactly what those are and what protection they give you.
3. Platform
Take a glance at the software platform. You can generally access this in a demo account. Unless you plan to subscribe to a separate technical analysis service, you will need something that offers good charts. Some forex brokers also offer financial news alerts which can be useful. Do not forget to check that the order process is clear and straightforward, to avoid mistakes.
4. Costs
Costs can be quite different from broker to broker. They may charge money per exchange or they may operate only on spread, or a mix of the 2. Spread is the difference between the buy price and the sell cost. Check the costs for the currency pairs that you are most likely to trade, since this is what will impact you most.
5. Lots
The broker will have a minimum lot size which is related to the minimum investment level. Often, a standard lot is 100,000 currency units, a mini lot is 10,000 and a micro lot 1,000. It can be handy to be in a position to trade smaller lots for some systems so you can take a few lots per trade alter the amount of each trade, close out half your profits, and so on. Alternatively, some brokers permit fractional lots so that you could trade half a lot, for example.
6. Leverage
Leverage means that you don’t need anywhere near the exact lot size in your account. Most traders likely operate with a hundred times leverage, so $10 controls $1,000, $100 controls $10,000 etc . However , some brokers offer 2 hundred times or even four hundred times. This allows you the chance to earn more cash with less, but also carries more risk.
7. Support
There might be times when you need tech support fast. All brokers offer some type of service, but it is worth testing speed and style of response by asking a technical question after you have signed up for a demo account with your shortlisted forex broker.
