Forex Trading Platforms And Brokers

Choosing A Forex Trading Platform And Broker

In order to trade in the Forex market you will need to find yourself a decent trading platform and forex broker. A broker is someone who executes trades according to your wishes and earns a commission on each trade. A market maker is often used instead of a broker, and an easy way to understand the difference is to think of a 'market maker' as equivalent to a wholesaler, and a broker comparable to a retailer.

As there are so many brokers and market makers out there competing for your business, it can be hard to figure out which one is best. This article will give you as idea of what to look for.

Transaction Costs. In the forex market, brokers are paid via the bid/ask spread. There should be no hidden fees or charges to trade. However, there may be additional charges to access certain reports and optional services. Be aware that if you hold a position overnight, there can often be a hefty fee. Many brokers these days have dropped the commision and built it into the spread itself.

Obviously the smaller the spread the better. Pip spreads vary by broker (and also by currency pairs), and often it can depend on the size of your trading account. The bigger the amount you deposit, the lower the spread you'll get.

Currency Pairs Available. All brokers should at least have the big seven currencies (AUD, CAD, CHF, EUR, GBP, JPY, and USD). But if you plan on trading New Zealand dollars or Danish krones, you should be sure that the broker is able to do so.

Minimum Account Balance. As a small investor you will need a broker that doesn't require a large balance to open an account. Many brokers today will let you open a forex mini-account with as little as $300. However market maker Easy-Forex now allow you to start forex trading with just $50, and you can even pay by credit card for instant deposit. You'll have a larger spread with a $50 account but there are no commissions to worry about.

Immediate Execution of Orders. Currency prices are constantly moving up and down and any delay in the execution of your order can cut into your profits or add to your losses. Of course its possible a delay will help you, but it never seems to work out that way does it? A broker needs to consistently execute your trade at the price you see on your screen. An occasional delay is understandable, but if it happens frequently find yourself a new broker.

Easy-Forex has a unique system of "Freeze or Regret". This means you can 'freeze' the price offered for a few seconds and even if it has changed, you'll still be able to get your price if you don't dawdle. It's a wonderful feature!

They don't have a 'demo' account where you can trade with play money. But frankly this isn't a great loss as they aren't really helpful. No matter how good you are in demo mode, you can guarantee things will be very different once you start 'live' forex trading. It's best to dive in and start 'live' trading from the start in our opinion. Even if you opened your account with$10,000 you should be trading at only $1 a pip until you know the ropes.

Margin Requirement. The lower the margin requirement, the more leverage you have. If a broker allows you to use 100:1 leverage, that means you can trade $100,000 in currency for only $1,000.The leverage you get depends on your account of course. You can use margin to rack up huge profits. But don't margin yourself too much or you will find yourself wiped out fast.

Free Tools. In order to analyze currency prices, spot trends, and plan entry and exit points you need access to charting and technical analysis tools. Many brokers offer basic services free of charge with an expanded array of tools for an added charge.

Superior Customer Service. This is something traders often overlook when choosing a broker and later regret it when they need assistance. A quality broker should respond quickly to any question you have. They should have knowledgeable reps available 24 hours a day by phone and email. Easy-Forex is ideal for beginners as they offer 1 to 1 live training so you are never left groping in the dark.

A User-friendly Trading Platform. Some brokers require you to download a trading program to your PC in order to make trades. This can be a nightmare if other programs on your computer 'clash' and you find it doesn't work as promised or it keeps crashing. Easy-Forex allows you to trade directly from the web, meaning you aren't tied to your own computer and can trade from anywhere in the world where you have access to the net. This is obviously not recommended for people with a poor internet connection or dialup!