Considering that there are many Forex brokers, it is hard
to make a decision on which one to open your trading
account.
All of them have different advantages, desadvantages,
weaknesses, capabilities, features.
Here you have a list that can help you decide which broker
to choose for your Forex business.
1. Is the broker you want to use Regulated ? You must be
sure about this first criteria. Usually, all the regulated
brokers must submit financial reports to regulatory
authorities. In case that they don't do it, the regulatory
authorities may terminate their membership. It is a
measure to keep transparent the financial reports.
There are local regulatory authorities, for every market.
The US based brokers are regulated by the National
Futures Association and Commodity Futures Trading
Commission.
The Swiss based brokers are regulated by the Swiss
Federal Department of Finance and so on.
When a Forex broker is regulated, this allows investors to
dispute any resolution, increasing the investor protection.
2. You must establish the trading platform and the trading
conditions with the chosen broker.
The most important factors are:
Platform execution - you must know how fast and how
consistent are the execution of the trades. It should be
fast and transparent executions during normal market
conditions.
Spread- the smaller the spread on currency pairs the
better the conditions are for investors and traders.
Safety of funds- you must be sure that your trading funds
are kept in a segregated account or at least insured.
Fractional trading- you must ask your broker to allow
you to trade on fractional basis. Instead of trading full
lots , they can allow you to trade fractional lots, like
"22,458 units", not "23,000 units". This is a good measure
to avoid trades risking percentage of the balance on each
trade.
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