New to the world of stocks? No wonder all the Forex Brokers all look pretty much the same to you. Wait ‘till you get the hang of the business, everything will suddenly seem logical. Until then, however, we imagine you’ll need a bit of a helping hand in finding a perfect match. This guide will help you narrow down a vast number of choices available to the one that you’ll find fitting for your humble needs.
Availability, Patience and Service
First and foremost, you’ll need a Forex broker with customer service available 24 hours a day, especially until you spread your wings as a trader. The next thing to look for would be those that you can easily communicate with. As a newbie, we’re sure you have a ton of questions, even after lengthy and thorough research you’ve undoubtedly gone through since you’ve reached this step. This is easily checked by making a quick call that will provide you with insight into who you’re dealing with and what their level of professionalism they engage. No question is stupid, so feel free to give ‘em a test drive by asking a ton of questions, even those that you’re aware are completely trivial and unnecessary. If the tone of conversation remains pleasant throughout the chat, you can tick the first checkbox on your list.
Check if the Shoe Fits
The next thing you need to realize is, without question that a broker’s earnings stem from commissions and spreads. On top of the former, they may charge a percentage of the spread, in form of the difference between the bid and price of the pair that is the latter. Some brokers, however, do not charge commissions, but rather make their bread and butter by utilizing wider spreads. The wider spreads mean less profit, so dust off that calculator and start making preliminary monetary predictions.
Feel Free to Compare
Nothing tells an accurate story, like the good ol’ hard facts do. You can find tons of piled data online, usually available for free. The Internet is literally swarming with webpages that offer broker comparison and your only homework here is to get familiarized with the terms, expressions and acronyms. This is done easily, especially due to the fact that most of these offer some form of a legend or another. Compare FX brokers using one of many mentioned websites, create your own spreadsheet even, so that you always know where you’re standing.
Check for Regulatory Compliance
When talking stateside, a good Forex broker is almost always a National Futures Association (NFA) member. A self-regulatory organization in terms of the futures industry in the United States, the NFA’s role is to develop rules, programs and services for the market’s integrity protection, as well as that of traders and investors. Members of the NFA are usually registered with the United States Commodity Futures Trading Commission (CFTC), an independent government agency in charge of regulating the commodity futures and options markets on the US soil. So when looking for a Forex Broker, make sure you’ve got these two covered for yet another checkbox tick.
We hope we gave you some insight into what you’re getting into and that we’ve shortened the adjustment period you have to go through in any case. Keep in mind that 50% of the trading profession is learning to stand on your own two feet, everything else will come naturally.