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Tips For Selecting A Forex Broker

Jan 20, 2008
Would you like a piece of the largest market in the world? What is it and how do I get it? It is the Currency of Forex Market. To actually start trading Forex one of the first things you will need to commence is select a forex broker. Selecting a forex broker will be a key decision in your future forex trading success. Getting it wrong now may lead to problems down the road.

Before you select an online Forex broker, you as a new investor should carry out your due diligence and carefully check the services offered by a broker and the operational policies by which they conduct themselves.

It is important that you are aware that as with any business there are scammers out there looking to trick you into handing over your money without providing the service they advertise. Do some research into the broker you are looking to use.

There are at least 20 online foreign exchange brokers nowadays. When deciding on who to choose you should try the demos of around 6-8 to get a feel for their trading platform.

Using the demo platform is also a valuable learning tool as is most cases the forex broker's demo uses live data. The only difference is that you are using a paper account and not real money.

Some things to consider when selecting a forex broker include:

* The broker's hours of operation
* the minimum trading unit size
* the bid/ask pip spread on major currency pairs
* the reliability of the forex trading software
* is there a phone line backup to the forex trading software?

To execute trades you will need software that allows you to place by or sell orders. Other forex related software is used for either providing forex trading signals or providing graphical information (charting), which is used to analyse data. The forex trading software provided by your broker is normally free. The forex signal software would typically come on a subscription basis. With forex charting software there are both free and subscription options.

Once you have your trading account opened and have installed the forex trading software you will be ready to place some orders. They would include some of the following:

Market orders - this is an order to buy or sell at the current market price

Limit orders - this order is placed to buy or sell at a certain price as the market price moves up or down

Limit entry orders - this order is executed when the exchange rate touches a specific level without breaking that level
Stop-loss orders - this is a type of limit order linked to a specific order aimed at stopping the order when a loss level is reached

Take profit orders - as the name suggests this order closes an open order when a profit level is achieved

Please remember when entering the world of forex trading do not commit money that you cannot survive without. Before sending money to a broker be sure that it is money that you can live without if you do happen to fail as a forex trader.

I strongly recommend that you have a practice account to test your forex trading software and your trading plans. The last thing you want to do is rush in and suffer losses.
About the Author
Robert Keating has traded Forex for over two years. His site is provided with the aim of educating new traders coming into the market. Visit Forex Trading Online to learn more about Forex Trading and to also receive a special bonus report.
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