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Forex Broker Guide
Introduction
The following is a list of questions you may like to ask yourself, your broker and other traders about a particular firm you have in mind. You can use this checklist to narrow down your selection of forex companies to fit your requirements. You might also like to read the forex broker ratings page on this site http://www.goforex.net/forex-broker-ratings.htm to see how other traders are rating and reviewing other brokers.
The following links will also give you some background information on U.S. FCMs (Futures Commission Merchants).
* Selected Financial Data for FCMs http://www.cftc.gov/marketreports/financialdataforfcms/
* NFA Background Affiliation Status http://www.nfa.futures.org/basicnet/
1. Word of Mouth
* What do other traders say about the broker?
* What is their customer service/dealing desk like?
2. Safety of Funds
* Is the broker regulated?
* What regulatory organisation are they registered with and what protections does this afford you?
* Are client funds insured against fraud at the firm?
* Are client funds insured against bankruptcy of the firm?
3. Execution
* What business model do they operate? i.e. Market Maker, ECN or NDD?
* How fast is their order execution?
* Are orders manually or automatically executed?
* What is the maximum trade size before you are put on manual execution?
* Are all clients trades offset?
4. Spread
* How tight is the spread?
* Is it fixed or variable?
* Is it larger for mini accounts?
5. Slippage
* How much slippage can be expected in normal and fast moving markets?
6. Margin
* What is the margin requirement? e.g. 0.25% (max 400:1 leverage), 0.5% (max 200:1 leverage), 1% (max 100:1 leverage), 2% (max 50:1 leverage), etc.
* Does it change for different currency pairs or days of the week?
* Is it the same for standard and mini accounts?
7. Commissions
* Do they charge commissions? (Most market makers commissions are built into the spread, whereas ECN's charge a small fee)
8. Rollover Policy
* Is there a minimum margin requirement in order to earn rollover interest?
* What other requirements or conditions are there for earning rollover interest?
9. Trading Platform
* How reliable is it during fast moving markets and news announcements?
* How many different currency pairs can you trade?
* Do they offer an Application Programming Interface (API) for automated trading systems?
* Does it offer any other special features? (e.g. One click dealing, trading from the chart, trailing stops, mobile trading etc.)
10. Trading Account
* What is the minimum account opening balance?
* What is the minimum trade size?
* Can you adjust the standard lot size traded?
* Can you earn interest on unused equity in your account?
More Thoughts On Forex
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There are even some auto trade systems available today that can do it all for you. In order to make an online fortune you MUST first learn how to do it before you attempt to use your own hard earned money to try and make money on the forex market. There the patient forex trading gurus who earn millions of dollars per month from currency trading every month, but there are also those who loose millions of dollars. The only difference between the winners and losers is that the winners took the time to learn what it is about and they traded with dummy account before the dived into the market. It is not that difficult to make a good profit from forex trading, just about anybody can do it if you are dedicated and serious
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Forex trading can be lucrative for the commited. And we just don't mean for the insane either! It takes great commitment to be able to make money in Forex trading, but it's a highly lucrative field for career technicians. The best place to start is with the basics. Thanks for visiting Superior Investor, and good luck with your Forex Trading Career.
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posted by the forex broker @ 4:56 PM
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