Tips on Selecting the Best Forex Broker
If you're a foreign exchange investor then you know that selecting the best forex broker for you is crucial if you want to make sure that you make decent profits out of this business. So, before you rush off and sign-up with the first foreign exchange broker you see advertised on the internet, here are a couple of useful tips you need to consider:
Ordinarily forex brokers do not charge customers a commission on a transaction. Rather, if they're an experienced and good forex broker they'll make their money by buy and selling the currencies at a profit, much like the rest of us are trying to do. As such, if your forex broker is charging you a commission, then you would have every right to feel you are paying your broker two sets of fees. Moreover, with the profit in a forex trade being very slim, if you are paying a forex broker fees and commissions, then you are seriously eating into any potential profit you could be making. One exception to this rule general applies. If you have requested your forex broker to provide you with forex software and a forex signals service, then the forex broker may decide to charge you a commission on trades executed using these systems. That said, it is still best to try and pay your forex broker a monthly fee for such services.
2. IT support (24-hour help-line)
If you're an online forex trader, having ready availability to 24-hour IT support from your forex broker is vital. Crucial seconds and minutes can be lost if the IT support is lacking, and in a 24-hour a day business like foreign currency exchange trading this really can mean the difference between making a profit on a deal and making a loss.
3. Operational support
Again, ensuring that your forex broker provides you with operational support around which you can plan your investment decisions is vital. Here, some forex brokers will offer you an account with no commission, but will then offer little or no operational support, preferring to make their money on minimal spreads. While there may be nothing wrong with this, if you are new to online foreign currency exchange trading you are going to find this approach difficult if you want to make a decent profit margin. Rather, what you require is a forex broker who will provide you with useful forex software for your computer, including forex charts, real time foreign currency exchange trading prices, as even a few seconds can make a difference, and forex signals service so that you can get some indication of which way your chosen currency or currencies are moving. Although this service may cost you a little more, it is certainly worth the additional expense, at least until you know a little more about the nature of foreign currency exchange trading and how to make money foreign currency exchange trading.
Leveraging can be a highly technical service provided by your forex broker that could result in you making far higher profits or much bigger losses. As such, it is a service that you should think carefully about before using. Nonetheless, it is always useful to open an account with a forex broker where the notion of forex leveraging is accepted. Basically, forex leveraging allows you to purchase a currency for more than you currently have in your brokerage account. I.E., you borrow the money from your broker. This service allows you to trade forex without actually having the money in your account. If you win, you keep the profits. Lose and you have to repay the broker. So it is not advisable to do this if you cannot cover the cost of your investment from another easy to access source in need.