| You may wonder if you really need a broker. The | | | | You’ll need to double your diligence if you’re |
| answer is yes. If you intend to day trade, then you | | | | looking for a forex trading broker. Since the foreign |
| must have a broker. And it doesn’t matter | | | | exchange market is worth trillions of dollars, it offers |
| whether you are trading stocks, futures, forex, or | | | | lucrative opportunities for brokers to set up their |
| options: unless you are a member of the exchange, | | | | firms online. And since the foreign exchange market |
| you won’t be able to place your orders without | | | | is decentralized, it can be hard to identify quality |
| a broker. | | | | brokers amongst all of the unscrupulous brokers with |
| Stock-, futures-, and options-brokers are required to | | | | fraudulent practices. |
| pass different tests in order to obtain their licenses. | | | | Your chances of finding an honest and reliable forex |
| These tests ensure that the broker knows his | | | | trading broker will dramatically increase if you use the |
| business and will be able to support you if needed. | | | | following guidelines: |
| In most cases, brokers earn their money from | | | | · Always request references that you can actually |
| commissions on sales. When you instruct your broker | | | | speak with. |
| to buy or sell, they earn a set percentage of the | | | | · Do a check with the local regulatory agencies and |
| transaction. Many brokers charge a flat ‘per | | | | make sure that the forex trading broker is registered. |
| transaction’ fee. | | | | For U.S.-based brokers, see if they are registered as |
| There are two types of brokers: full-service brokers | | | | Futures Commission Merchants (FCM) with the |
| and discount brokers. | | | | Commodity Futures Trading Commission (CFTC), and |
| Full-service brokers can usually offer more types of | | | | registered with the National Futures Association |
| investments, may provide you with investment | | | | (NFA). |
| advice, and are usually paid in commissions. | | | | · Compare the account details, such as the minimum |
| Discount brokers typically do not offer any advice or | | | | deposit required, leverage, spreads, and so on. Ask |
| research; they just do as you ask them to do, | | | | them specifically if commissions are chargeable, lot |
| without all of the bells and whistles. | | | | fees, etc. This is to ensure that you do not incur |
| So, the biggest decision you must make when it | | | | hidden costs. Some sneaky brokers will deliberately |
| come to brokers is whether you want a full-service | | | | give you an impression that they are the cheapest to |
| broker or a discount broker. | | | | use, but in actual fact, they’ll hit you where it |
| If you are new to investing, you may need to go | | | | hurts when it comes to hidden charges. |
| with a full-service broker in order to ensure that you | | | | · The trading platform needs to be user-friendly. |
| are making wise investments. They can offer you | | | | Many traders, especially first-timers, find it challenging |
| the skills that you lack at this point. However, if you | | | | to navigate trading software. Just making sense of |
| are already knowledgeable about the market you | | | | the charts and currency prices can be a challenge. So, |
| want to trade, then all you really need is a discount | | | | if there are demo accounts, try them. |
| broker to make your trades for you. | | | | These are just a few recommendations, but they |
| Selecting the right broker can be a tedious battle for | | | | should help immensely. Remember, this broker or |
| most traders. There are more than a hundred online | | | | brokerage is going to be your teammate when it |
| brokers today and additional choices are becoming | | | | comes to making you a wealthy person. So be picky |
| available all the time. | | | | and be cautious. |