What is a Forex broker?

Here, we look at how to decide which Forex broker best represents your needs.

Trying to decide which broker who represents you best is no easy task, so this article hopes to give knowledge of the things you need to keep in mind.

Retail trade in the Forex market has just begun and the competition between traders has led to an increase in platform flexibility and features. Therefore, all brokers in the last few years trying to provide a better and easier way for a beginner to embark on the foreign exchange market. Here I will take up several of the most obvious questions you need answers to, can ask your broker or you can looking for a Forex broker here.

First and foremost is the ‘spreads’ and how merchants handle them. Spreads are valuable for beginners because they need to minimise their chance and reduce possible charges when he goes in and out of a store. Spreads are often quoted by brokers to be ‘fixed’ or ‘variable’ for each pair. I have noticed that nowadays, most spreads continuously moving and brokers offer fixed spreads really.

Also note that some brokers increase their spreads about the ‘party’ size is lower – see the different account types below. This seems a little strange because this really is not going to promote new business for the broker!

A point to make is that although this point is valuable for a beginner in trading. As you gain extra experience, then the spreads less of an issue when choosing a broker as they become less important and more skilled traders will point out other functions in addition to spreads when deciding which broker to choose.

If you expect to carry out so-called ‘position’ or ‘swing’ trades that will give you positions overnight, it may be wise to check the rates that will be paid/deducted from your account. This can be hard to find on some sites, but they can be very informative because brokers generally offer poor returns if you are in a trade for a longer period. Again, it is important to check which currency pairs they offer, usually offers companies the pair as it traded most with but it may be good to see how the ‘established’ is by checking if they also offer other trades such as gold, furniture and so on.

Unfortunately the one thing you can’t investigate and this is the type of service the broker provides. Essentially these are about the ‘discount’ brokers, which usually means that they do not offer any Commercial or help with general questions and if you turn to someone on a trading venue regarding your trade, you probably met with short answers and traders who are ‘straight the thing’.

Try finding a broker who has downloadable freeware that you can trade from your computer. Another way is to shop ‘live’ from a website, but I have discovered that this is inflexible, especially if you are in constant need of clicking between windows as this usually requires that the new pages need to be charged and this can be perceived as troublesome even with a fast broadband. Different brokers offer programs for trading platforms and separate mapping software which you get the opportunity to use the best-looking survey of business and the platform from another!

Ben Lobel

Ben Lobel

Ben Lobel was the editor of SmallBusiness.co.uk from 2010 to 2018. He specialises in writing for start-up and scale-up companies in the areas of finance, marketing and HR.

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