Due to the fact that forex trading is becoming more and more popular the number of forex brokers is growing rapidly. Choosing a convenient forex broker is not so easy for traders. It depends on different facts, some are common such as spreads, execution, platform and some are related to specific traders needs such as hedging, swap …
In this article you will find all the points that you have to take into consideration before choosing your forex broker.
The spread is the price difference between the buy and sell (ask and bid). Spreads differ between brokers but this does not mean those brokers that provide the lowest spread are convenient for you! Some broker change the value of the spreads depending on the market conditions and others do not. If the spread is not changeable, the forex broker lists it as an advantage and they stated that they have fixed spread. A broker who provides fixed spreads is good for you especially if you are using stop loss in your trading strategy because if the broker changes the spread according to the market conditions, your positions may close at their stop levels where they should not.
The execution time is very important and should not be delayed by the broker for any reason especially if you are an intraday trader where you have to enter the market as quickly as possible in order to seize the current available opportunity. Some brokers slow the execution of the orders, this issue would affect negatively on your trades because the rate of the currency pair would change during this period of time so you will be obliged to enter the market at a different rate than the rate you wanted. Almost all traders would prefer a real time execution. For this reason this is a cruel option that can not be compromised.
Trading Platform or Forex Trading software is very important for the traders. In fact the platform is the software that you will be using to trade. If you are not comfortable with it how are you going to trade? First of all, the trading platform or trading software has to give you real time rates, second and it's the most important factor, trading platform has to enable you automatic execution of the orders. Some traders prefer to set trailing stop in their orders. This option is very important too and has to be present. If you are following a pure technical trading system, your platform has to enable you writing a small program that executes and manages orders when your criteria are met.
Forex is a 24 hour market, so your broker should offer 24 hour support. All good forex brokers have online support through chat and phone calls.
Choosing a forex broker is not a tough mission but you have to take your time and check all the options provided by your broker before making up your mind.
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