Things to Use when Comparing Forex Brokers
You need to understand many things to do with forex trading before you can start on the actual trading. Those who were not ready but decided to start anyway reported huge losses in a short while. You have to be conversant with the main critical qualities a forex broker has. This will be the way you select the best forex brokers. That will make it easier for you to choose one of them to open an account with.
You need to think of things like forex margin, forex leverage, ECN forex and forex spread. You can for instance look at the margin offered by the forex brokers. A 2% margin affords you a leverage of 50 times on your money. This seems to be the current maximum one can leverage.
Not many of the forex brokers took this news well, and most have decided to go trace in foreign markets, where there is not such limitation. You need to read through the review sites to find more information regarding this matter so as to find the best places to trade. You need to be especially keen when it concerns the safety of your money. Ensure there are adequate regulations that safeguard your money in case the brokers go bankrupt.
You need to know then if the brokers are market makers or use ECN. This information shall prove rather critical. A forex broker with a dealing desk can trade against our positions. ECN brokers are therefore preferred. But keep in mind that ECN brokers may turn out to be too costly when they charge a commission per each trade. You therefore have to find a way to balance between these two, to get the most out of the situation.
You need to know more about the forex spread. Where there is a low spread, it is to your advantage, since you will not be charged huge commissions. ECN forex brokers usually give very low spreads, because their platforms can tap into a huge pool of liquidity providers. You will also need to see if the spreads are fixed or variable. Those who have variable spreads normally experience wider fluctuations whenever there are major economic news releases. Spillage can occur, where you order is filled at a price that is not what you were expecting. You need to see what amount of spillage might occur.
You need to look at such things when you are selecting a forex broker. You also need to find out if they offer demo and micro accounts to practice real trading on. This is critical for beginners. After such training only should they access normal accounts.