The foreign exchange is the largest financial market in the world, trading in excess of $5.3 trillion a day. Unlike other trading arenas, it has no central marketplace, which means that its brokers play a fundamental role in executing every trade that investors place. They are a conduit to the various global markets, and this makes the right broker a very valuable asset to the savvy trader.
Finding this broker can be a challenge, however. Tens of thousands of brokerage firms exist, each offering varying levels of skill, support and expertise, a myriad of different packages, and access to a variety of markets. The task of sifting through them all to find the right one can seem daunting, but here are three top tips to help you narrow them down.
Tip One: Choose Your Broker Based on Your Currency Pairs, Not Your Currency Pairs Based on Your Broker
Currency pairs should be selected based on a variety of different factors, your attitude to risk, trading style, and methodology among them. What this decision should not be based upon is your broker. If you choose one of the four ‘majors’, this won’t pose any problems, as almost every brokerage firm will offer them. You get direct access to the markets with ECN Forex broker. If you choose something a little more exotic, your choices will be more restricted, but don’t ever be enticed to change your pairs on these grounds; with so many brokers out there, you will eventually find the perfect one to suit your needs.
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Tip Two: Customer Service is VERY Important
The forex markets operate 24 hours a day, and that means that you require constant access to your trading account. Your broker should understand this, and make sure that your trading platform and any advice that you require are available to you whenever you need them, at any time of the day or night.
What’s more, your broker should offer immediate access to a professional when you need it, as opposed to fielding your calls through an automated answering machine service. The markets move quickly, which means that you need to be able to make split-second decisions. Sometimes, these will require you to speak to an expert beforehand, so the firm you choose need to have someone who is ever available to answer any queries or questions you might have.
The best way to assess whether a brokerage firm will meet these needs is through your initial inquiries. Be sure to call outside of ordinary business hours, and if you can’t get hold of anyone, or your call is fielded through an answering phone service, immediately walk away – there is almost certainly someone better out there for you.
Tip Three: Your Trading Platform Will Be Everything
The trading platform you choose will be your portal to the markets, and that means it needs to suit you as if it were especially tailored to your demands. The best way to evaluate this before committing to a broker is to take advantage of demo accounts. Use these to assess the ease of use, aesthetics, and tools of every platform that you’re interested in. It’s a good idea to write a list of your requirements and assess your options based upon this. Be sure to carry on your search until you find a platform that’s utterly perfect for you.
Follow our top tips today and start your trading career on the right foot from day one.