Newbies on the forex market find it hard to select a reputable online forex brokerage. You may experience this if you’re a complete beginner in the forex market www.fxcm-markets.com. This market is again flooded with brokers. A few are new, but others have been on the market for years. There are many brokers competing for your money. It’s even more difficult now to choose the right broker. Many of these brokers will make promises and advertise huge profits. Your success will be determined by the broker that you choose as a beginner in the industry. In order to avoid regrets it is vital to make a good choice. When choosing a forex broker, you need to take into account 5 factors.
1. Trustworthiness
Credibility is very important in any financial transaction. You must be very careful when it comes to the person that will be handling your money. Do not trust strangers with your money. You should look for a forex broker that is well-established in the industry. Search for big names with a proven track record of sustainability and reputation. It is better to spend more money on a reliable organization rather than trusting your money to someone that can disappear at any moment.
2. Low Spreads
Spreads are a source of profit for Forex brokers. Spread is just the actual price difference between SELL and BUY. It is measured by pips. Spreads are measured in pips. For instance, if EUR/USD is trading at 1,2810/1,2813, then the spread would be 3 pips. Choose an online broker that offers a low spread. When you have low spreads, it only takes a slight change in currency to generate profits. Spreads typically range from 3 to 6 pip.
3. Platform
Here is the software your online forex broker utilizes. It is this software that you’ll be using to trade. Because you will be relying on the platform to execute your trades, it is essential that you feel comfortable. Brokers are responsible for their own platform. Platforms offer real-time trading, charting and other advanced features. Platforms may be web-based, client-based, or both. A web-based platform makes it easier to use because you can do so without installing any software. You may also make trades using other computers. It is necessary to install client-based platforms in the computer. They are however very fast.
4. Leverage
Leverage is a way to trade with money you don’t have in your account. It allows you to control more money, and trade more than you actually have. As an example, a 1:100 leverage allows you to use 1,000 dollars to trade $100,000 worth of currency. Despite ten benefits, leverage bears greatest risks. This exposes you to higher risks on the market. Your online forex broker’s leverage is important to know. The normal leverages consist of 1:25, 1:250, 1:100, 1:250, and 400.
5. Word of mouth
This is what most traders think. The recommendation of those who worked with the brokerage is very important. You should ask them to share their personal experiences of working with a broker. This will help you better understand what the broker can actually deliver, besides their claims. It is important to ask more than one person for information. Once again, you should deal with a brokerage that is easy to communicate with.
Conclusion
If you’re going to be trading on the forex markets, then it is essential that you understand and know your broker. You should evaluate the kind of assets they possess, the customer support they offer, the payment methods they use, and their business background before selecting an online forex broker. You can also read reviews about them to learn what others think.