5 Things To Look-Out For Before Selecting A Forex Broker

Selecting who to have as your forex broker is always an important decision. Get it right and your forex broker will likely take care of you – get it wrong, however, and chances are you'll be one step closer to losing your investment.

Choose A Forex Broker ...

To try and help you select a forex broker, here are 5 things you need to keep-in-mind:

1. Account

Forex brokers usually offer one of the following types of account:

• a mini account: that allows you to trade small amounts. What you need to watch-out for here is where your forex broker wants you to maintain a minimum balance on the account.
  
  
• a regular / standard account: this type of account will allow you to trade in larger sums than a mini account, but not as large as a high-yield account. Usually you can also trade in more than one currency. By far the most popular type of account with forex brokers, you still need to keep a careful eye on any requirement to keep a minimum balance.
  
  
• a high-yield / premium account: these types of account are usually kept for major players in the forex market and are normally adjusted to suit the needs of the accountholder.

2. Research

Information is power in the forex trading game. If you have information ahead of time, there's every chance you can make money – or at least cut your losses! So, you need to find a broker who is generous with his research information!

3. Commission

All forex brokers need to make money and to do this they charge a commission. So, check carefully to see how much commission your broker will be charging – then check around to see if you're paying too much.

4. Track Record

A good track record doesn't always mean that a broker is good – after all, anyone can get lucky once! But, you do need to try and find a broker who has a solid and reputable name. As a guideline: check your broker out with the register at the Futures Exchange Commission.

5. Margin Trading

“Margin Trading” means you're trading with someone else's money. Because of this, your broker will usually have a veto over what you purchase/sell. So, if you think that margin trading is likely to be one of your trading habits, make sure he/she cannot undermine your trading activities – otherwise you may lose money; or at minimum, try and pick a broker who understands what it is you're trying to do.