(Newswire.net — October 19, 2019) — Choosing a provider can be a challenge, especially in a market where there are hundreds of choices. Whether you are new to Forex trading or have years of experience under your belt, there are some tried-and-true criteria you’ll want to keep in mind when choosing a trading or brokerage account:
Know the Spreads and Account Types
Spend time learning what each of your prospective brokers charge in terms of spread. That’s the difference in price, measured in pips (one unit in the fourth decimal place of the trading pair’s value), between what the broker buys the currency for and what they sell it for. In short, the larger the spread, the more costly the trade is for you.
Shop for trading accounts that offer low spreads. You’ll also want to investigate whether the spreads change over time or are “fixed.” Some traders prefer fixed spreads. Next, ask the trading account personnel about the different account types. Some brokers offer so-called “mini” accounts that carry higher spreads but allow you to trade with small amounts of money. If you’re new to Forex, a mini account can be a good idea.
Check Out the Trading Platform
Every trading account will come with a built-in platform. Be certain to check out the ease-of-use of the platform offered. Depending on the Forex account provider, they can allow account holders to choose among several platforms based on their experience. Others have a “one size” platform that can be adapted for traders of all abilities.
Find Out About Execution and Leverage
Three key questions to ask the trading account support personnel are:
- How fast are the executions on your platform?
- Do you provide real-time quotes?
- Do you offer any kind of automated trading?
New Forex traders might not be so interested in automated trading, but it helps to know whether they offer it or not. After you get a few months of experience with Forex, you’ll likely want to use automated trading for at least a portion of your trading activity. Execution speeds are important for those who want to catch price movements in rapidly-changing markets. For traders who care about making a long-term profit, it’s important to have access to real-time quotes. Delayed quotes are outdated information and can be almost useless.
Ask About Customer Support
Do a trial of the broker’s internet help system by asking a few routine questions. If it takes them more than a few hours to answer, consider shopping for another trading account. Most of the better Forex online account brokers offer 24-hour customer service because the markets are open every hour of every day. Regional markets shut down temporarily but there’s always another that’s open for business. You should find a trading account that lets you use your telephone to cancel a position in the event that your computer crashes.
Read Reviews
Online reviews can be hit-and-miss, but it’s a good idea to read several different ones before committing to a trading account broker. Try to stick with review sites that have a good reputation in the trading community and post lots of different kinds of reviews. Stand-alone, one-page review sites are often fraudulent.