How to Find a Broker for the FOREX Trading Market

It's not always easy to know what to look for in a broker in
any market, much less a market as complex as the FOREX.
But, if you want to trade in FOREX you need a broker. While
it might be tempting to simply ask the brokers what they can
do for you, you can't always depend on them to give you a
straight answer. Here are a few things to consider when
choosing your broker.
You will want a broker that has low spreads. Since FOREX
brokers don't charge a commission, this difference is how
they make money. Low spreads will save you money.
Along with this, you should be looking for a broker attached
to a reputable institution.
Unlike equity brokers, FOREX brokers are usually attached
to large banks or lending institutions. The broker should also
be registered with the Futures Commission Merchant
(FCM) as well as regulated by the Commodity Futures
Trading Commission (CFTC).
Once you've narrowed your choices down to brokers that
won't cost you too much, and that are reputable, consider
the trading tools that they are offering you. FOREX brokers
have many different trading platforms for their clients,
just like brokers in other markets. These often show
real-time charts, technical analysis tools, real-time news
and data, and may even offer support for the various
trading systems.
Before you commit to any one broker, request free trials
of their tools. Brokers generally provide technical as well
as fundamental commentaries, economic calendars, and
other research to help you make good trades. Shop
around until you find a broker who will give you what
you need to succeed.
The next item that you will need to evaluate carefully
is the number of leverage options your potential broker has
. Leverage is a necessity in FOREX trading because the price
deviations in the currencies are set at fractions of a cent.
Leverage is expressed as a ratio between the total capital
that is available to be traded and your actual capital. For
example, when you have a ratio of 100:1, your broker
will lend you $100 for every $1 of actual capital you have.
Many brokerage firms will offer you as much as 250:1. If
you have low levels of capital you will need a brokerage
with high levels of leverage to make reasonable profits.
If capital is not a problem, any broker that has a wide
variety of leverage options would be a good choice for you.
A variety of options will let you vary the amount of risk
you choose to take. For example, less leverage (and t
herefore less risk) may be preferable if you are dealing
with highly volatile (exotic) currency pairs.
Along with different levels of leverage, look for brokers
that offer different types of accounts. Many brokers will
offer you two or more types. The smallest account is
known as a mini account and it requires you to trade with
a minimum of around $300. The mini account also
generally offers a high amount of leverage.
The standard account allows you to trade at a variety
of different leverages, but it requires minimum initial
capital of $2,000. And finally, there are premium
accounts, which often require significant amounts of
capital. They also generally have different levels of
leverage available to the traders who use them, and
often offer additional tools and services. You will
need to make sure that the broker you choose has
the right leverage, tools, and services for the amount
of capital that you are able to work with.