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If you decided to become a Forex trader the very first thing you have to do is to choose a good Forex broker. For a beginner it can be a real challenge. A broker is a person or a company that buys and sells orders according to the trader's decisions. Brokers earn money by charging a commission or a fee for their services. There is a great deal of on-line Forex brokers and it is very difficult to choose one to entrust money.


The main factor you should pay attention to is reliability of a company you are going to work with. In order to minimize financial risks it is strongly recommended to choose a regulated Forex broker supervised by a trustworthy regulatory authority (such as NFA, CFTC in United States; CIPF, OSC, BCSC in Canada; FFAJ in Japan; ARIF, FDF, GSCGI in Switzerland).


You should make a serious research selecting a company you are going to deal with. Try to find out details of your prospective Forex broker activity: how long it has been working at this market, if it has an irreproachable reputation, if its clients are satisfied with their Forex broker. Read not only advertisement at a broker's official site but also reviews at independent internet sites.


Pay attention at spread and commission. Spread is a difference between a bid price and an ask price. If a Forex broker’s spread is very high you income will be minimal no matter how good you trading strategy is. At the same time you should realize that no broker is going to work free of charge. If a Forex company declares zero or a very low spread it may be compensated in some other way, for example, charging fees and commissions or pleading the effect of slippage (difference in price between the time you place an order and the time it is executed). That is why it is important to make clear and compare all the explicit and implicit fees.


Take into consideration margin requirements and leverage. High leverage will help traders having little money to earn substantial profits. At the same time it increases both potential profit and potential loss. So think twice before making decision.


If you are a beginner you should consider Forex brokers who offer Demo Account. It will give you a chance to improve your trading skills and test you trading techniques under the real market conditions in real time but with virtual money.


Some traders prefer to start with Mini Accounts that allow revealing all the weak points of strategy loosing little money. Comparing a Demo Account and a Mini Account we should note that a trader who has a Mini Account risks little but REAL money while in case of Demo a psychological aspect is not important and there is no slippage.
Different Forex brokers use different trading platforms. Forex trading platforms usually feature real-time Forex charts, technical analysis tools, and real-time economic news. MetaTrader is the most poplar platform and many Forex brokers offer it to their clients.


Do not forget about the ways you are going to transfer money. Nowadays Forex brokers use a large variety of payment methods: credit cards, bank wire, check and different e-wallets: PayPal, WebMoney, Moneybooker, E-gold etc.
Think about criteria that are the most important for you and look at our database to choose a Forex broker that meets all your requirements.

 

- by Pavel Baricev 2009

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