Global Advice Center

Deciding on the Right Broker when Forex Investing

Posted on Jun 12, 2010 01:33:01 PM

Are you new to the forex market? Maybe you have suddenly come into some cash so now you want to try your hand at some forex investing? Or maybe you’ve been playing the stock markets for a while and want to try something different?

Whatever reason you are looking to get into the forex market, one of the first things you will need to do is find yourself a good forex broker. This article will help you through the maze of searching for the most appropriate broker for whatever type of forex trading or investing you want to do.

The most important piece of advice we can give you is to do your research and don’t sign up with any one broker until you’ve looked around to see what types of accounts and packages are offered elsewhere. Forex brokerage is a competitive business, so most brokers will offer some kind of enticement to gain your account, whether that is low (or zero) commissions, tighter spreads, the right mix of tradable instruments offered (do you want to trade futures/options for example, or just cash forex?) and what kind of software and other tools they offer.

Take a look as well at how the broker is regulated. Forex is a fairly unregulated market, but many firms are registered as a Futures Commission Merchant (FC) with either the Commodity Futures Trading Commission (CFTC) or the National Futures Association (NFA). The benefit of opening an account regulated with one of these agencies is that you know there is far less likelihood of them doing anything too shady.

Get some references too. Do you have any friends who trade the forex markets? If so, which brokers do they use and are they happy with the service? Customer Service is extremely important, especially for markets like forex that trade twenty-four hours a day. You want to be sure that if you have a problem with a trade in the middle of the night, there is someone there on the end of the phone who you can speak to..

Deciding on the right forex broker can be tricky, but if you take your time and don’t just go with the first one that pops up, you should be able to find the right one to suit your purposes.