Because the foreign exchange markets account for over four trillion dollars in traded value each day, they are considered the largest market financially. Most people realize quickly that traders have to use an online Forex brokerbecause there is not marketplace that is centralized, such as Wall Street. Because there are so many brokers available, it can be difficult to select the appropriate one, though it has become easier with online help. In order to find the right Forex broker, it is important to consider certain tips, such as account details, currency pairs, customer service and the platform used.
Accounts
Consider the different account options available through different online brokers. Look at the leverage and margins, since you could have a variety of leverage options, including 50:1 and 200:1. Leverage is considered a loan that is extended to the account holder by the broker. If your Forex broker offers 50:1 leverage and you have $1,000 in your account, you could hold a position valued at $50,000. While you will have more leverage to make bigger trades, you also have a higher potential to lose money.
Consider the initial deposit of the account, as well. Most Forex accounts have to be funded with a minimum amount of money. Most of the time, this is a low amount of around $50, but sometimes you can find accounts for as low as $1. Because of leverage options, you can turn that small amount into a much larger amount quickly.
Currency Pairs
In order to do online Forex trading, you need to know about the currency pairs available. Most brokers deal only with the majors, which is considered the US dollar to Japanese yen, Euro to the US dollar, US dollar to the Swiss franc, and the US dollar to the British pound. A broker is likely to offer many Forex currency pairs, but it is up to you to decide if you want those options or something different.
Customer Service
Because Forex trading occurs around the clock, the broker should offer online customer support around the clock. This can mean email or telephone service, but most people prefer live chat with their broker or the broker’s assistants. Consider calling the broker on the telephone to find out about wait times, types of service and how well they answer questions before choosing an online Forex broker, which will help you make an informed decision.
