So I’ve got this new foreign exchange signals software, Forex Neutrino and I want to choose a broker to trade with. The choice is important, and yet many folks do not get it right first time. Having the right broker can really make a contribution to your profit or loss. So what must you look for in a currency exchange broker?
1. Investment Level
Look for a brokerage service that’s targeted at clients at your investment level or a little higher. They vary significantly from a $25 minimum right up to $10,000 or more. Do not go for the currency exchange broker with the lowest minimum investment unless you really are going to invest the minimum. Each company’s spread and services will be different, and you need a service that is a good match for you.
2. Regulation
Check their membership of regulatory bodies. This can give you some protection in the case of the corporation’s failure. Remember the regulators will depend on the country in which the company is registered. The main US regulators are the Commodity Futures Trading Commission (CFTC) and the national Futures organisation ( NFA ). Foreign brokers will not be registered with them but will have other alternatives. Check exactly what those are and what protection they give you.
3. Platform
Take a look at the software platform. You can usually access this in a demo account. Unless you intend to subscribe to a fresh technical research service, you’ll need something that offers good charts. Some forex trading brokers also offer financial reports alerts which can be helpful. Don’t forget to check that the order process is clear and simple, to avoid mistakes.
4. Costs
Costs can be quite different from broker to broker. They may charge fees per exchange or they may operate only on spread, or a mix of the 2. Spread is the difference between the buy price and the sell price . Check the costs for the currency pairs that you are most liable to trade, since this is what will impact you most.
5. Lots
The broker will have a minimum lot size which is related to the minimum investment level. Often, the standard lot is 100,000 currency units, a mini lot is ten thousand and a micro lot 1,000. It can be useful to be able to trade smaller lots for some systems so that you can take a few lots per trade change the quantity of each trade, close out 1/2 your profits, etc . Alternatively, some brokers permit fractional lots so that you could trade half a lot, for example.
6. Leverage
Leverage means that you don’t need anywhere close to the actual lot size in your account. Most traders likely operate with a hundred times leverage, so $10 controls $1,000, $100 controls $10,000 and so on. some brokers offer two hundred times or perhaps 400 times. This gives you the chance to make more money with less, but also carries more risk.
7. Support
There may be times when you need tech support fast. All brokers offer some sort of service, but it is worth testing speed and style of response by asking a technical question after you have signed up for a demo account with your shortlisted currency exchange broker.