As tempting as it may be to plunge headlong into Forex trading, even if you’ve done a ton of homework you can’t go far without a broker. Sure, it may sound as if you require a ‘handler’ to take care of all your money matters when trading and in a way that is true. But how can you tell a good broker from a bad one? To be honest with you, as a newbie you won’t be able to tell the difference. However, here are a few tips to help you weed your way through the selection process.
Anyone Named Bob or Mike
Odds are you will encounter a lot of brokers with the name Bob or Mike. We’re not saying they are all stinkers, but in our experience you need to watch out for someone with an easy to forget name. Why is it that almost everyone is named Bob or Mike? There has to be a reason. Look deeper than a name if you have to.
There is no way of getting around this. A broker is going to make money from you with transaction fees. Because this is not a fixed rate you will find yourself paying a rate based on the spread or a commission based on the trade. Try to find a broker who has um, affordable commissions and that you aren’t always getting hit with the heavier end of the scale.
This needs to be said. If all you know about Forex trading is what you’ve picked up through internet searches, that’s fine. However, if your broker knows as much or slightly less than you, you are in trouble. You want a broker who not only knows his or her way around the Forex world but has actual experience in working the markets.
If your broker uses public wifi to execute your trades, you have a problem. You are looking for a broker who has secure networks and systems in place. This also means that any activity on your account has to be a lot more secure than you having to use an on-site ATM for a deposit. Credibility and legitimacy come into play here. If you have the right broker there won’t be any room for conspiracy and piracy.
The Full Meal Deal
Can you say customer service? This is one really important factor in building a good trader/broker relationship. You will want a broker on your side that at least thanks you for your business rather than makes you think you should be thanking him or her for spending time with you. If you feel anything other than welcome in their presence, it’s time to move on to the next candidate.
You Will Find The Right Broker, But It May Take Some Time
There are a lot of brokers in the sea of Forex trading so you will have no trouble finding the best fit for your needs. But that is the key, you need a broker that fits with your needs and can grow and expand along with you as you begin to see success in the trading arena. Just don’t pick the first one you see or the one that looks smarter than the rest. Plus, anyone named Bob or Mike, just to be on the safe side.