Table of Content
Table of Content
Best Forex Broker UK- Top Seven Tips For Choosing An Online Forex broker
The more we live the more we find out that we are dependent on many things besides our wits. Smartness will only get us so far, but unless we make use of systems set up for our convenience we are apt to fail. This is so with the Forex market. The way how the market works means we have to work through a broker or a market maker to get our trades started and completed. You can find Forex brokers in every part of the world just as you will find currencies traded in almost every corner of the globe. However, you should consider a few points when you go out shopping for the right broker to help you with your trades.
Probably the most important thing of all is ensuring the Forex broker you use has the correct qualifications. Therefore, choose a broker registered with the Commodity Futures Trading Commission (CFTC) as a Futures Commission Merchant (FCM). This means that you have legal protection against any abusive trading practices and scams that may arise.
2. Is the broker regulated?
This means that when you sign up to use their services you will have protection and insurance against any internal fraud. Also, your funds will remain separate or segregated from the broker’s operating funds. Notable regulatory authorities consist of the FCA, Cysec, ASIC etc.
3. What business model does the broker use?
Some brokers are market makers while others are ECN brokers, providing dealing desks for many traders. ECN brokers are mainly used by firms or individual traders who trade HFT (High-Frequency Trading). High-Frequency Trading entails the broker executing trades by using high latency technology and by the nanosecond for small incremental gains (i.e. only looking to profit pips).
4. Look at the types of spreads they offer
The spread is the difference between the bid and ask prices of the currencies you trade. Brokers do not make a commission on your trade, instead, they take the spread as compensation. Your broker may also offer fixed or variable spreads, and they can be different for standard trading accounts and mini accounts. The XM Zero Account provided by XM Globals is amongst the popular trading accounts that offer very low spreads. If your strategy or trading style is more adapted to a Scalping/Intraday this account is perfect for you. The average spread for the top four major FX currency pairs is 0.1 Pips. Sign up & trade with the XM Zero Account by clicking on the below link.
Can they provide you with details of just what slippage they would expect to occur during normal and fast-moving markets? This is when a broker executes a trade at an unfavourable price which could potentially leave the trader at a loss. This normally occurs during high-impact news or major financial announcement.
6. Margin requirements
What is their margin requirement? That is, what percentage of the investment in your trades do they expect you to pay to open a trade? You also want to know about their margin calls, and the time you need to respond to such calls.
7. What is their Rollover Policy?
Do they have any minimum margin requirements which they use to earn interest on any overnight positions? Plus, do they have any other requirements or conditions about you earning interest on any rollovers? Swap-Free Trading accounts and Islamic accounts may be a very good solution for traders who hold overnight positions (swing trading) or if you do not trade in interest due to religious beliefs. (please see more).
Once you have done your research and have selected one or more Forex brokers, then it is time to set up your trading account. When your funds clear you can begin trading. Remember to read
carefully the trading instructions to know how the broker can help you manage your trades. If you overlook some relevant details, you can lose money on your first trade. So take the time to read the details and ask the brokers or their support staff any questions you may have before you open your very first trade.