The choice is crucial, and yet many of us do not get it right first time. Having the right broker can basically make a change to your profit or loss. So what do you have to look for in a foreign exchange broker?
1. Investment Level
Look for a brokerage service that is aimed at clients at your investment level or a little higher. They vary widely from a $25 minimum right up to $10,000 or more . Don’t go for the foreign 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 could be a good match for you.
2. Regulation
Check their membership of regulatory bodies. This could give you some protection in the case of the company’s failure. Bear in mind that the regulators will rely 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 alternatives. Check exactly what those are and what protection they give you.
3. Platform
Take a glance at the software platform. You can generally access this in a demo account. Unless you intend to subscribe to another technical research service, you will want something that offers good charts. Some foreign exchange brokers also offer financial stories alerts which can be helpful. Don’t forget to test the order process is clear and straightforward, to avoid mistakes.