Four important criteria for choosing a Forex broker
Picking the best broker is crucial to your success when you begin your business of forex trading. Experts claim that the broker could make the difference between someone making $1,000 per day or only $15 per day. For choosing a broker for forex, there are four important criteria. They are all vital to your success as well as determining the broker’s honesty – get more info!
The spreads of a broker are an important factor to consider when choosing one. Spread is the difference in price between buying and selling currencies. Spreads are higher during volatile markets, however forex brokers’ spreads should be checked on quiet days. Spreads for popular currency pairs, such as the Euro and dollar, are usually around 3 “forex unit” (also called pip). Brokers should not be allowed to trade major currencies if the spreads exceed 5 pip in calm conditions.
A good broker will also have a wide range of supported currencies. The majority of brokers allow you to trade the “majors”, which are the most traded currencies, such as the US Dollar and Euro. Many forex traders are more speculative, and prefer to trade exotic currency pairs, such as the Israeli shekel. Be sure that you are able to trade the currency pairs of your choice before you sign up with a broker.
Many people have a problem with the minimum deposit when opening a trading forex account. Some brokers demand large minimum deposits, up to $10,000. Some brokers require only $25 for the opening of a trading accounts. It is not recommended that you trade forex with a small amount of capital. Forex trading relies on leverage, which allows for large profits with little investment. You can open a trading account with your current cash if you’re short of funds.