Forex Broker Guide! It is highly recommended that you create your own Forex brokers guide to keep in mind what offerings and preferences you want in a Forex broker. It is essential to appreciate that the Forex market is very competitive and that you must perform thorough research to identify a broker most compatible with your objectives and resources.
If you aren’t entirely satisfied with your broker, it’s worth revisiting your Forex broker’s guide and trying out a new broker that can better meet your needs.
Forex Broker Guide Useful Guidelines
Here are some questions that you can include in your Forex brokers guide that you should gain answers to during your quest.
1. How much will it cost you to open a Forex account?
2. What size leverage facility do they offer? You are well-advised not to enroll with brokers providing extensive leverage facilities because they could cause you to overtrade easily. You may be interested to know that all USA brokers can now only offer a maximum leverage of 50:1 following recently introduced CFTC Rules and Regulations
3. What spreads do they charge? You can anticipate that most top Forex brokers will display a 2 to 3 pip spread for the EUR/USD currency pair.
4. What methods will you be able to use to deposit and withdraw money from your Forex account? For instance, can you use credit cards and bank wires?
5. Will your new broker be able to provide you with the option of mini and micro accounts so that you can trade using smaller lot sizes?
Forex Broker Guide Your Forex brokers guide should also help you evaluate the trustworthiness of a specific broker, which may be directly related to its size. For example, larger Forex brokers like XM.com tend to have direct affiliations with some of the world’s central banks, a relationship that can speak volumes of the broker’s trustworthiness.
On the other hand, smaller brokers may not have close relationships with banks but will focus instead on fostering their relationships with their traders, which can work to your advantage. Carefully consider what your needs are so that you can determine what size brokerage will be ideal for you. Forex Broker Guide
Another critical thing to list in your personal Forex brokers guide is a confirmation that the broker of your choice is a registered FCM (futures commission merchant) and registered with the US Commodity Futures Trading Commission (CFTC) or with the proper regulatory body in the country that the broker is based in. Ensuring that your Forex broker is regulated correctly is critical so that you can trade with the knowledge that your funds are protected.
Adjusted Net Capital
Forex Broker Guide Finally, it’s essential to ensure that your Forex brokers guidelines include a review of the adjusted net capital of any potential broker. For your security, favor brokers with an adjusted net worth of over $25 million, as these brokers will have the stability and size you require to trade Forex confidently.