Is Your Currency Broker Friend Or Foe? Learn How To Tell!
There are more forex brokers on the internet than any one person could probablybe able to list, this happens to be a very good thing for us. In any field of business there’s competition, which is a good thing for the consumers because companies would only provide their best services in other to beat the competition.
In forex trading this can be seen by the countless forex brokers offering lows spreads and high leverage mainly to attract customers to trade currencies through their company.
Most times newbies sign up to a broker only to find themselves regretting after a few weeks.
There are a couple of things you really need to check before making a financial commitment to any forex broker, trust me, you don’t want to wake up one day after growing your trading account for over a year only to find out that your broker is out of business because they were involved in some shady business, a little research would make sure you don’t fall victim to such misfortune.
Out of the numerous factors on the checklist I use to determine the honesty, integrity, efficiency and reliability of any forex broker I’ve chosen the Top 5 to be the Forex Broker Trust Indicator Checklist, if you use this checklist as a guide to evaluate any forex broker before making any monetary commitments with them you would have cut down the chances of registering with a less than reputable forex broker down to next to zero, in other words, you’ll know if this broker is likely to be friend or foe.
Forex Broker Trust Indicator Checklist Factor #1
Minimum Slippage
Slippage occurs as a result of a sudden hyperactive increase in volatility usually following the release of a major economic or political news event. To properly understand this, say it’s the first Friday of the month and we’re expecting the Non-Farm payroll release figure, if the NFP figure released happened to disappoint the majority of traders we’re likely to see the dollar take a dive on the charts.
The sheer volume of sell orders that floods into the market immediately the news figure are made public causes a widening or gapping between the bid and ask price caused by the shortage of buyers willing to support the dollar.
If the normal market spread for the euro was 3 pips it’s not unlikely to see it shoot as high as 20 pips following some really major news release, either you completely stay out of the market before any major news release or announcement or simply make sure you find the best forex broker you can that offers a firm guarantee of the most minimal slippage, this would be a lot more helpful if you use some fundamental strategy in your forex trading methodology.
Just imagine opening a trade just to see a -23 in the profit and loss column of your trading platform immediately you’re in. Make sure to confirm that a broker guarantees minimum slippage before you register for a live forex trading account.
Forex Broker Trust Indicator Checklist Factor #2
Low Spreads
As forex traders, spreads are our cost of trading, just like in any other business a smart entrepreneur is always on the lookout on how to reduce business costs to maximize profits, keeping the difference. Working with a reliable broker that offers competitive market spread reduces our trading costs.
Don’t just go for a broker just because they’re offering low spreads, always make sure they satisfy all the factors in the forex broker trust indicator checklist, trading with a broker you can rely on makes you sleep peacefully in your bed at night.
Forex Broker Trust Indicator Checklist Factor #3
Leverage
High leverages of up to 1:1000 are offered by lots of brokers on the World Wide Web these days, this type of maximum speed leverage in the hands inexperienced traders is a sure bet for a crash and burn super fast scenario.
High leverage lets you control humungous contract sizes using just a fraction of the actual worth of your assets.
When used by highly experienced traders, high leverage makes trading more like having your own broken ATM throw out money at you as you please. But this is very, very risky is you’re just starting out or if you’ve been trading for some time and you’re not getting any spectacular results, don’t go max, start with a fairly low leverage and increase it if you wish as you gain more trust and confidence in your trading skills.
A leverage of 1:100 – 1:400 might be ok for a $1000 forex trading account but not more, preferably the closer to 1:100 it gets, the better, this will make sure you don’t burn your trading account unnecessarily.
Forex Broker Trust Indicator Checklist Factor #4
Multiple Trading Platform Options
As you become more and more successful at trading you’ll probably grow less interested in gloomily sitting in your trading office waiting for trade setups and managing your trades, having a broker offer a variety of forex trading platforms for pc, handheld and mobile devices help you trade on the go wherever you go.
Make sure the broker you choose to trade with has a web based trading terminal so you wouldn’t have to download and install any trading platform when you’re on vacation in Honolulu or Bali.
Forex Broker Trust Indicator Checklist Factor #5
Reliable and Efficient Customer Support
Poor customer support tells you a lot about how serious a broker is with their business and the well being of their clients. I don’t know about you but I definitely wouldn’t want to do business with a person that’ll take days to reply my email.
A broker with an efficient customer support and experienced customer support agents with a live chat portal would be nice to have. 24 online support means I can get the answers to my troubling questions answered almost instantly.
Make sure that the broker wish to trade with has very good customer support. Always make sure that a broker satisfies the requirements on the Forex Broker Trust Indicator
Checklist before you opening a live account and rushing off to start trading currencies.
That’s all for this article people. Hope you had fun reading it, don’t forget to drop your comments and share it with you friends they just might learn a thing or two from it and thank you for it.
Cheers…
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Anas Abba is an Active Forex Trader and Fund Manager at DigiTrix Fx Firms. His "Crack-the-markets-with-your-mind" Style of trading has helped 100+ of Aspiring Forex Traders all over the world achieve their dreams of Financial Freedom Through Currency Trading. Connect With Anas Abba (Forex Coach) on Google+ or Join His "Schooling Y'all on Forex" Community to get The Hottest Forex Trading Tips, Techniques and Strategies.
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