If there wasn't enough to learn when trading forex, consider this: You're giving all your trading capital to that company, with the expectation that you'll be able to trade with it and withdraw it. Follow these five tips on how to find a great forex broker, so you end up with a broker that meets your needs, and likely isn't a scam.
Part of your research in choosing a broker should be looking at written reviews of the broker as well as discussion forums. Be wary of these though.
Unless the information is coming from a credible source most forums are not credible sources you're likely to find fake reviews, both positive and negative. Most day traders will lose money , and since most traders can't admit that to themselves, they blame others when it happens to them.
Look up what people are saying, but maintain objectivity. There's lots of false information out there. Personally Test Out the Broker Your list of potential brokers should be smaller now. But with so much false information out there, don't make a decision yet. When you open a live account avoid any and all "bonuses" the forex broker may offer.
Updated February 15, That takes too much time, and often results in "re-quotes. Your trade opportunity is likely gone. Some brokers still operate on this outdated model Make sure your broker is regulated in a country with a well established financial system.
A forex broker regulated in Cyprus, for example, is better than no regulation, but you could still have problems. Pick brokers regulated by U. You're a day trader, so demand competitive spreads. Two pips is too high; eliminate that broker as an option. With an ECN account the spread should be half a pip or less during major sessions. You also want a broker that's available when you need them. Open a demo account with brokers you are interested in, then send them lots of emails with questions.
Monitor how fast and how thoroughly they respond. If the customer service isn't good, eliminate that broker from the potentials. Be Wary of "Losing Trader" Reviews Part of your research in choosing a broker should be looking at written reviews of the broker as well as discussion forums. First, open a demo account and see how the trading conditions are.
Your orders should execute instantly. If the demo is good for several weeks, then open a live account, with a fraction of the capital you intend to deposit.
Trade the live account with your partial deposit for at least two weeks. During this time, continue to test customer support, asking them questions and assessing how available they are. Initiate a withdrawal for some of the funds in your account. Depending on your withdrawal method, this may cost you several dollars, but it's worth it to know that withdrawals can be done easily.
If everything seems good after all this, you've done your due diligence. Avoid "Bonuses" When you open a live account avoid any and all "bonuses" the forex broker may offer. If you accept a bonus it may interfere with withdrawals, because some of the money in your account is now the brokers.
Send an email with your account application that explicitly states you don't want to take part in any bonuses that are being offered. This will narrow the field of possible brokers to choose from. Then, focus on brokers that are regulated, offer competitive spreads and good customer support.
Do research online, but realize complaints may be from traders that lost money, which isn't the brokers fault. Test out the broker with a small initial deposit, and attempt a withdrawal.
If all goes well, then deposit and begin trading with your full trading balance. When opening an account don't take any bonuses; these "freebies" will only cause you grief.More...