In Europe, London is well known for being the center of all Forex trading activity. But like many unsubstantiated assumptions, this fact is not entirely true. Advances in technology over the past several years have completely changed the way that the Forex market operates and have allowed for German Forex brokers to turn Frankfurt into a major player on the Forex market.
There are several advantages to trading via the German market such as the one-hour extra that you get because the German market opens an hour before London. This extra hour also gives a significant indication as to the direction that the European market will take for the day, before the London market starts to operate. Retail Forex brokers, commercial companies, hedge funds, investment management firms, authorized banks and the Central Bank are some of the big players in the German Forex market.
Online Forex trading is rapidly increasing over the past several years and German Forex brokers have assimilated well to the new method of operation, which many traders prefer.
More and more independent traders are learning each day that online trading is much more convenient than having to call your broker on the phone or meet with him personally. Being part of the Euro-zone, German regulatory law has to fall within certain continental perimeters but each country has some wiggle room to choose which type of regulation it favors.
Until recently, German regulation laws were very strict and required companies to trade only with banks with which they have direct banking relationships. Over time, these rules were changed to allow the German market to grow and flourish and the German market is much more manageable nowadays. The loosening of local regulation opened the door for many new Forex brokerages to open offices in Germany leading to an enormous boost in trading capacity which did wonders for the German market.
The hundreds of new Forex brokerages that opened in Germany are great for traders as they increase the competiveness which in turn lowers fees and spreads.
On the other hand, if you are new to Forex trading you might find the endless selection quite intimidating and have a very hard time choosing with whom to do business. Never trade with an unregulated broker. Choosing a local broker is always the best choice as oversees brokerages are harder to deal with if conflicts occur and regulation may not always apply to them in the same way that it applies to local brokerages. Use caution when checking different brokerages and never go with a broker who strikes you as illegitimate or untrustworthy.
Once you have made sure that the broker is regulated and trustworthy, some other factors to consider are trading costs, efficiency and customer support. Needless to say, you will always want the broker who offers the lowest fees and the best spreads. Check the efficiency of trade execution and choose a local broker to make sure that there are no language issues between you and customer support.
Another great way to check your future broker is to read the testimonials written by fellow traders. Take into consideration that certain dishonest brokers write phony reviews and try not to be fooled by them. The bottom line is that trading Forex online via a German Forex broker is a great option for any Forex trader but must be done right. Follow these instructions and you will discover that finding a broker is not a big deal.
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