Top Ten Ways to Choose a Broker

Getting into forex is a great move made by many who want to earn some money in their spare time or plunge into the market full time. But no matter how you plan to trade, the first step is finding a reliable broker who you can trust and work with well. Because truth be told, a certain degree of your success in the market depends on the broker you choose. Fortunately, there are several things you can do that will help you choose the best broker for your trading style.

  1. Security Matters – Finding a broker must begin with comparing levels of security. Once you begin funding your account, you’ll want to feel confident that your money is in safe hands. Whatever country you or your broker are in, look up the name of the regulatory body that handles brokers. This is will help you find out if the broker is a fraud or trustworthy.
  2. Experience Speaks – Find out what the broker’s background is, level of experience and success rate. Go online and look for comments other customers might be posting. Find out as many details as possible to avoid unpleasant surprises by inexperienced brokers.
  3. Deposit Amounts – Minimal deposits vary widely from broker to broker. Find out how much will be required as an initial deposit to open your account. Minimum deposits can range from just a few hundred dollars all the way up to $10,000, so this can be a point of decision for many.
  4. Discount or Full Service – Discount investors might seem like a wise choice for a trader with experience, but for beginners they are not cost-effective. New traders need the knowledge and experience of a full-service broker to see them through those beginning trades.
  5. Fee Structure – When analyzing a broker’s fees, compare them to the services offered, as those can fluctuate between brokers. What may seem cheap initially might become expensive when you add up miscellaneous fees not included.
  6. Interest on Cash – You’ll be adding funds to your brokerage account to get started. How much interest will your broker give you on that money? If any at all.
  7. Margin Accounts – Even if you don’t want to begin with a margin account, you might want to in the future. Find out up front what the minimum balance will be required on a margin account. In addition, make a note of how much interest your broker will charge when you begin trading on margin.
  8. Withdrawing Funds – Just like putting money into your account, you’ll also want to withdraw it from time to time. Does your broker charge a fee to release your money? How long will it take to get money out?
  9. Hidden Costs – Some brokers will make the fee structures so complicated that you can’t understand. Try to compare apples to apples to know what you’ll be paying.
  10. Investment Style – Determine how you want to invest and choose a trader that will support you in your style.