Beginning a venture into forex trading is known to be one of the toughest challenges within the financial industry. Trends seem to appear and disappear on a whim, and behind the curtain, one might imagine nothing but a seething broil of random, indecipherable figures.
But this is not the case at all. The markets do not move at random, but rather are driven by external factors, which knowledgeable traders can use to predict trends before they emerge. It is this logical causation that is invaluable to those who choose to give trading a go, and that makes success something that anyone with enough skill and tenacity can obtain.
Yet identifying the magical formula is not easy. It takes hard-won experience and strong methods and tactics, usually augmented by one key factor: the perfect broker. If you need some help identifying the right professionals for you, then here are six key things to consider…
#1: Currency Pairs
When it comes to trading currencies, there is one golden rule that you must always abide by: ensure you base your broker selection on the currency pair you wish to trade. You see, the combinations that you choose will form the basis of your strategy, and if you don’t pick pairs that suit your aims and ambitions, success will not be forthcoming. This means that the first step you should take when you decide to start trading is selecting suitable pairs. Only once you’ve done this can you begin looking for brokers who offer them. Spend some time making a list of professional entities that meet these criteria, and then work from there.
#2: Type of Service
Once you know which currency pairs you wish to add to your portfolio, you can make your shortlist shorter still by identifying which names offer the sort of service that you’ll require. Before you can do this, you need to understand the types of package that professionals will provide, and these can be split into three separate categories: discretionary, advisory, and execution-only. Which of these will be best for you will be dependent on your experience, budget, and time availability, as well as your personal preferences, but as a rough guide…
Discretionary: Discretionary brokers work by trading on behalf of their investors, making all of their decisions for them. With skilled professionals to guide your moves, you’ll usually find that they deliver success – but only for those who have the money to pay for this. For the time-restricted and the wealthy, they’re ideal, but if you don’t meet these criteria, then you may have to consider another option.
Advisory: Advisory brokers work a little differently. Although the professionals behind the name will be on hand to offer you helpful trading advice, they’ll leave the final decision-making up to you. This means that they can be very useful for those who are either short on time, or could do with an experienced hand to help steer them to success.
Execution-only: Execution-only brokers are the least hands-on option available, and will act as little more than a simple conduit for your trades. Ideal for those with a lot of time but a limited budget, they can also be a great choice for those who want to earn their successes all by themselves.
Although money should not be the sole driver behind your decision-making, practicality says that it must remain as a consideration. The aim of trading is to turn a profit, and the more you spend on your broker, the less you will make overall. The high-risk nature of trading also means that it’s important to assess how much you can afford to lose if worst comes to worst, and as your fees must be included in this amount, the less you spend, the larger the fraction of your total budget that you can invest.
#4: Customer Service
Another factor that you’ll need to take into consideration is the level of customer service that you’ll receive. The currency markets move quickly, and it’s important that you can speak to someone when you need to, rather than being pawned off to an automatic messaging service or it’s like. The best way to assess this is by phoning a company up to talk to them directly, in order to see how receptive they are to answering enquiries, and whether they’ll interact with you in the way you would like. Try preparing a list of questions beforehand, and then comparing the manner in which your shortlisted brokers respond to them. Aim to find someone that you feel comfortable talking to, and who you feel you can trust to help you achieve your forex goals.
#5: Platforms and Software
Once the names that remain on your list are brokers who’ve ticked all of the boxes mentioned so far, then it’s time to look at their platforms and software. Many will offer a choice between either an MT4 or an MT5 option, and although the superiority of one over the other comes down to personal preference, be firm with striking from the list those who do not feature your preferred option. Consider, too, the software that your potential brokers offer. If you’re going to be trading on the go, is there a mobile product for you to use? If you’ll be trading from a Mac, is there compatible software available? Even once you’ve narrowed your choices down thus, go a step further and take advantage of demo opportunities to see which platforms and software suit you to the greatest degree.
Finally, take the time to do some research into your chosen broker’s reputation. Outfits like ETX Capital are renowned for their successes, and have names associated with strong customer service, reliable offerings, and exquisitely-developed software, but not all companies are beyond taint. The beauty of the internet is that it allows you to uncover the true nature of any undesirable enterprises that might have caught your eye, so that you can strike them from your list immediately.
Keep these six considerations in mind, and you should have no trouble finding your ideal broker.
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