In order to trade in the foreign exchange market, you need a forex broker to put your trades to action. You can either have an automated or an expert forex broker. Nowadays, automated forex brokers are more popular due to the skimpy spreads they offer as well as the minimized human intervention that often causes problems with trades. Still, there are those traders who opt for another warm body to discuss his options with. There are plenty of brokers around to fit the specific preferences of every trader. Whether a forex trader intends to become a day trader or a position trader, there is a broker with the exact combination of services for his trading activities.
Looking for a forex broker is a personal choice. Nobody else can take accountability for the gains and losses you experience but you. Aside from choosing based on your own trading style and personality, you also have to choose your broker according to the ease by which you can understand and use their system. Of course, you also have to make sure that the forex broker that you choose has the necessary certifications in the market that you are trading in. Look at the menu of services of these forex brokers and see if they fit your own forex trading needs.
The menu of services could vary but there are some basic features that you can find in each forex broker website as well as in comparative reviews of these broker services. The following are some of those that you would find relevant to your search for the best forex broker:
- Options in trading account sizes: not all traders have a huge amount of money to invest in the forex market. If you do not have much to trade the market with, you have to look for a broker that allows you to trade mini- or even micro-lots. Once you are ready and have accumulated enough in trading capital, you should be able to move up to trading standard lots. Check also for brokers that allow you to open a trading account with a small minimum initial deposit.
- Narrow spreads: smaller pips in spreads are what you are looking for. You do not want your spreads eating into your trading profits especially if you are trading on a more frequent basis. Day traders with heavy trading activities during the day would best benefit from the lowest possible spreads, while those who hold on to their position for longer periods usually have to contend with spreads a notch or two higher. It is not rare to find spreads as low as a pip or two offered by forex brokers for every trade nowadays.
- Choice of leverage amounts: especially if you have a limited trading capital, you want to be able to take advantage of leverage in order to trade in bigger amounts. Forex brokers often advertise the high leverages that they offer their customers. While you can certainly multiply your profits with ample leverage, experts warn against using excessive leverage in your trades. A high leveraged trade that gives you an appealing profit potential could also present you with a loss that could be potentially damaging to your trading account.