Experienced FX traders recognise the importance of keeping their overheads under control when they trade. They look for certainty wherever and whenever it’s available. They’ll look for tight spreads, low commissions, accurate fills and overall reliability from their broker.
Successful and experienced forex traders also dislike unexpected charges, so they search out brokers who have zero swap/holdover fees. They don’t want to get charged for holding trades overnight or for a more extended period.
Just like running any other successful business forex traders need to continuously know what their fixed and floating overheads are, and they always strive to keep these costs to a minimum. They can then match this control with the self-control applied to their trading, ensuring that their overall risk gets reduced to a minimum.
If you control your trading overheads and keep your risk per currency trade and overall market risk in check, then you’re providing yourself with the best foundation for potential success.
There are many FX trading accounts you can choose. Many have catchy names, and some have lots of marketing initiatives attached to them. We should seek to simplify our trading at every opportunity, and we should reduce our choice about what account we open to a few basic decisions.
You need a forex trading account that is simple, transparent and good value. If a genuine ECN/STP broker provides a zero-fee account, and you trade on an MT4 platform, then you’re giving yourself the best opportunity to experience the best possible trading outcomes.
Let’s analyse this combination in a bit more detail so you can justify your choice.
Zero fee forex trading account
With this account, you’ll only pay the spread that you see quoted on your MT4 platform. If, for example, you get a quote-spread of 0.5 for EUR/USD, then that’s what you pay, nothing else. You won’t pay a commission, and you won’t pay holdover charges, there’ll be no additions. It couldn’t be more honest and straightforward.
ECN/STP broker
We all want to trade and deal through honest brokers. So how do we differentiate between the good and the bad? It would be best if you looked for transparency; the broker can’t be a market maker or run a dealing desk.
If they fall into either or both categories, they’re working in their best interests and not yours. In contrast, ECN/STP brokers have an incentive to route your market orders to the electronic communication (computer) network (ECN) in a straight-through processing manner (STP), as soon as possible.
ECN/STP brokers need to impress you with the speed of execution and spreads to keep your business. They can’t do this if the fills are slow and inadequate, the platform lags and the quotes you see are miles away from the spreads you get your trades executed.
MT4 platform
It would be best if you avoided trading forex on brokers’ proprietary trading platforms. These platforms give the broker an edge, think of them like a roulette wheel in a casino that has an inbuilt advantage for the house. It would help if you traded on an independent platform designed by software experts.
The MetaQuotes MetaTrader MT4 platform is the number one choice for experienced forex traders. It’s transparent, programmable and straightforward to operate. Software engineers designed MT4 for traders, not brokers. Now into its 3rd or 4th iteration, it has millions of users.
One of its overlooked qualities is the portability and independence. The developments you make on MT4 are yours, not your brokers. If you personalise your MT4 platform with your instructions, by perhaps using the MQL code to obey your specific commands, it’s your IP (intellectual property).
If you’re no longer satisfied with your broker, you can simply move your trading, your code and your personalised platform elsewhere. All you need to do is open another account with a different broker, find the server to trade through, and you’ve moved effortlessly and without fuss.
So, you’ve now broken your choice down to three elements
- Zero fees/commissions account
- ECN/STP broker
- MT4 platform
We really can’t emphasise how important this choice is at the outset of your trading journey. Your challenge is then to devise a trading plan from which you can launch a (hopefully) successful trading career.
