Factors to Consider When Choosing a Forex Broker

Learning is one of the requirements in Forex trading. Obviously, no one will stop you from opening a forex account even if you don’t know anything about this kind of trade, but hey, you do that at your own risk.
Think of learning and studying as an unspoken rule. You really have to know what you are doing, unless you want to just toss a coin whenever you wish to make a trade. By absorbing enough information and by formulating a strategy that conforms to your preferences, you can then make money on a consistent basis.
But all your knowledge about trading comes to nothing if you don’t know how to pick the right Forex broker online.
So here’s a list of factors which will be relevant to your search:
1. Customer service. A nice looking website is not enough when you are looking for a forex broker, even if it does have the bells and whistles you like. First you’ll need to check out the quality of the customer service they provide. That’s because sooner or later you will have a question or a problem, and the website should be able to address them properly and promptly.
So check if customer service is available 24-7. Since Forex trading is a worldwide activity, the best websites can offer round the clock customer service. Also, you also have to check on the quality of the customer service. Are they prompt in responding, and do they actually help? You can visit various Forex forums and find the threads that discuss the customer service of particular brokers.
2. Spread. This is essentially the factor that determines the commission of the Forex broker. If the spread is too big, then that means you pay more on the average. So obviously, find the website that offers the smallest spreads. The spread may not seem all that significant on a single trade, but when you add them all up over a period of time then it can mean a lot.
3. Slippage. Slippage is when there’s a difference between what you thought was the price of a trade, and what the price actually is when you make the trade. For example, you buy at a particular price and then you find out that the price jumps by 10 pips when the order is executed.
Unfortunately, slippage is unavoidable due to the nature of Forex trading. However, it can be minimized, if you find the right broker. And the right broker will have the latest trading systems and technology. You should look for an Electronic Communications Network which means that all the trades are processed by a computer. The ECN broadcasts the real prices in the market and transmits your order straight to the Forex market.
You can also find third-party comparisons which evaluate brokers according to the lowest slippages. There are also some online tools you can use to see for yourself how a broker performs in terms of slippage.
4. Reliability. What you really need is a reputable website that you can rely on to work smoothly and continuously. Forex is not a niche that does well with amateur operators. A website that is “down” too long or too frequently is a real hassle, and it can wreak havoc on your trading.
Of course, you also need reliability in terms of the automated process and also in the info being broadcast on the site. If you can’t really trust the website, then you need to move on.
Again, you can check out various forums to get reports regarding broker reliability. There are quite a lot of traders who are quick to spread the news when a particular website becomes unreliable.
5. Security. This is very much related to reliability, but security is such an important factor that it needs its own category. What you need to keep in mind is that you are using a website while dealing with your precious money. The Forex broker is therefore duty-bound to make sure that the website is not hacked so that your money is always safe.
Hacking may seem like a farfetched idea, but actually it’s not. And security also involves making sure that employees working for the website should also be trustworthy. So check out the security measures, and compare them with other security measures in other websites. When it comes to security and hacking, there’s no such thing as a security measure that’s overkill.

So when you go online and choose a Forex broker website, you have to consider it carefully. You can’t just choose on the basis of what freebies you’re getting, or even on what leverage you can get. With the right choice, you increase your chances of actually making money from Forex trading.