How To Choose A Forex Broker (Guide)
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Trading in the Forex market may seem similar to trading in the equity market. However, it is not without some notable differences. Here is a short but useful guide to set yourself up for Forex trading:
Choose A Forex Broker
When it comes to choosing a Forex broker to set up your account, you will realize that you have many options with little differences, just as is the case in other markets. Following are some of the things you should look for in your broker:
The spread is the difference in price at which a currency is bought and cold. Spread is calculated in pips and Forex brokers earn their money through the spread, as they don’t charge a commission. When you set out to compare the difference in spreads, you will find out that it varies greatly and naturally, you must choose a Forex broker with the lowest spread.
Tools and Research
Like brokers in other markets, Forex brokers also differ in the trading platforms that they offer. This creates a difference in many things, such as real-time charts, technical analysis tools, data and other support tools. A good way to check your ease with the broker’s trading platform is by using it through the free trial offer that many brokers provide.
Brokers who are affiliated and registered with the relevant authorities are the ones you should be signing up with. Needless to say, all brokers are required to be registered with a bank or institution because of the large amount of capital they require. When choosing your broker, make sure you check their registration and affiliation with the relevant authorities of the country they are operating in.
Types of Accounts
Brokers may offer different kinds of accounts that vary in their capital requirement and the leverage that they extend. Brokers generally offer two or more different kinds of account that allow you to access different services and perks. Make sure you are choosing your account type wisely.
Range Of Leverage Options
Price deviations in Forex are usually in cents, which makes leverage necessary. Leverage is the amount of money that a broker lends to a trader for trading and is expressed as a ratio of total capital available to actual capital. The lower the leverage a broker offers, the lower can be your risk of margin call, but it will also lead to lower profits. The choice is always yours.
If you have limited capital, it makes sense to sign up with a broker that offers high leverage. However, if capital is not an issue, then you can choose to sign up with any broker offering a wide range of leverage options. Among all the brokers out there, make sure the one you choose offers a swift trading platform, tips, advice and leverage options that match your capital, such as ETX Capital.
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