Forex or Foreign Exchange is all about exchange of currencies of one country to the others’. It is about investing money in foreign currencies to gain profit by selling it at a higher price. Till few years back, currency trading was limited to large banks and financial institutions and they had access to the tools and methods to trade Forex.
However, because of the recent development of efficient online platforms and communication technology, individual traders can trade or invest in Forex. Forex brokers, conventional and online, works as the useful link between the investor and the market.
In this internet era, forex foreign exchange brokers are 24-hour online service providers who offer a secure online trading experience for you either in exchange of a small subscription or a percentage of commission. Forex brokers are individuals or group of professionals and market experts who can help you in making profits in forex trading.
You can open a mini account with a small sum to learn the basic principles of the market and then can graduate to a standard account. Your foreign exchange broker must help you in understanding the market, what are the advantages and risk factors involved with the trading.
Your forex broker should be registered to Futures Commission Merchant regulated by the Commodity Futures Trading Commission or should be a member of the National Futures Association.
You will find many online directories on the net that offer information on forex foreign exchange brokers and professionals and their services. These directories will help you in finding the right forex broker with accurate information about their past record and performance.
A typical forex foreign exchange broker may offer you 2 pips spread on EUR/USD and USD/JPY and 3 pips for all other major currency pairs. The spread should be low as lower pips means lower costs and thus a higher return on every execution.
The online trading platform offered by the forex broker should guarantee execution prices on every order type available without any slippage. The forex broker must provide a fully executable streaming price feed. The trading platform should be user friendly and easy to operate.
These days the forex brokers offer their services through mobile networks. It is a beautiful combination of portability and functionality. You can operate your forex trading through your mobile sets/PDA. With advanced technologies, it takes less memory space, offers increased stability, and robust security methods.
An ideal forex foreign exchange broker should offer
· low Pips spread on all major currencies
· instant execution even for large accounts
· zero slippages and no requotes
· constant margin requirements, even in volatile market situation
· free real-time charts that are rich in functionality
· stable and reliable dealing software
· no or low commissions
· extended technical analysis packages for free
· free foreign currency exchange news and economic fundamental calendar
· no negative balances – limited risk.
Before choosing the forex foreign exchange broker, do a proper research. Take help of the online sites offering comparison charts with pros and cons of the brokers and their services. Find out the spread they are offering is really the one you are getting while making actual trades. Ask for the past performances and enquire about the additional services they offer.