ForexNewsNow – Whether you are new to forex or a seasoned professional, one of the riskiest times you will be trading is when you are trying out new foreign exchange brokers. The first step is to always do your research on brokers. After that you should try to open a micro account with the broker to try out their services. This will allow you to test out several key areas that will be instrumental to your success. So how do you tell a good broker from a bad broker? Find out below.
Do Your Research
The first step in finding a new forex broker is to always do your research. Look online for forex broker reviews and read the testimonials from real, live people on review sites, not the ones provided on the broker’s site. Check out where the broker is incorporated and how legitimate the business seems. Once you’ve identified several good potential brokers, it’s time to open up a few micro accounts.
Opening Your Micro Account
No matter how seasoned of a trader you are, opening up a micro account lets you compare brokers without having to risk a lot of your bankroll. It’s a quick, easy, and low risk way to compare the services that several brokers offer. It is also much more accurate than opening up a demo account or reading a forex review because you can see exactly how the broker will fit into your trading style. This can be done for as low as a twenty-five to one hundred dollar deposit with the broker. When you open your account there are several key areas that you should look at.
First is the spread and how quickly trades are executed. The spread is the difference between the buy and sell price and is how the broker makes their money. The lower the spread, the easier it is for you to make money. How quickly trades are executed is also important, because the forex market is incredibly fast moving and long delays can cost you lots of money over the long run.
Another important technical part of the trading platform is how they deal with stop loss and take profit orders. Some slippage, or selling below the price you set, can be expected in volatile markets. But, if you see excessive slippage it’s a sign the broker isn’t executing the trades property and this could cost you a lot of money in the long term.
Customer service is also extremely important. This includes the user support as well as the deposit and withdrawal methods. With a good, reputable broker, your money should be just as easy to get out as it is to put it in. They should also offer quality and timely proprietary information to help with your trades. Information is king and the more relevant information you have at your fingertips, the better trader you will be.
Finally, don’t forget to look at the platform itself. Some platforms are built better than others and make trading easier. Try out the platform and see how it corresponds to your individual trading style. You should be able to execute the trades that you want quickly and easily without having to fumble around in menus and options. Reacting quickly to market openings is one of the keys that separates a good trader from an average trader.
Testing out new foreign exchange brokers can be risky. However, you can mitigate this risk by doing your research, reading forex reviews, and setting up a micro account. Once you setup your account, look for the key features in the client that can help you make winning trades easier and you’ll know you have a winning broker.