Choosing Your Broker
In the world of forex trading, the forex broker is perhaps one of the most important people (or organizations) that you can get yourself acquainted with. They're the ones who have all the experience on the forex market, know all the strategies and calculations, are familiar with the patterns of the market and give you advice on what to do and when to do it. With so many things dependent on them, you have to be able to choose your forex broker carefully.
First and foremost, make sure that your potential broker is legal and accredited. Brokers around the world are required to register with a government office and submit regular reports, lest they are fined and their transactions are jeopardized. Ask up front whether your potential broker has this sort of accreditation.
Make sure your potential broker or brokerage does business on a level similar to yours. A broker that deals with millions of dollars everyday will probably deal with things very differently from one who handles just thousands of dollars in foreign exchange. The system of forex buying and selling is also different between levels. For example, forex traders who deal with lower magnitudes usually allow fractional trading. You'll want to ensure that the broker you're looking at really handles and specializes in your level of financial transactions so that your money is handled the way it's supposed to be. Getting an appropriate broker also gives you the kind of flexibility that you'll probably want with your transactions.
Inquire about the terms as early as possible. Ask about things like minimum investments, safety of funds and commissions so that you get a clear picture of how your money will be handled. It also tells you what kind of service and transactions to expect from that particular broker. Once you have a clear picture of all the pros and cons of each of your potential brokers, it'll be easier for you to make a choice.
Lastly, see if you like the way that broker works. If you're dealing with an individual, is he or she often available to take calls or inquiries? If you're dealing with an organization, is the staff courteous and helpful? You're still a customer paying for services and you should be treated as such.
Never rush your decision. Sit down with your potential brokers and talk to them about how they trade and about their knowledge of the market. Give them a small pop quiz on money matters and financial strategies. Take your time to fully scrutinize each of your options. With so much relying on your broker, it's one choice that you probably shouldn't rush.