Are you trading with the right broker?

Broker Discussion Forex Brokers
1

To make money at foreign exchange trading you must deposit some of your hard earned money with a forex broker. But which broker do you go with?

Choosing a broker can seem like a never ending task. There are just so many of them; they all seem to use different trading platforms and offer seemingly magically huge leverage of 100:1 or 200:1, where you can control vast amounts of money against your measly small deposit (if it isn’t totally obvious to you already, this is the broker appealing to your greed, so beware!).

It helps to have a few guideposts in place to help whittle down the brokers to ones that you might actually give your money to.

There are eight main factors I like to consider that make up these guideposts:

[B]1. Regulatory oversight[/B] - is there a government watchdog that is keeping an eye on the broker to make sure they aren’t breaking any rules?

[B]2. Safety of your funds[/B] - how does the broker hold your money? Are they adequately insured?

[B]3. Leverage/Margin/Gearing[/B] - does the broker allow you to use the appropriate amount of gearing that your trading system requires? Don’t be swayed by the offer of extra leverage if you don’t really need it.

[B]4. Lot sizes[/B] - are you able to apply your money management strategy given the amount of your deposit versus the minimum lot sizes that the broker allows you to place?

[B]5. Interest/swap rates[/B] - if you have to hold trades for more than a day, what rates of interest do you get on your position? This is especially important for more long-term traders.

[B]6. Ease of use of software[/B] - do you like the trading platform provided by the broker? Are you able to use it competantly? Do it have all the features that you need to follow your strategy?

[B]7. Reports[/B] - are you able to generate reports that display a complete and accurate history of your trading activity? Having access to your trading history is very important in being able to track your performance to see how you are improving.

[B]8. Telephone support[/B] - always have a back-up. You never know when there might be a problem with your computer, ISP, your broker’s server or any electronic component in-between. Know your broker’s dealing desk number and make sure you know how to talk to them about your positions.

I look at each of these eight factors in more detail in the post on my blog entitled Are you trading with the right broker?.

Are there any other factors that you always use when comparing which broker to use? What criteria do you use to determine if a broker is worthy of getting you as a client?

2

There is one other pretty crucial factor I should have added to my initial list.

Can anyone spot what it is?

3

Their pip spread and the garuntees of things like slippage or lagging execution during news trades. Or even the fact that they let you trade during news days at all.

4

So who do you recommend,there seem to be plenty of people, such as yourself,that give the sort of advice you have offered but don’t give any concrete recommendations and qualify them!

5

[B]9. Cost of trading[/B] - nothing in the trading world comes for free. Most retail brokers tout that they have no commission trading. This doesn’t mean that it doesn’t cost you anything to enter and exit a trade. The price you are paying to place your trade is the difference between the bid and the ask prices: the spread.

ECN brokers do have commissions that must be paid each time you put on or take off a trade. Tighter spreads on ECN platforms generally allow them to still remain competitive against retail brokers.

6

Trading news on a retail broker is a losing battle for you, the trader. The broker will always win as it is their field that you’re playing on. If you want to trade news then use a broker that doesn’t make their money through the spread, but charges a commission like brokers in other markets do.

Of course if you use an ECN broker you don’t have guaranteed stops, and you have to deal with real market prices which can gap like crazy especially around news time.

No-one said trading was easy… (apart from those tv-infomercials, but you know what … they’re lying).

7

Broker preferences can be a very personal thing, as our broker needs can be as individual as we are.

What works for me might be no good for you.

With that being said, I have accounts with FX Sol, Oanda and EFX and have no complaints with any of them so far.

The last thing you should do is sign up with a broker based on someone else’s recommendation (even mine). That’s just as bad as blindly following someone else’s trading signals.

Do your own homework. Make sure you’re satisfied with the results of your due diligence before parting with your money.

8

Thanks for the response, I’m new to this and have read so much adverse stuff on various sites that it all become a bit confusing.I have an account with FXCM and if I’m completely honest the only problems I have are with myself i.e not following my own rules, too tighter stops etc. It is easy to develope a persecusion complex when things don’t go your way and blame the broker.

9

This is all too true, especially when first starting out.

It is vital that you take full responsibility for all your trading activities, both the good and the bad. Only then can you focus on what is important in empowering your success: you.

Even if your broker does screw up and you lose money somehow, you’re still the one that chose them to be your broker!

You seem to be on the right path. Don’t look for scape goats, look to better yourself.

10

I am trading with Kerford Investments which gives tight spread with MT4 platform and also provides mini accounts.

11

To [B]David4u[/B] :

I hope you realise that you are replying to a ghost thread here. :eek:

The last post before yours was in the year 2007!! :stuck_out_tongue: :rolleyes: :smiley:

12

can you recomend any brokers, i find brokers overnight fees far to high and at weekends,thanks

15

I’ve join in many broker like fbs, robo forex, nordfx, fxglory,lite forex, masterforex,etc…
now the active account is in lite forex, fbs, and fxglory…
I like these broker…my EA can gain consistent in there…

18

Hi any advise on xforex?

19

Market makers are better for news trading as their spreads are usually fixed or variable capped, ECN’s are better for scalping as the spreads can be tighter during normal market conditions.

Contrary to popular opinion, not all market makers are bad. Forex.com (GAIN) and FX Solutions are market makers and they are fine.

21

Yes, I totally agreed. I was introduced by a friend to start trading with Everest Markets. The service was surprisingly good. I’m still willing to trade with any new recommended brokers as long as I’ve done enough homework about the broker before start trading. :57:

22

The lazarus thread is showing signs of kicking back to life, and after the long gap…
Moving on, I use three brokers for all my trades, traders way, fxcm and alpari - no issues so far. But you may want to do some research and try to find a broker that meets your requirements. Just remember to check if the broker is a STP broker…

23

HotForex, Fxcm and Exness. I see them were good for me.

25

Ok guys,

It’s good to know if the broker is ECN, STP, have good spreads and so on. BUT for me the most important thing to know after a few trades that are making me a millionaire (just imagine) is if the broker will send my check… The green bills…

So what do you tell me about that?

I personaly think that it is good to have reviews on withdraw from live traders with particulars brokers.

Cheers and good trades

26

I can say yes to that question, i withdraw my money with easy using paypal with a whole lot of other money withdrawal means. Orders are executed fast, and i have not really had any problem with them. What more can i ask for, i think i would still stick around with Profiforex.