OK, so instead of just throwing out a “Hyuck! Hey, guys, who’s a good broker?” I’ve given this a little thought. I’m hoping I can get some well-reasoned recommendations from successful traders who have been on this forum for a bit. I’m trying to find a broker based on the following:
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I am new to trading. I have been slowly educating myself for about two months. Most of what I’ve learned about Forex has been on babypips.
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I work a full time job during the day and a part time job late nights and weekends. I will only have 3 - 4 hours in the evening in which to trade. (I live in Florida, USA eastern time zone.)
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Because of said work schedule I’m going to be trading the Japanese and possibly the Australian market and would like to find a broker who works especially well here.
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I expect to have $4000-$7000 with which to begin live trading and so will need a broker suitable for very small positions until I gain experience (and a larger capital base).
As a follow up question, I’m wondering based on these qualifiers whether I’m better off with a broker who has tighter spreads but charges a commission, or no commission with larger spreads. Is there any real difference to the bottom line? I’m assuming the commission is a percentage value and not a flat fee per trade…?
OK I know that’s a lot, I know, but I wanted to be intelligent with my question. Or at least try to be. I hope I can get some help with this. Thanks in advance.
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Hi @musicguy1967,
It’s great that you’re taking advantage of the resources available on this site to learn about forex.
Most forex brokers will let you trade 24 hours a day during the week, so the fact that you want to focus on trading the Asian session (daytime in Japan and Australia) is not as important a factor in choosing a broker.
Recently, there have been several discussions on this forum highlighting the dangers of trading with unregulated brokers:
Therefore, what’s most important is choosing a well-regulated broker. You mentioned you live in the eastern time zone, but not the country. Forex is regulated by different governing bodies around the world.
For example:
- In the US, forex is regulated by the CFTC and NFA, and brokers are required to maintain net capital of $20 million.
- In Canada, forex trading is regulated by IIROC and funds are protected for up to $1 million per client by the CIPF.
Forex traders who live in those countries should consider brokers regulated locally. Forex traders who live in the Americas, but outside the US and Canada can also consider brokers regulated by other major governing bodies:
For example:
- In the UK, forex trading is regulated by the FCA and funds are protected for up to £50,000 per client by the FSCS.
- In Australia, trading is regulated by ASIC and funds are segregated in accordance with Australian client money rules.
Also, your expected starting balance of $4000 to $7000 falls right in the average range for most retail traders, and most brokers will offer trade sizes suitable for you.
Regarding your question about whether it’s better to trade on a spread only model or a spread plus commission model, you have to consider your total transaction cost. That means you must compare the round turn (opening and closing) cost of the spread only pricing to the spread plus commission pricing to determine which costs more. The more you trade, the more these costs can add up, so keep in mind that many brokers offer discounts or rebates for high volume traders including FOREX.com.
Transaction costs are important, but make sure not to neglect other important factors such as whether a broker offers 24 hour customer support when the forex market is trading during the week, what trading platforms and charting programs they support since each has its own strengths, and of course, where they are regulated, for the reasons mentioned previously.
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Thank you for the response and the information. I should clarify that I DO live in the US. Florida specifically. I have also updated my original post. Thanks again
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It’s our pleasure, @musicguy1967.
For additional tips on position sizing, you may find the examples we shared in this earlier discussion helpful: Am i on the right track?
Since you live in the US, we hope you will consider FOREX.com. We are the number one retail forex broker in the US based on client assets according to the latest CFTC data.
You’re welcome to try a free demo account with us and test the platforms we support including our Advanced Trading Platform, MetaTrader (MT4), NinjaTrader and TradingView. Our support staff is available via phone and online chat 24 hours a day during the week to answer your questions when the market is open.
Yes, I can understand your anxieties. It is true that among thousands of online brokerage houses it can be difficult to select one broker. Nevertheless, so far I am satisfied to work with this broker ForexChief which is operated mainly from London but it is always ensuring me a 24 hours trading facilities along with excess to each market center. So, I never face any issue of trading even in the nigh times.