Introduction
Trading in the forex market requires the input of good forex brokers, however getting such people can be a real challenge. The trouble is that reliable forex brokers don’t come with a sticker on their face declaring their virtues. In order to get good brokers the person who requires them must go out there and find them, which is not child’s play. Among the many forex brokers that one is likely to approach, a handful of them will be tricksters.
In order to find reliable forex brokers, one needs to know what they should look out for since no one can tell the difference between bad and good unless they know what to watch out for. Just like in other business circles certain characteristics will tell you if the forex brokers you are dealing with will be true to you in the course of the forex trade.
Characteristics
When searching for good forex brokers one must look for the following:
Technical support offered by the forex brokers -- Forex trade is a highly delicate affair and from time to time people fall in to trouble. Good brokers will offer the needed technical solutions round most of the forex trade problems effectively. If your team of brokers can come to your aid when you run in to such difficulties, then you have a good team behind you. Brokers who are not bothered by your distress calls don’t deserve to be kept around, let them go.
Leverage -- This is your ability to open trade that’s beyond your investment; a 1:100 leverage allows the trader to open a trade amounting to $100,000 with only $1,000. Such leverage allows you to make higher profits beyond the usual abilities. The down side of this ability is that its risky trading as traders can get led on by higher profits which often prove disastrous for them. Your forex brokers should be able to advise you on the furthest you can push your luck without unnecessary risking.
Characteristics
Minimum deposit required by the brokers -- This is important as all forex brokers have a minimum deposit they will require from you before you can begin to trade. Some brokers can ask for low deposit while others will go for higher deposit. The deposits required can range from $25 to $1,000 or more. Incase you are short on cash it’s always wise to pick a broker who can allow you to deposit less.
Bid-ask spread which is also often simply referred to as spread -- This is a critical factor when considering a broker. It’s the difference between the buying and selling price at any given time. The bigger the spread, the more the rate of exchange should move to your favor in order to break even. Choose a broker who has low spreads on all main currencies in normal marketing conditions. Spreads higher than six pips should be recognized for what they are; pure theft and should never be allowed.
Tips and comments
People who engage in forex trade should know that it's risky business, hence getting reliable forex brokers will go a long way to help mitigate the risks involved.
