The foreign exchange market, also known as forex, is a decentralized over-the-counter market, where major financial institutions trade billions of dollars in foreign currency daily. The foreign exchange market is open from Sunday at 6:00 p.m. EST to Friday at 5:00 p.m. EST, making it practically a stock market open 24 hours a day. Although the big banks are the big players in this market, with the Improvement of Internet technology, a vehicle appeared for traders to get involved in the exciting world of foreigners.
Not all forex companies are the same; in fact, some end up being just scams! The right forex brokers will be there for you whenever you need them. They will provide you with training software and assist you at all stages of your journey. If you are not working with a good online forex company, it will be very difficult to be successful with your business – especially if you are new to the market. Below are factors you should take into consideration before opening a forex trading account
- Demo trading account
One thing to consider when you decide to examine a forex broker is the amount required to open an account. It is always advisable to start with a forex demo trading account. Any reputable forex broker will offer this. Suppose you spent a few weeks testing a trading strategy on your demo account and think it’s time to put it online. Nevertheless, you want to be careful with your money. It is best to find a forex broker who offers the flexibility of being able to deposit a smaller amount to start with, until you feel more comfortable. There is a big difference between losing 100 pips in a micro account and losing one in a normal batch.
One of the first things that you should look for when it comes to Forex brokers is something affordable. It is particularly difficult to find these days, whenever we tend to manage everything electronically. While it is certainly convenient for you to trade on the Internet using an online platform, there is also something to be able to pick up the phone and speak to a broker if there is a problem. Forex brokers who make themselves available this way are really ahead of the pack. When you find one that allows you to do it, it’s usually a great choice.
- Online platform
Another way to search for reliable Forex brokers is by the type of system they offer on their online platform. For someone new to the Forex market, having online tutorials available is a must. Many Forex brokers who deal with online platforms offer these tutorials in the form of downloadable videos and text documents. There should be no doubt in your mind about what you are doing and it can give you confidence to start trading almost immediately.
At the same time, these Forex brokers should also offer advanced tools to anyone who has been trading in the Forex market for some time. These tools may not be used by the beginner, but they can really help you save time whenever you are a little more familiar with the platform you are using. It is also something that a beginner should look for as it lets you know that the platform you are using has the availability to trade with you as you learn more about Forex trading.
- Extra Fees
Some Forex brokers will charge you a fee each time you add money to your account or perhaps when you withdraw it. A better choice for Forex brokers would include someone who does not charge these fees. This can help you keep the money you earn in the Forex market and reinvest it.
Another thing to look at is the spreads. Even if each forex broker tells you that they don’t charge a commission, they make money with the spread, which means they will allow you to sell or buy a currency for a difference in pips. Sometimes this difference is fixed, other times it is variable. Many forex brokers offer a smaller, although variable spread; however, when financial news is released, market conditions can become very volatile and, if you trade during this period, you will be sidelined. Personally, I prefer fixed spreads because I know how much I pay to enter or exit the transaction in advance. Usually, the closest spreads belong to the EUR / USD pair, which is generally between 2 and 3 pips on average.
- Payment options
Another factor to note is the payment options. Is it difficult to get your money back? What vehicles does the forex broker use to return their money? Is it practical? There are a multitude of problems to look for when analyzing a forex broker. Including software, customer service and if they are registered with the competent authorities. The important thing is to do your homework in advance, so that you can focus on the fun part of making money with forex trading.