A forex broker, also known as a forex brokerage company, is an individual or institution (financial institutions, banks, dealers, etc.) that fulfill retail traders' orders (sell, buy, etc.). Us forex brokers can provide liquidity to the trader and also offer services such as managing accounts, providing trading signals, and a forex education program.
New forex traders should choose a reliable, trustworthy, and effective broker to help them avoid being scammed or cheated.
One of the biggest problems forex traders face is choosing the right forex broker to suit their trading needs. This article will tell you the best way to do it in three simple advances.
Forex trading is all about money. Us forex brokers make money when traders open new positions and trades. The broker will credit you with some pip (the last digit of the rate) when you open a new position. For example. EUR/USD 1 point = 0.01; for EUR/USD 3 pips spread (The difference in the ask and bid prices) from your balance. There are two kinds of spread: fixed and variable. As a trader, you should always seek out a low-spread broker. Sometimes you may find a 0 spread broker or 0.5 pip spread brokerage. These sound great but you need to ask your broker before opening an account.
The second thing to look out for in a broker is regulation. Make sure that your broker has been licensed and regulated (NFA, FSA..). This is important to avoid scams as there are many non-regulated forex brokers looking to eat your cash. The third and final step in choosing the best us forex brokers is to make sure you have access to multiple trading platforms and terminals. A good broker will offer you an award-winning platform like Meta Trader 4. This is a popular and easy-to-use trading platform. There are also a variety of platforms such as Currenex, Trading Station II, and a web-based platform. Metatrader's acceptance of expert advisors and costumed indicators is the reason most traders choose it.
A lot of forex brokers will encourage traders to choose a theme and give them a FREE bonus. However, it is important to not be deceived by these bonuses. You can also open a demo account to get to know the broker better.