With so many different brokers online it’s easy to be swamped with choices. Below is a checklist of things to consider when choosing your broker.
1. Check with the Commodity Futures Trading Commission (CFTC) and National Futures Association (NFA) to see if they are members. Look for firms that have clean regulatory records and
check to see if there has been any disciplinary action against them. NFA’s website : www.nfa.futures.org
2. Bid/Offer Spread: Compare amongst several brokers to see which is offering the lowest. This shouldn’t be the only factor in choosing your broker, but needs to be considered.
3. Demo Account: 99% of all online Forex brokers offer a free demo account. Be sure to test the trading and charting platforms that each broker uses. It is important that you are comfortable using it and that it has the features you require to trade ie. Certain technical indicators on the charting platform.
4. Customer Service: Very important in choosing which broker you go with. Be sure that you can contact them by email, instant message of some kind and of course by phone. It’s best to have a couple of direct lines to people, not just a random guy who answers the phone then transfers you.
5. Trading/Charting Platform: Most brokers will offer one of two options; web based software or client-based software. Web based is hosted on the broker’s site and you won’t need to install software on your own computer. This will give you the ability to trade from any computer that has an Internet connection.With client-based software you will only be able to trade from the computer your down load the software on. This option typically runs faster. Depending on your own personal situation you will need to decide which of these two platforms is what you need.
6. Minimum Account Size: Some brokers require a min. account in order for you to trade. Depending on the capital you have to risk, you will need to know what this minimum is before choosing your broker.
7. Lot Sizes: The availability of trading different lot sizes can vary from broker to broker. Most will offer the standard 100,000 units but make sure you choose a broker that allows you to choose mini lots of 10,000 and micro lots of 1,000. This will allow you to be as flexible as possible in your trading.
8. Guaranteed Limit and Stop Loss Orders: A lot of brokers are offering theses guarantees in order to gain customers. Now of course nothing is 100% guaranteed, so you should read any fine print and ask a broker the specifics behind this. Ask them how often a limit order and or stop loss order is filled at the exact price without slippage. And ask them to be specific. If they aren’t able to give you any hard figures than this should count as a strike against the broker.
9. What You See Is What You Get (WYSIWYG): This is a make or break issue when it comes to choosing a broker. When you see a quote and click on it to buy or sell, that is the price you should be getting. Be sure your broker stands by their quotes.
