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Choosing a Forex Broker
In order to trade in the Forex market you will need to find yourself a broker. A broker is someone who executes trades according to your wishes and earns a commission on each trade.
But there are so many brokers out there competing for your business it can be hard to figure out which one is best. This article will give you as idea of what to look for.
Transaction Costs. In the forex market, brokers are paid via the bid/ask spread. There should be no hidden fees or charges to trade. However, there may be additional charges to access certain reports and optional services.
Obviously the smaller the spread the better. Pip spreads vary by broker (and also by currency pairs), so shop around for competitive rates.
Currency Pairs Available. All brokers should at least have the big seven currencies ((AUD, CAD, CHF, EUR, GBP, JPY, and USD). But if you plan on trading New Zealand dollars or Danish krones, you should be sure that the broker is able to do so.
Immediate Execution of Orders. Currency prices are constantly moving up and down and any delay in the execution of your order can cut into your profits or add to your losses. Of course its possible a delay will help you, but it never seems to work out that way does it? Look for a broker that can consistently execute your trade at the price you see on your screen. An occasional delay is understandable, but if it happens frequently find yourself a new broker.
Free Tools. In order to analyze currency prices, spot trends, and plan entry and exit points you need access to charting and technical analysis tools. Most brokers offer basic services free of charge with an expanded array of tools for an added charge.
Minimum Account Balance. As a small investor you will need a broker that does not require a large balance to open an account. Many brokers today will let you open a mini-account with as little as $300.
Margin Requirement. The lower the margin requirement, the more leverage you have. If a broker allows you to use 100:1 leverage, that means you can trade $100,000 in currency for only $1,000. You can use margin to rack up huge profits. But don't margin yourself too much or you will find yourself wiped out fast.
Superior Customer Service. This is something traders often overlook when choosing a broker and later regret it when they need assistance. A quality broker should respond quickly to any question you have. They should have knowledgeable reps available 24 hours a day by phone and email.
A User-friendly Trading Platform. Some brokers require you to download a trading program to your PC in order to make trades. Others let you make trades directly over the web. Pick a few brokers out and sign up for a free demo account. You can trade with play money while you test out their software and see which one works best for you.
Recent Forex News
Forex Technical Analysis Reports (ActionForex.com)
Technical analysis reports from selected analysts around the world on forex market. Available in ActionForex.com
Euro Crosses: Corrective Rallies Will Offer Bearish Trades
There are a number of technical factors that suggest a significant top is in place. There are 5 waves up from January 2007 and the EURGBP reversed just ahead of parity. The decline is probably in its early stages and a move back to the former 4th wave, which is...
A Clear Channel And Immunity To Risk Trends Stabilizes AUDCAD Range
A rebound in risk appetite has thrown many, former ranges into disarray. However, the AUDCAD congestion we have pointed out will both benefit from a sustained rise in yield demand and even a tumble back into risk aversion. Taking a critical look at this pair from a technical and fundamental...
Chart Of The Day: USD/JPY
Coming into the New Year, price action on the key USD/JPY pair (a daily chart of which is shown) has made a very decisive break above a strong downtrend resistance line that has been in place since at least September 2008. In the process, the pair can now be considered...
Euro Expected to Form a Low Soon; British Pound Breakout Trade
I wrote yesterday that “the decline from the July 2008 high (1.6040) can be counted as a 5 wave drop (wave 5 is truncated). 5 waves down at this degree of trend indicate that the long term trend has changed and that a multi-year bear is underway.” The surge through...
The Pound Stalls As The Euro Tumbles: The DailyFX Analysts Find The Opportuni...
As the first full week of the New Year wears on, traders seem to be taking advantage of the influx of liquidity and volatility to turn the market back to trends. However, the high correlation through the the fourth quarter of 2008 seems to be breaking down with the european...
Newsfeed display by CaRP
Forex Fundamental Analysis Reports (ActionForex.com)
Fundamental analysis reports from selected analysts around the world on forex market. Available in ActionForex.com
Eurozone Inflation Drops To 26 Year Low
U.S. Dollar Trading (USD) was mixed again today gaining against the EUR and JPY but losing ground to most others. US economic data was weak with Durable Goods Orders falling -1.5% in November and Pending Home sales dropping -4%. A bright note was the rebound in December Non Manufacturing ISM...
Market Highlights
The weakness in Eurozone data continued to surprise pundits: last night's December CPI estimate of 1.6% (see below), below both expectations and the ECB's stability threshold, and pointing to deeper rate cuts ahead, knocked the EUR and boosted the USD. Commodities continued to recover, as the risk-climate retains its New...
ThE Fed Fears The Worst
Trading in equities very closely mirrored yesterday's volatile session. It is clear that investors are still uncertain, as direction in the Dow has been largely range-bound. Equities have swerved between two extremes, at one time positive by more than a hundred points. Even though the excitement and enthusiasm behind the...
US Dollar Gains Against Euro, Yen Despite Dismal Data, Slump Versus High Yiel...
The US dollar has consistently been trading stronger than the euro, Swiss franc, and Japanese yen but has also remained weak versus the British pound and the commodity dollars. Much of this price action had to do with emerging signs of building risk appetite, such as the slow decline of...
Greenback Mixed On Gloomy US Data
The dollar gained against the euro and yen but surrendered part of its overnight gains after another dose of weak US economic data. Federal Reserve officials saw 'substantial' risks to the US economy, the FOMC minutes released Tuesday showed. Sterling gained against the euro for a second day on speculation...
Newsfeed display by CaRP
Forex Technical Analysis Reports (ActionForex.com)
Technical analysis reports from selected analysts around the world on forex market. Available in ActionForex.com
Euro Crosses: Corrective Rallies Will Offer Bearish Trades
There are a number of technical factors that suggest a significant top is in place. There are 5 waves up from January 2007 and the EURGBP reversed just ahead of parity. The decline is probably in its early stages and a move back to the former 4th wave, which is...
A Clear Channel And Immunity To Risk Trends Stabilizes AUDCAD Range
A rebound in risk appetite has thrown many, former ranges into disarray. However, the AUDCAD congestion we have pointed out will both benefit from a sustained rise in yield demand and even a tumble back into risk aversion. Taking a critical look at this pair from a technical and fundamental...
Chart Of The Day: USD/JPY
Coming into the New Year, price action on the key USD/JPY pair (a daily chart of which is shown) has made a very decisive break above a strong downtrend resistance line that has been in place since at least September 2008. In the process, the pair can now be considered...
Euro Expected to Form a Low Soon; British Pound Breakout Trade
I wrote yesterday that “the decline from the July 2008 high (1.6040) can be counted as a 5 wave drop (wave 5 is truncated). 5 waves down at this degree of trend indicate that the long term trend has changed and that a multi-year bear is underway.” The surge through...
The Pound Stalls As The Euro Tumbles: The DailyFX Analysts Find The Opportuni...
As the first full week of the New Year wears on, traders seem to be taking advantage of the influx of liquidity and volatility to turn the market back to trends. However, the high correlation through the the fourth quarter of 2008 seems to be breaking down with the european...
Newsfeed display by CaRP
Forex Fundamental Analysis Reports (ActionForex.com)
Fundamental analysis reports from selected analysts around the world on forex market. Available in ActionForex.com
Eurozone Inflation Drops To 26 Year Low
U.S. Dollar Trading (USD) was mixed again today gaining against the EUR and JPY but losing ground to most others. US economic data was weak with Durable Goods Orders falling -1.5% in November and Pending Home sales dropping -4%. A bright note was the rebound in December Non Manufacturing ISM...
Market Highlights
The weakness in Eurozone data continued to surprise pundits: last night's December CPI estimate of 1.6% (see below), below both expectations and the ECB's stability threshold, and pointing to deeper rate cuts ahead, knocked the EUR and boosted the USD. Commodities continued to recover, as the risk-climate retains its New...
ThE Fed Fears The Worst
Trading in equities very closely mirrored yesterday's volatile session. It is clear that investors are still uncertain, as direction in the Dow has been largely range-bound. Equities have swerved between two extremes, at one time positive by more than a hundred points. Even though the excitement and enthusiasm behind the...
US Dollar Gains Against Euro, Yen Despite Dismal Data, Slump Versus High Yiel...
The US dollar has consistently been trading stronger than the euro, Swiss franc, and Japanese yen but has also remained weak versus the British pound and the commodity dollars. Much of this price action had to do with emerging signs of building risk appetite, such as the slow decline of...
Greenback Mixed On Gloomy US Data
The dollar gained against the euro and yen but surrendered part of its overnight gains after another dose of weak US economic data. Federal Reserve officials saw 'substantial' risks to the US economy, the FOMC minutes released Tuesday showed. Sterling gained against the euro for a second day on speculation...
Newsfeed display by CaRP