If you are new to Forex trading and are looking for the best Forex system, how do you go about in finding it? If you’ve done a bit of searching, you probably know that there is no shortage of Forex brokers with websites that look great. What criteria should you use to filter out the ones that will have no benefit for you so that you are left with the best Forex trading system that will give you the most profitable trades?
The same criteria that experienced traders use. Read on…
Location:
Dismiss brokers that do not explicitly state a physical address on the company website. If the broker has an offshore exemption, complications might arise when you want to withdraw money from your account.
Regulation:
Omit brokers that are not registered with the proper regulatory authority in the country where they are situated. This will rule out the possibility of dealing with a fly-by-night operator. A broker based in the United States should be registered under the FCM. One located in the UK, should have an FSA registration.
Account:
Discard brokers that require a minimum deposit that is beyond your means. If a broker offers a standard account with a minimum deposit of $2000 and you don’t have this capital, then it is of no use to you. Look for one that can start you up with a mini-account of say $100 or $200. Some online traders even offer micro-accounts requiring a $10 or $25 deposit. Start small, get comfortable, then proceed.
Leverage:
Exclude brokers that don’t offer flexible margins. If the leverage offered is 100:1, this means the broker will lend you $100 for every dollar of your own capital. If it’s 400:1, it means $400 for every dollar of your capital. Decide what leverage you want. Leverage is inevitable as price deviation is usually set at a fraction of a cent in Forex currencies.
Spreads:
Don’t forget to consider spreads. If you are a day trader, go for a broker that gives you fixed spreads. If you plan to keep your Forex positions open for long-term trades, choose brokers that offer variable spreads. Forex brokers do not offer the same spread.
Platform Interface:
Rule out brokers with an uncomfortable platform. The trading platform is the environment in which you will be executing your Forex trades. It must be easy for you to use. When you try the demo first, make sure it corresponds to the paid version.
Platform Speed:
Don’t go for brokers offering platforms that don’t have speed in opening a trade. In some platforms, when you set an order to be transacted at a certain price, the console might display something like “the price has changed now” so you have to agree to a new price. This might happen several times before opening an actual trade and you don’t want this to be happening.
Automatic Trade Closure:
If a broker doesn’t offer this feature, move on. It lets you set a “limit” price or a “stop” price so that the trade can really close at that price.
Support:
Eliminate Forex brokers that are not reachable by telephone during Forex activity. You must write down the telephone numbers in case your PC fails or the internet connection drops. Email and chat are good but not good enough. If you speak a language other than English, multilingual support services are preferable.
Conclusion:
You’ve made it through the sifting algorithm. Congratulations! Hopefully you have at least one best Forex trader on your list.
If you don’t, then you need to start over with a new list.
If you do though, now the task is to find which of the brokers listed best match your trading style. If you are a day trader who will rely exclusively on technical, then your broker’s charting and technical analysis must be sufficient so that you can execute profitable trades.
If you are a trader who will rely on fundamental analysis, then your broker must provide you with “breaking news” on vital economic data releases. This could mean the difference between a profitable and a losing Forex trade.
The decision to execute a Forex trade is yours. Its accuracy depends on the information provided by your Forex trader. So you need to ask the right questions. In conclusion, a best Forex trader is not one that merely passes through the above “if then” algorithm but one that also suits your personal trading style.
