What to Look for in a Forex Broker

You can find thousands of Forex brokers. Searching the web will reveal a large number of forex brokers. Finding the right forex broker is not easy. You can find out more a good broker by following these tips.

In choosing a Forex broker, you should pay attention to the spread. A forex broker offering a narrow pips margin will allow you to make more money. If the spread is large, it is hard for traders to hit their targets. Think about this example: we place a sale order as we anticipate the market to move down. To reach our profit goal, we must include the pip difference in our calculation. The formula will look like this: Target profit + pip-spread = 100pips. 110pips

Second tip to finding a reliable broker is the leverage. A broker must offer a leverage of 1:50. This leverage is considered high. For a beginner, he should try to get a leverage at least of 1:200. A broker might offer up to 1400:1 leverage. A beginner would benefit from a leverage ratio of 1:200, as they could use less money but still be able to control more shares.

A solid history is the third tip on how to become a successful forex broker. The broker must be licensed in the country where they are based. Forex brokers who are not regulated can be referred to as illegal forex brokers. A broker who was illegally operating could not open a trading account. Malaysia, for example, is one country that makes it illegal to exchange money with others. Even though the brokers call it a broker, this is illegal. Malaysian government has recently printed this in newspapers. Many people have been cheated.

These tips are intended to be helpful. Search for and try out other brokers by opening a real account. If you never try, you will not know what the broker has to offer. Joining a forum can also help you learn more about your broker.

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