The Forex traders need Forex brokers to act as a link between Forex market and them in order to facilitate the execution of trade orders and other activities. A broker is an individual or a company which buys or sells currency orders according to the decision of the investor. The brokers earn money by the way of commissions, fee or through spreads. A Forex broker has to be registered with a big financial institution like bank which provide the funds required for facilitating margin Forex and CFD trading. For protection against frauds and abusive trade practices it is necessary that a broker is registered with a regulating body. In Unites States a broker should be registered with Commodity Futures trading commission (CFTC) or Futures Commission Merchant (FCM).
Searching for Forex brokers
Before you start trading Forex you need to set up an account with the Forex broker of your choice. When you search for the Forex brokers you may be overwhelmed by the number of brokers offering the services online. But the best thing is to research for some time in order to understand the services and fees charged by different brokers
How to select a good Forex broker?
Selecting a good broker for your Forex and CFD trading needs is important because only a good broker can help you in trading effectively and successfully. The best option to know about some good Forex brokers can be the word of mouth. Ask your friends and colleagues if they know a good broker and whether they have used the services of a good Forex broker. Ask recommendations about some good brokers in your area which your friends and colleagues might know.
The other good method of selecting a good broker is to search about some FX brokers online and contact them to know about them better. By knowing their service response time and answering your questions you can get to know about the quality of service they can provide. Also check all the fee and commission structure with them and ask about every policy they have.
A broker who provides fast order delivery with minimum or no slippage is the best. The policies regarding slippage should be clear and the automatic execution of orders should be offered. They should be able to provide you the information that how much slippage can be expected under both fast moving and normal conditions. Check out the brokers like the one at xtrade, CFD trading services is what they offer, but they also offer reliable Forex services.
Know about the fees, what are the spreads offered? What are the requirements of margin and how it is calculated with them? Know everything you can know before you select a broker if you are looking to engage in Forex or CFD trading. Make everything clear and be sure about all the policies and their implications on you.
A good method is to try the demo account offered by Forex brokers which helps you to trade real time with demo money. You don’t need to worry about the money losses and you can test the platform and services of the broker first. After you are satisfied you can go ahead with a live account with the broker.