Questions You Need To Ask Yourself to Get The Best Forex Trader
Foreign exchange trading or forex trading is one of the least pursued ways to make money over the internet easily. This is because people are wary of shelling out money for something with no guaranteed returns.
However, it is important to keep in mind that in any investment undertaking, the higher the risk you take, the higher the return. This does not mean though that you should just settle for just any forex trading companies in the market.
On the contrary, forex trading can be quite complicated so it is important for you to get the assistance of a reputable and reliable forex broker that will also provide forex trading tools that show daily forex signals.
In order to achieve this purpose, here are some questions you need to ask yourself first: Customer protection is an essential consideration when you are choosing a forex trading company.
After all, the forex industry in itself is not a heavily regulated industry, it is your discretion whether you want to trust a particular company or not. Keep in mind that the company should be legally registered though. So ask yourself these questions:
Is the broker really regulated?
Are their client's funds insured against potential identity theft or fraud?
Is your investment insured against bankruptcy?
What regulatory organizations is available and is the forex trading company registered with them?
Another aspect you need to consider is the word of mouth or testimonial of other clients. It is not only the client's testimony though because you also need to do your own research about the company.
Ask these questions when looking into the forex trading company's reputation:
But of course, probably the most important factor is the actual execution; this is where the money making mechanism from forex trading comes in. Look into their speed, their business model, and the maximum trade size they offer. Then ask yourselves these questions:
Is the forex company a Market Maker, a no-dealing desk broker, or an ECN?
What is the speed of order execution?
Are your orders automatically executed or is manual verification required?
What is the maximum trade size you can avail of without requesting for a quote?
Are all trades offset?
Spread and slippage are critical in forex trading. You need to find out the specific tactics of the forex trading company before you decide to go for them.
How tight is the actual spread?
Is the spread fixed or variable?
How much is the expected slippage for fast moving and normal markets?
Look into their margin required and even the commissions they will receive. Margins vary from one trader to another; find out which margin you are really comfortable with:
What is the required margin? 0.25%?, 0.5%?, 1%?, etc
When the forex company change currency pairs? Daily or
What point is the margin call of the forex broker?