April 18, 2008, Newsletter Issue #50: How Do You Select a Currency Broker?

Tip of the Week

FXClub.com Tip: There are many Forex brokers available, and it can be tough to make a decision as all brokerage firms offer attractive deals.

The first consideration when deciding on a Forex broker is how much of a deposit you can commit. Some brokerages require no deposit, some as little at $250, and some as high as $7,500.

The next consideration is whether or not the broker is regulated, and if client funds are kept separate from operating funds. Are they insured?

The Forex market moves at lightning speed - how fast does each brokerage execute a trade? Is there a risk that they could put you on manual execution if they don't like your trading style?

Commissions vary also from brokerage to brokerage. Typically, lower commissions mean less support. If you are an MBA and understand the market well, you may not need any assistance. But if you are new to Forex, it is a good idea to choose a service that will provide help and guidance.

Other considerations include the trading platform itself and ease of use, the margins, slippage, and minimum trade size. Some brokerages only deal in large trades, while others permit smaller trades.

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Greetings,

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Thank you for your interest and good luck!
Forex Club, New York