A question I often get asked is “How do I choose a Forex broker to use?” Today, I’ll tell you four of the most important things to look for when picking a broker.
But before we cover those four keys, you first need to make sure to find a broker who isn’t a middle man. In other words, you don’t want a broker who uses a dealing desk. A dealing desk is like a market maker or liquidity provider. Our goal is for your trades to go directly to the market, so you need to have a no dealing desk (NDD) broker.
My name is Tyson Clayton, Senior Currency Strategist for Market Traders Institute. I’m a master Forex instructor with over 20 years of experience teaching student traders how to take ultimate control over not just their finances, but their lives.
Here are my four top things to consider when choosing a Forex broker.
Security is my number one concern when choosing a broker. Is your broker licensed and regulated by the proper authorities? If you can’t trust them, then you probably shouldn’t be using that broker.
The reason why I love the currencies markets is because the leverage is amazing. Brokers can provide you leverage that lets you trade a smaller account, say $1,000, as if it were a much larger $50,000 account. For example, a 1 percent move in the currency market trading on a $50,000 account could bring you a $500 return. So you’d be making a 50 percent return on your $1,000 investment. Leverage is very important because it allows you to maximize your returns.
Brokers should give you access to a demo account so you can test trading strategies before placing actual live trades. You should always test your strategies in the demo account first to make sure that they are profitable without having to risk your money. Keep in mind that you should open a demo that is realistic to the actual account size you’ll be using to trade. If you make a mistake, you can always reset and test multiple strategies in the demo account.
Customer service may not be the most exciting thing to talk about because you probably won’t need it very often. But when you do have a question and need a fast response, you need to make sure that your broker is available to help.
For more information on how to find and use a broker, you can sign up for a free training session led by a Market Traders Institute analyst.
For more tips and strategies on successful Forex trading, visit MTI’s YouTube channel at www.youtube.com/c/Markettradersinstitute/videos.