How to Choose the Right Broker

There are literally hundreds of Brokers trying to get your business. The importance of choosing the right broker for your style of trading and risk appetite is of paramount importance. Using the same approach at different brokers will not necessary deliver the same result. There a few important factors to base your decision on. They are:


  • The reputation and size of the broker
  • The business model of the Broker, e.g. DD, STP, ECN, DMA, etc. (ECN or DMA recommended)
  • Regulated by a reputable Financial Services Board
  • The maximum leverage allowed. Can be anything from 50:1 to 500:1 or more.
  • The size of the Spreads and/or Commissions  (See real-time Spreads of leading Brokers)
  • The minimum amount of Equity required to open an account
  • Execution Speed when doing a transaction
  • The type of trading allowed, e.g. Scalping, Hedging, EA's, etc.
  • The size of their margins required when placing pending orders, stoplosses, profit targets, etc.
  • Bonusses offered on sign-up
  • The type, quality and speed of customer service - especially on withdrawal of money
  • The Platform(s) supported, e.g. Metatrader 4
  • Offering free VPS service?

To give proper guidance on all these issues will need a dedicated website with many pages. We therefore have used some material from the website http://www.100forexbrokers.com for the first and very important issue on our list about the business model a broker uses.

We also like to refer you to http://www.forexpeacearmy.com/public/forex_broker_reviews for their reviews and ratings on brokers.


Here is a shortlist of STP/ECN/DMA Brokers we feel comfortable to trade with that also offer some of the advantages based on our list of criteria:

FXOpen is the broker we mostly use (we have more than one live account with them) and is a true ECN broker with low spreads, competitive commissions and no margins for pending orders, stoplosses, etc. They also offer high leverage (up to 1:500) for those who want it . Scalping and Hedging is welcomed.

Forex Training

(Others to be added shortly)

 

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