Every Forex trader needs a Forex broker. Choosing a Forex broker is one of the most important parts of starting a career in Forex trading. While you can change brokers whenever you desire, it is still important to get the right broker for you, to avoid any hassles later down the line.
Beginners aren’t going to require as much as more experienced Forex traders. Those who trade for a living and have lots of past experience in Forex trading should generally see more success with more advanced Forex brokers. However, if you are a beginner, you won’t want to go to a broker that is designed for a professionals.
As a beginner, what you need is a broker that has a straightforward user-interface, with a strong customer service team and preferably lots of learning resources. You need a broker that will introduce you to the market for currencies in the most smoothest way possible, because Forex trading can be pretty daunting to the average beginner.
The Forex broker you choose should be regulated, have fixed and reasonable spreads, have a clear and easy-to-use trading platform that you can at least learn to understand, have good customer support, offer a lower minimum deposit, provide leverage on demand and not charge any hidden fees at all. This might seem like quite a lot to research, but these are really only the basics. You can find all of the information you would ever need on a particular Forex broker by simply using internet search engines.
If you cannot find an answer to something, you should be able to call them up and get an answer directly from them right away. This will be a good chance for you to test a broker’s customer service and support too. If the broker you are looking at cannot answer all of your questions fully, provided that they are reasonable questions, then you should just move on. If you do get an answer from a broker, make sure that their answer is truthful by doing some of your own research. It is best to be safe rather than sorry, at the end of the day.
Forex brokers for beginners are usually brokers that provide a really simple service and allow beginners to get to grips with Forex trading, before they move up with their careers. As a beginner you might actually end up staying at your first broker for months or even years, before moving onto another broker. Some Forex traders stick to their first brokers forever. It really all depends on the individual Forex trader. Remember, it is perfectly fine to sign up to multiple Forex brokers at once and this is actually a good idea, because it will allow you test the different platforms, features and services of each broker you sign up with.
In conclusion, Beginner Forex traders should choose brokers that preferably offer straightforward features and services, strong customer support and useful learning resources. Beginners should not try to dive into the more advanced Forex brokers from the start, as they will most likely end up getting confused and give up after a while. Forex trading is difficult and you need to take one step at a time: it is definitely not something that you can rush, or at least not effectively and successfully.
There might come a time when, as a Forex trader, you would like to change your Forex broker. Fortunately, changing your Forex broker is a pretty straightforward process.
You might want to change your Forex broker for a number of different reasons, for example you might want to change from a long-term strategy to a day trading one. In this case, you might require lower spreads than your current broker, so you would change to a broker that offers lower spreads. Another example could be if you trade the news, because in this case you might want to move to another broker which can fill your orders faster, so that you don’t miss out on a short-term opportunity in times of great volatility. No matter what your reason, once you have found a new broker to change to, it’s just a matter of opening a new account.
There’s actually no need to close your old account. If you had a bad experience with your current or past broker, you might then want to close your account and open a new account at your newly chosen Forex broker afterwards, but if you haven’t had a particularly bad experience you may as well leave your old account open. You are allowed to operate two accounts at a time. There are no rules against having multiple accounts at various brokers. In fact, you might well want to in order to take advantage of the various resources each broker can provide you with.
Changing your Forex broker is as simple as leaving or closing your old account and opening an account with a new broker. If you don’t close your old account, you might want to first withdraw your money to deposit it into your new account at your new Forex broker. Other than that though, the process is just the same as starting up for the first time.
It is pretty common for Forex traders to change their brokers after a while. Some traders and investors will change over to new brokers because their old brokers are scammers or frauds, but this is going to be more of a rarity. Usually Forex traders will open accounts up at new Forex brokers in order to take advantage of what they provide and what they have to offer. Beginners, once they become more experienced, also tend to change over to new brokers eventually because their demands change and they require more advanced brokers.
In conclusion, changing your Forex broker is just like starting up for the first time. Whether you close your old account or not doesn’t matter: changing from an old broker to a new one is simply a matter of signing up for a new account at your newly chosen broker. Whatever your reason may be, you can change to a broker as you wish. If you enjoyed the service of your previous broker, you aren’t obliged to close your old account: Forex traders can operate multiple accounts at various brokers if they wish to, which might be an idea if you require different features from different brokers.
Opening a Forex trading account is very easy nowadays. All you need is a computer, an internet connection and some spare capital, or in other words money or cash in your bank. In fact some Forex brokers you can sign up to using a mobile or tablet device and you can even start trading currencies from the same device, since some brokers have all sorts of trading platforms for you take advantage of nowadays.
Once you are connected to the internet, whether it be through a computer or some kind of handheld device, you may then choose a Forex broker. Choosing a Forex broker is a process in itself, but once you have chosen one, it should be pretty easy signing up and opening a Forex trading account with your chosen broker.
When signing up, the Forex broker will most likely need some basic information from you. They might also ask about your experience and so on, before you can have your account opened. Some Forex brokers might even ask you to scan documents and such, but generally the sign up process it pretty smooth and doesn’t take very long. Of course it will take longer if you have to start scanning documents, but you could be trading the same day with an active, open Forex trading account with some brokers.
After you have your account, you will need to deposit some money, so that you have some capital to invest in the live Forex market. Nowadays, Forex brokers offer very low minimum deposits, meaning that you really don’t need much money at all in order to trade live currencies. Once you have made your deposit, you should be able to then start trading right away, so the sign up process is extremely simple really. Signing up to a Forex broker is pretty much like signing up to any other kind of website you have signed up to in the past. The most important thing is to make sure you choose the right Forex broker that is safe and suitable for you.
In conclusion, opening a Forex trading account with a Forex broker is dead simple. All you need is a device that is connected to the internet and some money in your bank that you are willing to risk losing. Once you have these, all you need to do is then find a Forex broker. After choosing one from the many available, you may then open a Forex trading account right away. The sign up process is usually made purposely simple for you and is almost always very straightforward. Pretty much anyone can get trading nowadays with very little capital indeed, since the minimum deposits are generally very low. The key is to make sure you choose a good Forex broker and don’t deposit more money than you are willing to lose, as although you could start profiting which is the whole idea, there’s always a chance that you will lose your money so it is best to be safe rather than sorry.
Forex brokers need to make money and for most brokers, it is the spreads that are their most important source of revenue. However, some Forex brokers offer spreads that are particularly high and some brokers offer spreads that are simply too high to work with at all.
A spread is the difference between a particular currency pair’s buy and sell prices. As you trade, your spreads are wider than they technically should be, because your Forex broker needs to allow room for some revenue. As you trade, you are technically bringing in revenue for your Forex broker, but don’t think they are stealing from you, because they aren’t. Spreads are just a way in which you can pay for your broker’s services.
It is a good idea to shop around though. You shouldn’t go to a Forex broker simply due to the fact that they have lower spreads than their competitors, but it is a good idea to factor in spreads when choosing a Forex broker, because spreads will directly affect the extent of your profits and losses.
High spreads should be avoided when trading currencies, especially if you are using a day trading strategy that involves lots of short-term trades. With a long-term trade, spreads won’t be too much of an issue. On the other hand, if you are scalping the Forex market for example, you will be aiming to make lots and lots of short-term gains which will require low spreads. If you are scalping with high spreads, it will be very hard for you to make a profit overall.
When it comes to spreads, the lower they are the better. However as mentioned already, don’t choose a Forex broker simply because of the spreads that they offer. Having said this, you should really never consider going to a broker that doesn’t offer fixed spreads, as fixed spreads will always stay the same and so you will be much safer with these. The opposite of fixed spreads are floating spreads. Brokers with floating spreads can change their spreads as they please, which is bad for you and is also impossible to plan, which is a pain when developing a Forex trading plan.
In conclusion, some Forex brokers will offer high spreads. You should really try to find a broker with lower spreads, in order to increase your chances of profiting in the Forex market. High spreads will be particularly troublesome when using any kind of Forex trading strategy that involves placing lots of orders in order to reap short-term gains. They should really be avoided in general though, because they will ultimately cut your earnings significantly in the long run, whatever your trading strategy may be. Fixed spreads must also be standard and you should never go for floating spreads, as they can cause you to draw unnecessary losses. Finally, when choosing a Forex broker, do take into account spreads but don’t base any of your decisions solely on spreads, because they aren’t the single most important part of Forex trading: there are other things to consider too.
Having more than one Forex broker is actually a good idea. There are many reasons why you should seriously consider opening multiple Forex trading accounts.
A lot of Forex traders like to trade with a single broker, rather than having to login to various brokers’ trading platforms and having to get used to each brokers’ unique features.
First off, you should open accounts with different Forex brokers because it will allow you to see which broker is best for you. Every broker is different and you can’t just go to the first one you see and hope for the best, nor can you choose the one you think is the best and hope that it truly is the best for you, because it might not be. By having multiple accounts, you will be able to find out which broker is truly the best for you as an individual Forex trader.
By having more than one Forex broker, you will also be able to put different Forex trading strategies to work. Some Forex brokers will be better for day trading strategies like scalping, whereas other brokers might be more suitable for long-term trades. If you want to buy and hold some of your trades for longer, you might sign up to a Forex broker that can offer a better service for long-term traders. However, if you also want to day trade and the same broker’s spreads are too wide, you might then decide to have more than one Forex broker in order to allow you to use both Forex trading strategies effectively.
There may also be other reasons why you might want to have more than one Forex broker. Different Forex brokers will offer different features and the more brokers you sign up with, the more resourceful you will become as a Forex trader. Some Forex brokers also offer social Forex trading networks too, so while you might be more into trading currencies traditionally, you could still participate in more social networks for Forex traders too without having to drop your everyday behaviors.
Some Forex brokers even offer opportunities for those who like to have a bit of gamble and even if you aren’t a typical gambler, you might still want to have a go just to take a break from your typical Forex trading. None of this has to involve any kind of risk, since most Forex brokers will offer demo accounts to their users nowadays, so you can actually take advantage of all sorts of features that brokers offer today without having to risk a penny of your own capital.
In conclusion, there are lots of reasons why having more than one Forex broker can be a good idea. There is no real point in limiting yourself to just one broker, because you don’t have to risk any money signing up with more than one broker. Forex brokers allow you to sign up for free usually nowadays, because most offer demo accounts which allow you to test their trading platforms with virtual currencies. You might want to have more than one Forex broker because you might want to make sure that you find the right broker, use more than one Forex trading strategy, take advantage of various resources provided by different brokers or you may simply want to network or have a bit of fun with a less traditional Forex broker. The possibilities are endless, but if you currently only have one open Forex trading account, you should seriously consider having more than one Forex broker.
Forex traders usually only think about themselves and what they can do in order to make more money for themselves. This is understandable, however it is good to know how Forex brokers make their money, as you will be the one paying for their services as an individual Forex trader. It is your right to know where your money is in fact going.
Forex brokers make their money in two different ways. The first way in which they make money is by taking a commission on every trade you place. ECN brokers will take a direct commission on each of your trades, however you will most likely be starting out with a market maker as a beginner and these brokers only take their commissions through the spreads.
Market makers make their money by building their fees into the spreads that you will receive on your Forex trading platform. Spreads are relatively simple. They are the differences between the “ask” and “bid” prices of currencies. The ask price is the price at which Forex brokers are willing to sell a currency at, and the bid price is the price at which brokers are willing to buy a currency at. You don’t need to get into detail. As long as you go with a broker who offers fixed and reasonable spreads, you will have nothing to worry about.
Forex brokers also make money by earning interest when you apply leverage to your trades. When you leverage your money, you essentially start controlling much greater amounts of capital. Since you are controlling more money, the Forex broker starts to earn more interest. This is not a cost to you of course, it is simply another revenue source for Forex brokers.
Another way in which Forex brokers make their money, is by taking the opposite side of a Forex trader’s position, allowing them to profit when the Forex trader loses. This will only be done by market makers in the industry. However, you have nothing to worry about as this is simply how they work. Once you are making a lot of money, then you might want to consider opening an account with an ECN broker, but until then a market maker is absolutely fine. A lot of Forex traders remain profitable with market makers for years.
Market makers aren’t evil by any means, they simply work differently from more high-end brokers. If you are just starting out, it would be highly recommended to go with a typical retail Forex broker. Once you are making a significant amount of money, or perhaps when you get to a stage where you are considering trading full-time, then might be a good time to think about signing up to a more high-end broker. As a beginner Forex trader though, it probably isn’t worth going straight to a high-end broker. You need to take one step at a time. You will know when you need to change your broker anyway, when the time comes.
In conclusion, Forex brokers make their money mainly through the spreads you will see on your Forex trading platform when looking at your price feeds and placing trades, direct commissions if you are trading with an ECN broker and interest which they earn when you start applying leverage to your trades and controlling more significant amounts of money.