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3 Tips for Selecting a Forex Broker

The forex market is one of the largest and most liquid in the world, with $5.1 trillion traded per day. As such, there are numerous brokers to choose from, all of which differ in their qualities and offerings to the user. It is worth researching thoroughly to see which will be most suited to your trading style/strategy, but here is some information to get you started.

Demo Account

The first aspect you should check of a forex broker if you are an inexperienced trader is whether they offer the ability to open a demo account. These can be incredibly useful to those who are not well acquainted with the volatility and overall franticness of the forex market, allowing them to trade using ‘fake’ money.

Being able to practise trading forex without losing money is truly invaluable, and can give any aspiring forex trader instant access to the market which they will be dealing with, as well as the necessary basic skills and knowledge to become a successful forex trader.

Currencies on Offer

Every forex broker varies in what they offer in terms of currency pairings, although the majority will still offer the major pairs such as GBP/USD. Some will differ in the exotic and minor pairs they offer, though, so it is worth checking if these are offered if you already have a preference for a pairing.

Since each pairing has its own market behaviours and is influenced by a unique set of factors, you should do as much research as possible to see which are most volatile and which are steadier, and check to see if the broker offers effective tools which can help analyse currency behaviour.

Commissions

Finally, check how much commission is charged on each transaction you make, as well as the minimum deposit which you need to get started. It is worth noting that it can be hard to make a profit from trading forex with a meagre initial investment, so even with low deposit brokers you should still be cautious.

Make sure the commissions charged are not too high, as this could reduce your potential profits in the long run.

There are plenty of forex brokers to choose from these days, so make sure you do plenty of searching before choosing the one which you think will best serve your trading needs. Look at the currency pairings on offer and the functionality of the broker overall to help you make your decision.

 

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