You will have to decide whether you want to trade by yourself or register with a forex broker. You can trade on your own if you want, but we don’t recommend it. Why? If you’re new to the Forex market, it’s easier and more secure (and cheaper) to let a professional handle you’re trading for you. We hope this article helps you narrow down the best forex broker.
Who is a Forex Broker?
A Forex broker is an individual, organization, or company that disappears at the beginning of the day and reappears after the market closes. As opposed to retail traders who are buying and selling using their own funds, a forex broker’s role is limited to introducing buyers and sellers to one another via electronic trading systems online. In fact, they will not have any way of reaching you until such time as when it becomes necessary for them to do so (i.e., if there is a problem with your account).
What will you gain from hiring a broker?
Forex brokers offer a service to traders by providing the technology infrastructure, leveraging the scales of large financial institutions for capital-raising purposes, inventory management systems that effectively use their trading resources, and other services such as a professional team of analysts who prepare reports, charts, news updates and market forecasts.
It is worth mentioning that these days most forex brokers have in-house software packages either developed or purchased from reliable providers. These allow them to track their clients’ trades real-time and provide analysis on what’s happening on the market at any point in time. There are two types of Forex brokers: “retail” brokerages that cater specifically to individual retail traders like you (i.e., individual investors) and “institutional” brokerages that cater specifically to institutional traders (i.e., large investment or commercial banks).
The FX broker allows traders to hold an account in their preferred currency of choice; some brokers will even allow you to trade with multiple currencies at once, although they may charge extra for this kind of flexibility (it depends on the provider).
Currency Pairs & Number of Fractions Traded
Each Foreign Exchange company provides traders with various currency pairs and the option to trade with as many positions as they want, based on their trading accounts’ allowed leverage (a percentage value that indicates how much capital you may borrow from your broker).
Most Forex brokers offer several different money deposit methods to their clients, but some preferred payment types (such as bank wires) are non-negotiable. For example, you may choose your broker based on whether or not they accept credit card payments and even how much they charge for this kind of transfer; however, if you draw a negative balance, then most companies will either limit your trading activities until the problem is solved or even close your account temporarily until you solve the issue by providing additional funds to cover for all losses that may occur during this process.
Any experienced trader knows that there are specific risks involved in forex trading that come from the fact that trades are made over computer networks instead of physical sites, and those risks can be minimized or eliminated with the help of a professional broker.