So you want to trade forex online? You’ve done your research, studied the market, know the major pairs to trade and have even studied some charts. In other words, you’re ready to go. But forex trading isn’t like walking into a casino where you just pick your game of choice and slap some money down on the table. You can’t approach forex trading like that. Even with gambling, there are certain casinos that are better to gamble at than others. At least in theory. What we’re getting at is that you can’t just pick any old forex broker.
In fact, selecting the right forex broker is one of the most important things a new forex trader has to do. There are hundreds of forex brokers competing for your business and your options really open if you feel comfortable trading with an unregistered or offshore broker. Unfortunately for U.S. traders, new regulations that are being set forth by busy-body overseers of the forex market in the U.S. are making it harder for new brokers to enter the U.S. market and many are even leaving, but that’s a story for another day.
New forex traders should approach finding the right forex broker as they would shopping for a new pair of jeans. You have to find the right fit. Fortunately, the topic of forex broker selection is one of the most talked about forex-related topics out there. There are tons of free resources across the Internet that review every forex broker you’ve heard and probably a bunch you’re not familiar with. Reading some of these reviews will arm you with the information you need to make an informed choice and make you a smart forex broker shopper.
No matter what forex broker you’re evaluating, there are basic factors to consider. Obviously, you want to make sure your forex broker allows you to trade 24-hours a day and has customer service that is available at any time during any forex session. Of course you’ll need to consider how much leverage various forex brokers extend to their customers. Some forex brokers use 50 to 1 leverage. Others use 100 to 1 and some forex brokers will even extend more than that.
Other things you’ll want to research are whether or not your forex broker offers free demo accounts. Even more important than that may be finding a forex broker that offers mini or micro trading accounts so you don’t have to commit a ton of capital just to start trading. You’ll also want to see if your forex offers any bonuses such as free charting package, real-time news
All of that said, far and away the most important thing you need to consider when evaluating forex brokers is the cost of trading. That is, what are the spreads between the bid price and the ask price on major pairs at various forex brokers? All things being equal, if you’ve narrowed your choice down to two brokers and you notice that the EUR/USD pair is trading at 1.4565 by 1.4567 at Broker A and Broker B shows the same pair trading at 1.4566 by 1.4570. That’s a difference of two pips between brokers, or $20 on a standard lot, so your choice is clear.
In fact, selecting the right forex broker is one of the most important things a new forex trader has to do. There are hundreds of forex brokers competing for your business and your options really open if you feel comfortable trading with an unregistered or offshore broker. Unfortunately for U.S. traders, new regulations that are being set forth by busy-body overseers of the forex market in the U.S. are making it harder for new brokers to enter the U.S. market and many are even leaving, but that’s a story for another day.
New forex traders should approach finding the right forex broker as they would shopping for a new pair of jeans. You have to find the right fit. Fortunately, the topic of forex broker selection is one of the most talked about forex-related topics out there. There are tons of free resources across the Internet that review every forex broker you’ve heard and probably a bunch you’re not familiar with. Reading some of these reviews will arm you with the information you need to make an informed choice and make you a smart forex broker shopper.
No matter what forex broker you’re evaluating, there are basic factors to consider. Obviously, you want to make sure your forex broker allows you to trade 24-hours a day and has customer service that is available at any time during any forex session. Of course you’ll need to consider how much leverage various forex brokers extend to their customers. Some forex brokers use 50 to 1 leverage. Others use 100 to 1 and some forex brokers will even extend more than that.
Other things you’ll want to research are whether or not your forex broker offers free demo accounts. Even more important than that may be finding a forex broker that offers mini or micro trading accounts so you don’t have to commit a ton of capital just to start trading. You’ll also want to see if your forex offers any bonuses such as free charting package, real-time news
All of that said, far and away the most important thing you need to consider when evaluating forex brokers is the cost of trading. That is, what are the spreads between the bid price and the ask price on major pairs at various forex brokers? All things being equal, if you’ve narrowed your choice down to two brokers and you notice that the EUR/USD pair is trading at 1.4565 by 1.4567 at Broker A and Broker B shows the same pair trading at 1.4566 by 1.4570. That’s a difference of two pips between brokers, or $20 on a standard lot, so your choice is clear.
Editors’ Picks
EUR/USD: US Dollar to remain pressured until uncertainty fog dissipates
Unimpressive European Central Bank left monetary policy unchanged for the fifth consecutive meeting. The United States first-tier employment and inflation data is scheduled for the second week of February. EUR/USD battles to remain afloat above 1.1800, sellers moving to the sidelines.
GBP/USD reclaims 1.3600 and above
GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.
USD/JPY gathers strength to near 157.50 as Takaichi’s party wins snap elections
The USD/JPY pair attracts some buyers to around 157.45 during the early Asian session on Monday. The Japanese Yen weakens against the US Dollar after Japan’s ruling Liberal Democratic Party won an outright majority in Sunday’s lower house election, opening the door to more fiscal stimulus by Prime Minister Sanae Takaichi.
Editors’ Picks
USD/JPY gathers strength to near 157.50 as Takaichi’s party wins snap elections
The USD/JPY pair attracts some buyers to around 157.45 during the early Asian session on Monday. The Japanese Yen weakens against the US Dollar after Japan’s ruling Liberal Democratic Party won an outright majority in Sunday’s lower house election, opening the door to more fiscal stimulus by Prime Minister Sanae Takaichi.
Gold: Volatility persists in commodity space
After losing more than 8% to end the previous week, Gold remained under heavy selling pressure on Monday and dropped toward $4,400. Although XAU/USD staged a decisive rebound afterward, it failed to stabilize above $5,000. The US economic calendar will feature Nonfarm Payrolls and Consumer Price Index data for January, which could influence the market pricing of the Federal Reserve’s policy outlook and impact Gold’s performance.
AUD/USD eyes 0.7050 hurdle amid supportive fundamental backdrop
AUD/USD builds on Friday's goodish rebound from sub-0.6900 levels and kicks off the new week on a positive note, with bulls awaiting a sustained move and acceptance above mid-0.7000s before placing fresh bets. The widening RBA-Fed divergence, along with the upbeat market mood, acts as a tailwind for the risk-sensitive Aussie amid some follow-through US Dollar selling for the second straight day.
Week ahead: US NFP and CPI data to shake Fed cut bets, Japan election looms
US NFP and CPI data awaited after Warsh’s nomination as Fed chief. Yen traders lock gaze on Sunday’s snap election. UK and Eurozone Q4 GDP data also on the agenda. China CPI and PPI could reveal more weakness in domestic demand.
Three scenarios for Japanese Yen ahead of snap election Premium
The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.
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