FOREX BROKERS POLICIES

• Available Currency Pairs – You should confirm that the prospective broker offers the minimum of seven major currencies, that is, (AUD,CAD, CHF,EUR, GBP,JPY and USD).

• Transaction Costs – Transaction costs are calculated in pips. The lower the number of pips required per trade by the broker, the greater the profit that the trader makes.

• Margin – The lower the margin requirement (meaning the higher the leverage), the greater the potential for higher profits and losses. Margin percentages vary from .25 and up. Low margin requirements are greater when your trades are good, but not so great when you are wrong. Be realistic about margins and remember that they swing both ways.

• Minimum Trading Size Requirement – The size of one lot differ from broker to broker, spanning 1,000, 10,000, and 100,000 units. These brokers usually offer a mini-lot, which is one-tenth of a lot. Some broker even offer fractional unit sizes which allows you create your own unit size.

• Rollover Charges – Rollover charges are determined by the difference between the U.S interest rates and the interest rates of the other country. The greater the interest rate differential between the two currencies in the currency pair, the greater the rollover charge will be.

• Margin Account Interest rate – Most brokers pay interest on a trader’s margin account. The interest rates normally fluctuate with the prevailing national rates. If you decide to take an extended break from trading, the money in your margin account will be accruing interest.

• Trading Hours – Nearly all brokers align their hours of operation to coincide with the hours of operation of the global Forex market: 5:00pm EST Sunday through 4:00pm EST Friday.

HOW TO CHOOSE AN ONLINE FOREX TRADER

Before trading Forex you need to set up an account with a Forex broker. What exactly is a broker? In simplest terms, a broker is an individual or a company that buys and sells orders according to the trader’s decisions. Brokers earn money by charging a commission or a fee for their services. Deciding on a broker requires a little bit of research on your part, but the time spent will give you an insight into the services that are available and fees charged by various brokers.

When selecting a prospective Forex broker, find out with which regulatory agencies each dealer is registered. The Forex market is label as “unregulated” market, and it basically is.

In the United states a broker should be registered as a futures commission Merchant (FCM) with the Commodity Futures Trading Commission (CFTC) and a NFA member. The CFTC and NFA is here to protect the public against fraud, manipulation, and abusive trade practices