1. Qualifications. Most likely the most important thing of all is guarantee the Forex broker you use has the correct qualifications. Therefore, choose a broker registered with the Commodity Futures Trading Commission (CFTC) as a Futures Commission mercantile (FCM). This means that you have legal protection against any rude trading practice and scams that may arise.
2. Is the broker synchronized? This means that when you sign up to use their services you will have protection and insurance against any inner fraud. Also, your funds will remain part from the broker’s operating funds.
3. What business model does the broker use? Some brokers are market makers as others are ECN brokers, providing commerce desks for many traders.
4. Look at the types of spreads they offer. The spread is the difference between the bids and ask prices of the currencies you trade. Brokers do not make a commission on your trade as a substitute they take the spread as recompense. Your broker may also offer fixed or changeable spreads, and they can be different for large accounts and mini accounts.
5. Slippage. Can they provide you with details of just what slippage they would wait for to happen during normal and fast moving markets?
6. Outskirts requirements. What is their margin requirement? That is, what percentage of the investment in your trades do they expect you to pay to open a trade. You also want to recognize about their margin calls, and the time you need to react to such calls.
7. What is their overturn rule? Do they have any minimum margin requirements which they use to earn interest on any overnight positions? Plus, do they have any other requirements or circumstances about you earning interest on any rollovers.
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