If you want to get into this online business of trading currencies, you might think the easiest way to do this, especially if you have little knowledge of how this works, is to find a broker or any other trading intermediary to do the trading on your behalf.
There are brokers in the forex market, however, who do not give out their brokerage services for free. It would be best for you then to find other brokers you can trust.
One of the ways that you can do this is by looking at the following tips and forex trading tutorial.
1. Find out both the brokers’ track record and their performance in the stock market. Needless to say, if they have a better marketing and brokerage strategy in the forex market, their performance in the stock market should be much better. So ask your broker if they give you an update of their performance records, and if so, how they keep their clients updated.
2. Check on a broker’s margin policy. Some brokers will require a certain percentage of your stocks to be kept as cash or deposited into an account to cover possible losses from future trades. If your broker doesn’t have such a policy, find another one.
3. Find out the brokers’ rollover reserve. This percentage might vary from broker to broker. Most brokers require a minimum hold at the beginning of a month; say about two or three percent. Find out if your broker has this requirement and whether or not he has any rules governing cashing your investment at the end of the month. Find out also what the interest rate is on your deposit, and if there are taxes on it.
4. Ask your broker if he has recommended the main forex platform. There are different platforms for the main currency pairs like the Euro/US Dollar, and the Yen/US Dollar. Your broker should have recommendations based on the forex market movements of the day. By asking this important question, you will know whether or not the broker is certified to provide forex services.
5. Find out whether or not forex trading has a demo account for investors. Their main feature, aside from buying and selling currencies, is a foreign exchange market. Thus, the demo accounts can be made use of at your convenience for practice purposes. The news and information from the internet should be greatly beneficial for this.
6. Check if your broker is trustworthy and has a clean record or history. If there are many complaints from other investors, find out why and make your broker the top choice.
And don’t forget to check my latest post about reasons why Forex traders lose often.