A Guide to Selecting an Online Brokerage Firm
The Internet has dramatically revolutionized the forex market. Before, it was limited to only certain individuals, but through online technology, everyone now has access to forex brokerage firms that can help them get into the currencies market.
The sheer number of online brokerage firms competing for your services can prove daunting. If you do not have any experience in forex trading, selecting the correct forex brokerage firm is an absolute necessity, as this can make or break your career.
There is no standardized rule for selecting the right forex brokerage firm, and the question of which is the best depends entirely on your needs. However, the following can be used as a rough guideline.
The account that you will open depends a great deal on the amount you will deposit. If you simply want to test the waters, choose a Mini account. Most online forex brokerage firms will allow you to deposit as little as $100. They also offer high leverage. Standard forex accounts ($1,000 minimum) offer extra leverage options, online tutorials and other features.
If money is no problem, get yourself a premium account ($100,000 minimum deposit). This will entitle you to your own fund consultant and the highest possible leverage, among other services.
A majority of online brokers will offer new traders demo software, which will allow him/her to trade with "play money", so as to get a feel for the market. Others do not offer demo accounts but will allow you to trade real money, albeit in small amounts. The thinking behind this is that an individual will not "learn" how to really trade if he/she is using play money.
Even online brokers that offer a demo account does not mean you have to use it. In the end, the choice is up to you.
Another important aspect in selecting an online brokerage firm is the software they use. It is imperative that they meet the following requirements: you must have access 24 hours a day; a wide variety of technical indicators must be available for your use; relevant economic data should be presented to you as soon as they are available.
In addition, these reports should be accompanied by commentaries by the firm's analysts. It is also wise to keep these reports; through time you will know if their analysis is correct.
A good online brokerage firm should have flexible payout options, such as credit, wire transfer etc; if a problem occurs, an online broker should provide you with able support.
The choice of a forex brokerage firm is extremely vital. You cannot be too careful, so be sure to keep these guidelines in mind. Also, by keeping yourself up to date with the latest news in the forex market and industry, you will never be caught unaware.