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2013/02/19

Top Broker


A top broker is sometimes hard to find, though there are many options to choose from. Do not be afraid to look in numerous places to find the right broker for you. Confidence is essential when diving into the foreign exchange (forex) market. You need to have your own set of money management rules as well as a good head on your shoulders when choosing a forex broker. There is a necessity for some extensive research before choosing a forex broker.

A top broker will have good leverage options. Leverage is basically the ratio between how much capital you provide and how much the broker will provide. As an example, the ratio of 200:1 means that for every $1 you provide, your broker will lend you $200. The more leverage you use, the more risk there is to getting a margin call. Also, the more leverage that is used the higher potential for a larger profit and vice versa. A top broker will have a wide range of leverage options available to you, especially if you only have a small amount of capital to invest.

A top broker will have lower spreads. A spread is the way forex brokers generate their profits. The spread is the difference between what you buy a currency at and what you sell it at. Keep an eye on the spread costs of a broker, the lower the spread the more money you will save and the faster you will make a profit in a trade.

A top broker will be available to you 24 hours a day. This is easier for a company than an individual. Also the availability should be in a wide range. A top broker should be available via email or online chat. However, we do not always have access to a computer, so find out if your broker is accessible via phone. Also, the quality of the help the broker can give you in the off hours is essential to their value to you. Find out how fast a broker can respond to your inquiries, if they do not respond fast they may not be the right broker for you.

A top broker should be registered with the proper institutions for brokerage. For the United States, forex brokers should be registered as a Futures Commission Merchant with the Commodity Futures Trading Commission. They should also be a member of the National Futures Association. You can verify their credentials by contacting the CFTCA and the NFA. If the broker is not registered with either commission you may not want to risk your assets with the broker.

It is often a good idea to discuss brokers with other forex traders. To find a top broker you will want to consider the opinions of other traders who have been on the market for a while to find out what their personal forex broker is doing correctly or incorrectly so you will know what to avoid and what to cultivate.

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