Forex System Reviews
Best Forex Broker
Still deciding on the best forex broker? Here are some things you should look for before making that decision and choose the best forex broker for you. You might also want to review some brokers at our forex broker comparison page.
1. Check Broker Spread
The spread is the hidden cost of trading - the difference between the price you can buy at and the price you can sell at. The spread can really be quite different depending on the broker so obviously it's worth checking a few out before you open an account. Most forex brokers publish live or delayed prices on their websites so you can compare spreads, but check if the spread is fixed or variable. A fixed spread means exactly that - it will always be the same no matter what time of day or night it is. Some brokers use a variable spread, which might appear to be nice and small when the market is quiet, but when things get busy they can widen the spread which means the market must move more in your favour before you start to make a profit.
2. Check Their Execution
Once you're ready to trade, will you be able to do so at the price you can see on the screen? The best forex brokers will show you live prices on their trading platform but will they honour those prices when it comes to pushing the Buy or Sell button? A good way to find this out is to open a demo account and see for youself. This will also give you the opportunity to see what the speed of execution is like - when you want to buy, you want to buy not sit around waiting for ten minutes whilst your order is confirmed! Anything longer than a few seconds is too slow.
Some forex brokers offer guaranteed Stop orders. With these orders, it doesn't matter how quickly the market might move against you, your stop will be honoured at the price you set. Many brokers say they will "try" and guarantee stops, but that's very different to actually doing it. If the broker you are looking at makes any claims like this, check out exactly how strong that guarantee really is.
3. What is Their Trading Platform Like?
All the forex brokers offer their own trading platforms. Some require download of software, others don't and are entirely web-based. Some will look remarkably similar because smaller brokers licence the software from the larger outfits. A good trading platform will show you live prices that you can actually trade at rather than just indicative quotes. It will also offer Limit and Stop orders, and ideally will let you attach these to your entry order. One-Cancels-Other orders are another useful feature - they mean you can set up your trade and then leave the software to get on with it. And the most important feature of all - can you actually understand the platform? Having all the bells and whistles is of no use if you can't use them, so again, get a demo account and give it a go.
Taking things further, if you are interested in linking your platform into other software, such as a more advanced charting package, or even your own software for automating your trading, you will want to have a look at any API capabilities the platform might offer. API stands for "Application Programming Interface", and it's a way of connecting different programs together. Not all brokers open up their platform in this way.
4. What Is Their Support Like?
Forex is a 24 hour market, so your forex broker should offer 24 hour support. You might not be trading at 3am, but that could be what time it is in your forex brokers head office on the other side of the planet, so make sure there will be somebody there to pick up the phone if things go wrong. The best way to test out the support is to call them up or email them a few times before you open an account. Make a nuisance of yourself - if they don't treat you with the respect and attention you deserve before you become a customer, it won't bode well for the future. Another thing worth while finding out in choosing the best forex broker is whether or not you can close positions over the phone - essential in case your internet connection goes down at a critical moment.
The so called "best forex broker" probably doesn't exist. However, it is well worthwhile to ensure that you cover the above points before deciding on the right forex broker for you.