To participate in online forex trading, one of the first things you have to do is to open an account with an online forex broker. The role of a broker is basically to be the middleman that handles the actual buying and selling of orders on your behalf. Because of the large, sometimes overwhelming number of brokers available on the internet, you'll have to be prepared to spend some time doing on research to find the best forex broker for you.
The best way to find out how great a particular broker is is to talk to someone who is already using their services. Talk to anyone you know that is participating in online forex trading and find out which broker they use. Then ask them what they like about their broker and if they have any problems in working with them.
A good trick to test an online broker is to contact their support desk and observe how quickly they respond to your questions and how helpful the answers are. A helpdesk that is slow to respond to pre-sales type queries is probably not going to improve after you've signed up.
One of the most important factors in deciding which online forex broker to register with is how quickly the broker can execute a trade and what level of slippage you can expect to experience with them. A good online forex broker should be able to describe their slippage policy and provide automatic execution. Documentation on how much slippage you can expect in both normal and fast moving markets should be provided.
When deciding on the best forex broker to sign up with, you will invariably start comparing the cost of each broker, which is mainly decided by the spread. Is this spread fixed or does it vary. If you are looking at signing up for a forex mini account, you need to check if they have the same spread as a standard account or higher. Are there any other fees or hidden costs involved? Just remember that what might seem like the cheapest broker may not necessarily be the best, as the broker that has slightly higher spreads might have extra features or functionalities that more than cover for the additional costs.
To be successful at trading online forex trading, you need to be comfortable with the online forex trading platform. Most brokers will offer free forex demo accounts that work just like a live account and use exactly the same platform. Before trading live, register for a demo account and test the platform thoroughly, paying close attention to the reliability and speed especially during volatile trading periods.
Other things that you might want to look into are the minimum capital required, if it's a swop free account, and the currencies pairs that can be traded.
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