Currency trading requires the trader to have a forex trading broker. There are several factors to consider when choosing a trading broker. These factors are vital when selecting a broker that will make you a winner.
The first factor is your reputation. Most traders tend to overlook this as an obvious quality. To do this, you can start by consulting the forex forums to get an idea of what other forex traders have experienced with any specific online trading broker. This gives you an idea of the type of service a dealer will provide you, in addition to supporting your business. Always choose an agent with an impeccable reputation.
Foundation and legitimacy
The second factor is the foundation and legitimacy of the forex trading broker. Most merchants are associated or part of large financial organizations and commercial banks. Such a base means that the trader has the backing of the institutions and has various sources of income in addition to the foreign exchange business. A legitimate agent must be registered with a specific foreign exchange regulatory institution. Be sure to check your financial situation to ensure your money is well covered and safe.
Margin is the amount of money you need to open and hold any buy and sell position. A margin can be 'used' or 'free'. A margin that is used means the amount that is used to maintain a current open trade position. On the other hand, a "free" margin is the available amount that can be used to open a new position. Therefore, you need to know the margin that a specific dealer requires. Also, find out if the margin changes when considering different currency pairs.
This is the term used to determine the number of lots you can buy with your investment. If your dealer offers 100: 1 leverage, then you can buy 100,000 lots for just $ 1,000. The number of lots you have influenced how much you will generate in trades, so it is important to make sure you are working with a broker who offers the highest possible leverage.