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Choosing a Forex Broker
In order to trade in the Forex market you will need to find yourself a broker. A broker is someone who executes trades according to your wishes and earns a commission on each trade.
But there are so many brokers out there competing for your business it can be hard to figure out which one is best. This article will give you as idea of what to look for.
Transaction Costs. In the forex market, brokers are paid via the bid/ask spread. There should be no hidden fees or charges to trade. However, there may be additional charges to access certain reports and optional services.
Obviously the smaller the spread the better. Pip spreads vary by broker (and also by currency pairs), so shop around for competitive rates.
Currency Pairs Available. All brokers should at least have the big seven currencies ((AUD, CAD, CHF, EUR, GBP, JPY, and USD). But if you plan on trading New Zealand dollars or Danish krones, you should be sure that the broker is able to do so.
Immediate Execution of Orders. Currency prices are constantly moving up and down and any delay in the execution of your order can cut into your profits or add to your losses. Of course its possible a delay will help you, but it never seems to work out that way does it? Look for a broker that can consistently execute your trade at the price you see on your screen. An occasional delay is understandable, but if it happens frequently find yourself a new broker.
Free Tools. In order to analyze currency prices, spot trends, and plan entry and exit points you need access to charting and technical analysis tools. Most brokers offer basic services free of charge with an expanded array of tools for an added charge.
Minimum Account Balance. As a small investor you will need a broker that does not require a large balance to open an account. Many brokers today will let you open a mini-account with as little as $300.
Margin Requirement. The lower the margin requirement, the more leverage you have. If a broker allows you to use 100:1 leverage, that means you can trade $100,000 in currency for only $1,000. You can use margin to rack up huge profits. But don't margin yourself too much or you will find yourself wiped out fast.
Superior Customer Service. This is something traders often overlook when choosing a broker and later regret it when they need assistance. A quality broker should respond quickly to any question you have. They should have knowledgeable reps available 24 hours a day by phone and email.
A User-friendly Trading Platform. Some brokers require you to download a trading program to your PC in order to make trades. Others let you make trades directly over the web. Pick a few brokers out and sign up for a free demo account. You can trade with play money while you test out their software and see which one works best for you.
Recent Forex News
Technical Analysis
GBPUSD: Bearishness Remains Dominant
Outlook for the pair continues to point to the downside after bear pressure pushed GBP further lower the past week. This is coming on the back of its previous week losses and has now opened up further downside risk towards the 1.5326 level, its Aug 31'10 low. On a turn
EURUSD: Set For More Gains
Having closed strongly higher on the back of previous week strength, further bullish threats are now likely as we enter a new week. This technical development should call for more strength towards its Aug 18'10 high at 1.2921 with a violation there targeting the 1.3332 level. A break will resume
USDCAD: Collapses, Halts Upside Offensive
USDCAD: The pair ended the week lower after an attempt on the upside failed the past week and pushed USDCAD to a low of 1.0384 on Friday. With that said, we think a follow through lower should see the pair weakening further towards the 1.0246 level, its Aug 19’10 low
Weekly Technical Update: Greenback Weakened Post Non-Farm Payroll
The USD was in consolidation/ correction mode this week ahead of the NFP. This is in a sense the market's way of paring some overextended USD gains, but also offers a chance for the market to continue with greenback strength. There was some dollar strength immediately after the release, but
USDJPY: Retains Its Broader Downside Bias
USDJPY: The pair continues to retain its broader downside bias as it looks to recapture its YTD low at 83.58 despite its price hesitation. A breach of there will open the door for more downside towards the 82.00 level, its psycho level with a cut through there aiming at the 81.00 level.
Newsfeed display by CaRP
Fundamental Analysis
Dollar Index Falls to Support on Better Job Data
The dollar, while rising against the yen and Swiss franc, fell versus other key counterparts after better-thanexpected US employment data eased concern of a double-dip recession. For the week, all the major crosses except sterling rose against the greenback. Private-sector payrolls grew more than expected in August and job losses
Weekly Economic and Financial Commentary
For a generation of Americans brought up on action heroes who face impossible challenges and then win the day, the results of fiscal and monetary stimulus are disappointing. Yet, the level of pessimism and talk of a double-dip strike us as too much of a bad thing. This week we
The Weekly Bottom Line
We had some fairly positive data this week, starting with expansions in both personal income and consumption for the month of July. Then the Conference Board's consumer confidence index surprised market expectations on the upside and the ISM manufacturing index also fared better than expected underpinned by a surprisingly strong
Risk Rebounds on Improving Global Data
The past week began with disappointment stemming from Japan's lack of direct currency intervention and risk aversion looked probable to continue into the week. This was not the case as better than expected Australian 2Q GDP started a ripple effect culminating into a global wave of positive data surprises. Upbeat
Is this an Audacious Obama Hope Rally?
The strong rally in risk into today's close in the US today can't be about this week's economic data particularly as the ISM non-manufacturing index for August showed a steep deceleration. So why the rally? The combination of an equity rally and a lousy ISM resulted in the predictable
Newsfeed display by CaRP
Technical Analysis
GBPUSD: Bearishness Remains Dominant
Outlook for the pair continues to point to the downside after bear pressure pushed GBP further lower the past week. This is coming on the back of its previous week losses and has now opened up further downside risk towards the 1.5326 level, its Aug 31'10 low. On a turn
EURUSD: Set For More Gains
Having closed strongly higher on the back of previous week strength, further bullish threats are now likely as we enter a new week. This technical development should call for more strength towards its Aug 18'10 high at 1.2921 with a violation there targeting the 1.3332 level. A break will resume
USDCAD: Collapses, Halts Upside Offensive
USDCAD: The pair ended the week lower after an attempt on the upside failed the past week and pushed USDCAD to a low of 1.0384 on Friday. With that said, we think a follow through lower should see the pair weakening further towards the 1.0246 level, its Aug 19’10 low
Weekly Technical Update: Greenback Weakened Post Non-Farm Payroll
The USD was in consolidation/ correction mode this week ahead of the NFP. This is in a sense the market's way of paring some overextended USD gains, but also offers a chance for the market to continue with greenback strength. There was some dollar strength immediately after the release, but
USDJPY: Retains Its Broader Downside Bias
USDJPY: The pair continues to retain its broader downside bias as it looks to recapture its YTD low at 83.58 despite its price hesitation. A breach of there will open the door for more downside towards the 82.00 level, its psycho level with a cut through there aiming at the 81.00 level.
Newsfeed display by CaRP
Fundamental Analysis
Dollar Index Falls to Support on Better Job Data
The dollar, while rising against the yen and Swiss franc, fell versus other key counterparts after better-thanexpected US employment data eased concern of a double-dip recession. For the week, all the major crosses except sterling rose against the greenback. Private-sector payrolls grew more than expected in August and job losses
Weekly Economic and Financial Commentary
For a generation of Americans brought up on action heroes who face impossible challenges and then win the day, the results of fiscal and monetary stimulus are disappointing. Yet, the level of pessimism and talk of a double-dip strike us as too much of a bad thing. This week we
The Weekly Bottom Line
We had some fairly positive data this week, starting with expansions in both personal income and consumption for the month of July. Then the Conference Board's consumer confidence index surprised market expectations on the upside and the ISM manufacturing index also fared better than expected underpinned by a surprisingly strong
Risk Rebounds on Improving Global Data
The past week began with disappointment stemming from Japan's lack of direct currency intervention and risk aversion looked probable to continue into the week. This was not the case as better than expected Australian 2Q GDP started a ripple effect culminating into a global wave of positive data surprises. Upbeat
Is this an Audacious Obama Hope Rally?
The strong rally in risk into today's close in the US today can't be about this week's economic data particularly as the ISM non-manufacturing index for August showed a steep deceleration. So why the rally? The combination of an equity rally and a lousy ISM resulted in the predictable
Newsfeed display by CaRP