The Forex Noob

Navigating the Treacherous Seas of Forex Trading

Searching for a Forex Broker

March 04, 2009 By: The Forex Noob Category: Forex Brokers

So I’m looking for a Forex Broker. I’ve played with a few demos, six, and have found a platform that works with my mind and know that I am interested in not only trading in currencies but also gold.

I’ve found choosing a Forex Broker more challenging than choosing my online broker. There are more variables that can be manipulated and therefore cost you money in Forex. Spreads and how most forex brokers get paid differ between brokers and currencies. Some forex brokers have a trading desk manned with people who actually place your orders. Apparently some are unethical and will hold your order if their position is opposite yours or trade against you costing you money.

Some unethical forex brokers reportedly skew quotes to their favor and manipulate their charts so that your position is negatively effected.

Scary!

There are ECN, Electronic Communication Network, brokers that utilize computers not people to fulfill your orders thereby guaranteeing you a fair trade. But does it?

I understand that an ECN broker is the only way to go but some nonECN brokers are highly rated by satisfied customers (we’ll talk about this in the near future).

Other things to look at in a forex broker are payment/withdrawal methods, Customer Service and accreditation.

One forex broker I was interested in only sends withdrawals via paper checks and will only send four per month. If you want a fifth they’ll charge you for it. Others will transfer money electronically with no limitations.

Some brokers make it easy to make a deposit with bank wire, credit card or Paypal, one I wanted to test uses bank wire but charges $20. Other payment methods are Paypal like services that I am unfamiliar with.

The key to choosing a forex broker, do your research and a lot of it.

I’ll name a few brokers here in the near future and share what I’ve found. I’ve been waiting 3 days for a customer service response from one, not a good sign.

Thanks for your time,

Jeff, the Forex Noob