There are a lot of Forex brokers out there all vying for your trade, but which one should you consider giving your business to?
First think about your requirements: would you prefer to trade online, via telephone or your mobile?.
By using our Forex comparison tables you can quickly compare key features like the different spreads that are offered by brokers and whether they are fixed or variable. A spread is the difference between the ask and bid price. A general rule of thumb is that a smaller spread is better as there is less risk.
Other points to consider when you’re looking for a Forex account are:
- How much is required to open an account? Some brokers only require a minimum deposit of £20 to start trading rather than depositing an initial margin.
- What is the minimum trade? These are usually quoted in lots and can vary from 10,000 right up to 100,000.
- Are they based in the UK? If you are using a UK-based broker then they will be FSA credited. Always check that your broker has full contact details before you open an account or deposit any money with them.
Whether or not you are new to Forex trading it's generally considered to be a good idea to set up limits and stops with each trade that you undertake. This is a way of limiting your risks as you are automatically taken out of a position if the market unexpectedly moves against you.
You can also use stop losses to protect your profit if the market moves in your favour and then suddenly falls. Again, before signing up with a broker it is important to check whether they offer this service and if they charge for it.
You should, of course, pay careful attention to the fees associated with Forex trading.
Forex CFD brokers tend to charge a commission of around 0.25% of the face value of the contract, while you may be subject to financing charges if you hold a position overnight.
While spread betting brokers will usually either charge a commission, broker fee or a monthly subscription.
As with anything, what looks like the cheapest deal may not always be the best so always read the terms & conditions very carefully before entering into any agreement.
