The process of finding the best broker for your trading can sometimes be daunting. The complexity relies on the number of points to take into account and the fact that requires a certain amount awaraness to chose the adequate company to trade with. As our Content Advisor, Gonçalo Moreira, explains, “it is not possible to speak of a broker who is perfect for all kinds of traders. Instead, you should carefully consider your own expectations from trading, and compare that with what is offered by the broker, and choose the one that is best suited to your needs”. Being aware of this complexity, we’ve prepared a set of posts whose aim are to offer some tips to our audience to be taken into account when choosing a broker.
No matter which Forex broker you are evaluating, there are basic factors to consider:
- Identify your Forex trading priorities.
- Conduct a thorough research of brokers (the most tedious part).
- Select a broker that is strong in the areas that appealed the most to you in step 1.
The most common mistakes that we make when choosing a broker are procrastinating the decision or selecting a broker too quickly. According to Moreira, we typically feel so attracted by the potential returns some people have made trading currencies that we skip the broker selection stage, to get on with real trading. And he warns: “without knowing anything about your trading skills I can almost guarantee that your initial deposit – whether it was $50 or $50,000 – it will be lost in the near future. Not because you skiped the broker selection process itself, but because the selection process requires you to define your trading style and its specific requirements”.
The new trader is probably not ready for trading if he doesn’t know how many pairs he will trade; if his position management may be affected or not by FIFO rules; if because of his trade frequency and style results are sensitive to spreads or not, etc etc.
He recommends you to take it easy and be methodical to do things correctly. The Forex market is not going away tomorrow.
This article is based on the Webinar: The process of chosing a Broker, made by Gonçalo Moreira held on July, 9th.