Due to the ever-expanding interest in trading forex, new brokers are constantly popping up in the trading world. Every day it seems that there is a new and improved version of online broker.
The competition among brokers can lead to a lot of advantages, but it can also be very confusion for both beginners and experienced traders alike.
The broker is the link between you and the market to trade. It is important to understand what a broker does. A broker works for a brokerage company and he is like a salesperson.
The broker’s job is to carry out traders transactions. Brokers are paid by salary, commissions on sales, or a mix of both.
When it comes to choose a broker, customer satisfaction surveys and broker rating guides have their limits. What really matters is whether you’ve found the right brokerage for your needs.
Nowadays, early all brokers offer online trading features. It’s wonderful to be able to access your account information at a moment’s notice, and to place trades 24 hours a day.
Online brokerage accounts are becoming easier to use and providing more and more information.
If you’re comfortable with your computer and you don’t need to hear that voice on the other end of the phone, we recommend that you go with an online broker. If you need to hear a voice to be reassured, choose a broker that offers telephone trading, too.
This is the case of discount brokerages that offer telephone and online service but they do not offer advices or research but simply transact your trades with no frills. Discounters charge considerably lower fees because they manage fewer products than their full-service counterpart.
On the contrary, full-service brokers tend to offer a wider variety of financial products, investment advice, and research than discount brokers. This is the reason why they charge considerably higher fees.
Before deciding which broker to use, it is important some in-depth research.
How much is your investment. The more you have the more options you’ll have.
What is the kind of investments that you want? Every brokerage will give you access to the most commonly traded markets, but you will not have access to every fund on the world. A full-service broker is better if you want to access to more accounts.
The choice will depends also on how often you trade. Many brokers link commissions and account fees to trading frequency.
The most important information, however, is how much help you need. Even discount brokers started to offer some advices these days, but the more help you need, the more you will have to choose a full-service broker.
Start by interviewing multiple brokers at different firms to assess their investment strategies.
Don’t be fooled by an aggressive salesperson. Before making a decision, it is better ask friends who use the same broker or open a discussion about it on a forum. Do not trust the broker’s references only because they might be biased.
Preference can play a huge part in all of this, but by paying attention to the important issues about regulation and capitalization as well, you can find the right broker for you.