When you start your forex trading business, choosing the right broker has a significant impact on your future success. Some experts even claim that the broker can differentiate between a trader making one thousand dollars per day and a trader making only fifteen dollars per day.
There are four main criteria for choosing a forex broker, all of which are extremely important for your success and for determining the integrity of the broker. You can find more details on forex trading platforms in South Africa through www.globex360.co.za.
Spread is a major factor in choosing a broker. A spread is a difference between the purchase price and the selling price of different currencies at a given point in time. Spreads tend to increase during highly volatile market conditions, but forex brokers should be tested for spreads on calm days.
The spread for a pair of popular currencies, such as the dollar and the euro, should be something like 3 "forex units" called pips. When spreads for major currencies increase by more than 5 pips in calm market conditions, a big "no" should be given to the broker.
Supported currencies are also a good indicator of a good broker. Most brokers will let you trade the "majors" – the currencies with the highest trading volume, such as the US dollar and the euro. However, many forex traders prefer to be more speculative and trade pairs of more exotic currencies, such as the Israeli shekel. Before joining a broker, make sure you can trade all the currency pairs you want.
Beginners and experts, everyone has some technical difficulties when trading the Forex market. To ensure that you will be able to trade whenever you want, see if the broker provides adequate technical support. Without it, you can get stuck in critical moments and lose hundreds of dollars. A good technical support system is usually a sign of a good broker.