Few years ago, forex trading was a game for only big investors. Nowadays, its open to every one and thanks to Internet! Below are some of the online forex brokers which allow you to open account on their website and trade forex with just few clicks.
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|Product Name||eToro||Forex.com||AvaFX||AnyOption||Markets.com||Plus500||UFX Markets||xForex||Easy Forex||You Trade FX|
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|Headquarters||Cyprus||USA (NJ)||Tortola, BVI||Cyprus||Cyprus||London||Cyprus||Cyprus||Cyprus||London|
When looking for a good forex trading company or brokerage firm to use, there are quite a few considerations to run through before signing up with one and going through the ID checking process.
Some brokers offer a broader remit beyond currency pairs trading by including CFDs, providing access to trade commodities, stocks and other securities in a highly leveraged manner.
In this piece, we hope to guide you through the forex broker selection process and give a helping hand along the way.
Does location really matter with an online brokerage firm?
At times this is a personal question. While some forex brokers are based in London, UK or the USA, many brokers that open to new customers outside of the States are actually based in Cyprus.
Cyprus has it's own regulatory body, but this may, for instance, provide less reassurance for British people who are used to financial companies being regulated by the FSA back on their own shores. Increasingly, European trading firms are being licensed and regulated by MiFID, which has a European coverage, whilst also being regulated by individual jurisdictions too on a per country basis.
The majority of European-based forex brokers are unable to accept American clients due to regulations. However, a growing trend is for the more successful European forex brokers to establish a US-based forex company to compliment their European operations, offering an outlet for Americans to enjoy their services too.
Often depending on the size of the operation at the forex broker, the list of available currency pairs to be traded could be as large of fifty currency permutations or as low as just a handful. For the brokers with a more restrictive list of currency pairs to be traded, often their focus is wider and they will also offer option trades into commodities, interest rates, stocks and more. These are all on a highly leveraged basis.
Brokers typically do not charge commissions for trades, unlike with a conventional securities-based trader. Instead, they make their money from the spread. This is the difference between the bid and the ask price. Just like with currencies that you can buy or sell at your local currency exchange kiosk, their profit is made from the difference in the two prices when they are bought or sold.
The spread, known as pips, quite often varies between different types of trades depending on their level of popularity and liquidity. Some brokers offer a fixed spread, whereas with other brokers the spread is variable. It is obviously a good idea to consider the spread from one broker to another to compare costs, especially if you plan to make one particular transaction often and this can be compared broker versus broker to find the most economic trade.
Desktop software is made available in various forms. Sometimes a broker will provide their own software platform, which may or may not be web-based, whereas quite often a broker may compliment that with the popular Windows-based software, MetaTrader 4. The latter has the advantage of being quite familiar to many active traders who have come across it before.
MetaTrader 4 has it's own mobile apps for use with the iPhone / iPad, Android and Windows Phone mobile devices, which is a helpful addition for brokers that offer the MetaTrader software.
Beyond that, some of the larger brokers all have had their own apps developed for the iPhone or Android mobile devices, which can provide up to the minute news, research facilities, and enable continued trading while on the move.
It is important to consider how mobile your trading needs might be now or might become later. For instance, if you travel on business a lot or might wish to keep abreast of forex market developments throughout the day, then choosing a forex broker with mobile access will be vital.
A number of forex companies do an admirable job in providing digital educational content that can be used to further explain the complex concepts behind forex trading. At least one forex broker provides a beginner's e-book, and several others offer video training, online tutorials, seminars and other learning tools. Just about all of the forex brokers have a demo trading account to use their online interface, try some trades with no real money on the line, and see how things work before signing up.