What To Look For In A Fast, Reliable, Low Cost Forex Broker
One of the first decisions you need to make as a Forex trader is what broker you are going to use. Obviously, if you are to make real money trading Forex, you need to open a live, funded broker account in order to place your transactions. As you are probably well aware, there are a lot of considerations to take into account when choosing a broker.
To keep things short, look for a broker with these characteristics:
- A Broker That Offers The Free Metatrader4 Platform (This is an easy one, since most brokers offer the MT4 platform… since it is the most popular trading platform and most widely used. I personally use the Metatrader4 Platform and recommend it).
- Use a Regulated Broker where your funds are kept in segregated accounts at leading, accredited banks and fast and easy deposit and withdraw options are available. (This means your funds are going to be safe and secure so you can concentrate on your trading and not waste time worrying about your money. It also means you should be able to fund and make withdraws from your account without a hassle).
- Dealing Desk or No Dealing Desk?
- A Dealing Desk broker is also called a Market Maker. Market Makers are counter-party to the trader, meaning the trader does not trade directly with the liquidity providers. The broker is on the other side of your trade, meaning your losses are its profits.
- A No Dealing Desk broker provides direct access to the interbank market. No Dealing Desk brokers can be Straight Through Processing (STP) where transactions are computerized and are immediately processed on the interbank market, or Electronic Communication Network (ECN) where they provide real time order book information offered by banks and the interbank market.
- (Unlike the message of a lot of marketing information out there, you can make money or lose money with either a Dealing Desk Broker or a No Dealing Desk Broker. One type is not necessarily better than the other. The most important thing is to find a reputable broker from a respected country that is regulated).
- The broker should have tight spreads, low slippage and fast trade execution. (You want the best trading environment possible so your trades reflect your trading decisions, and not discrepancies caused by the broker).
- We personally look for brokers where the Daily Candle closes at 5 PM Eastern Time. (Most brokers use this time as the end of day and the start of the next. I like to use this time period, and my trading systems results reflect trading on a broker where the daily candle closes at 5 PM Eastern Time).
There are many other things you are going to want to take into account, such as what country the broker is located in, funding and withdraw methods, etc.
Many people realize their broker choice is important from the viewpoint of keeping their funds secure. But until you’ve been trading on a live account with a broker for a while, it is harder to tell how much your broker selection can effect your profits and trading results. It is surprising to learn just how different your performance can be from one broker to the next when using Intraday or Scalping trading strategies.
Forex Investing Live provides Forex signals based on swing trading. Since we are trading less often, not using extremely tight stop losses and going for higher pip numbers, the impact the broker you use on results is less. Similar results can be obtained regardless of the broker choice.
In conclusion, take the broker decision seriously. But don’t get bogged down and suffer from paralysis by analysis. Do your due diligence, make a decision and open an account.
If you are trading outside the U.S., our favorite broker is IC Markets.