Choosing the Best Forex Broker

How do you go about finding the best forex broker for your needs with all the retail forex brokers you have to choose from? The best way I've found is to take your time, do your research, and keep it simple.

You'll definitely want to trade with a broker who is registered with either the NFA or the CFTC, so limit your choices to only those brokerage firms that meet this initial criteria.

You'll also want to know how they offer spreads (fixed or non-fixed). Wide spreads can eat into your profits, but you can't avoid spreads all together. Be careful here, because some brokers will offer fixed spreads but will also charge a commission on top of the spread. This makes the deal look better than it is until you place a trade.

Another important factor is what leverage choices they offer. A mistake that is made by newer traders is to think that more leverage is better. But leverage is a double-edged sword and can drain your account quickly if you trade carelessly or if you're trading in a highly leveraged live account while you're learning. Start with a broker who offers low leverage (no more than 50:1). Then you can bump it up when you get more confident and have a proven winning track record.

Finally, make sure the broker you choose offers "micro" lots if you're planning to start trading with a small amount of money. You most likely won't be trading full contracts for some time after getting started. Also, know the minimum deposit required to trade with that broker. If you can't fund the account with the minimum requirement, you can't trade live.

I found a great article on how to choose the best forex broker on Babypips.com. It would be a good idea to read this article and follow the steps they recommend to find your broker. You can access this article by clicking the link below:

How to Choose the Best Forex Broker