Choosing Your Forex Broker
When you start trading the Forex, you need to make sure that you choose a broker or brokerage firm that is registered with the relevant regulatory bodies. (It is no good if you discover that your broker is unregistered, after they have stolen all your money!)
In the U.S. Forex brokers should be registered as Futures Commission Merchants (FCM) with the Commodity Futures Trading Commission (CTFC) and should be a member of the National Futures Association (NFA). You can check out the status of your prospective broker on the NFA’s web site: http://nfa.futures.org/basicnet/.
In the UK, look for Forex brokers who are registered with the Financial Services Authority (FSA). Check out UK based Forex brokers on the FSA’s web site: http://fsa.gov.uk/register/home.do.
You need to check that your broker provides adequate support. At a very minimum, make sure your broker offers 24 hour telephone and email support. It is a good idea, before you choose a particular broker, to contact the help lines of a number of brokerage firms. Ask them a question about their service. You need to discover how quickly they reply, and also if they answer your question to your satisfaction. This will give you a good indication of the quality of their help if you need it later. (Of course the quality of the help before you open the account, does not definitely prove that you will receive the same quality of help afterwards.)
If you intend to trade the Forex using your own computer, then you need to make sure that your broker offers online trading facilities. You also need to be able to view Forex quotes in real time. It is no good if the Forex quote displayed on your brokers site is: GBP/USD = 1.9714/1.9719, but when you open a trade, each GPB costs you $1.9740. If it turns out the displayed quote, was the exchange rate 30 minutes ago, then you need to find yourself another broker.
You also need to be able to view your account, including used and unused margins in real time.
When you place an order to trade, you must be able to buy or sell at the currently quoted price. In other words your broker must use a WYSIWYG display. (WYSIWYG is short for "What You See Is What You Get" and is pronounced wiz-ee-wig).
