It should be understood that there are many important concepts to grasp before venturing into trading with real money. If you do not do this but go ahead and trade, you will regret that decision. You, therefore, need to look at the main important qualities a forex broker possesses. This is how you select the best forex brokers. This is how you will know how to choose which one to open an account with.
You need to think of things like forex margin, forex leverage, ECN forex and forex spread. You can for instance look at the margin offered by the forex brokers. A margin of 2% means that you can leverage your money by 50 times. It appears to be the current maximum one can access.
Not many of the forex brokers took this news well, and most have decided to go trace in foreign markets, where there is not such limitation. When it comes to this, you need to read some reviews, so as to get a better picture of where to trade. You have to be very careful where the safety of your money is concerned. Ensure there are adequate regulations that safeguard your money in case the brokers go bankrupt.
You have to establish whether the brokers are market makers or use ECN. There is a huge impact from this information. A forex broker who runs a dealing desk can trade against your positions. ECN brokers are attractive when you think of this. But keep in mind that ECN brokers may turn out to be too costly when they charge a commission per each trade. You are now forced to balance your options, between the market makers and ECN.
You need to know more about the forex spread. When you notice A LOW spread, you will be in luck since you will not incur huge commissions. ECN forex brokers usually give very low spreads, because their platforms can tap into a huge pool of liquidity providers. You also have to determine whether the spreads are fixed or variable. Those who have variable spreads normally experience wider fluctuations whenever there are major economic news releases. Spillage can occur, where you order is filled at a price that is not what you were expecting. You need to have an idea of the kind of spillage that might occur.
You need to look at such things when you are selecting a forex broker. They also need to have demo and micro accounts for your practice. Those who are new to forex trading need to use these accounts first. Thereafter, they can access normal accounts.