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Opening a forex account? Seven things you need to think about

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There seems to be less to differentiate between competing forex trading offerings today, making it hard for new traders to the FX game to decide which broker to open an account with. Should you opt for one of the bigger firms, which spend thousands of pounds every week on advertising, or seek a niche specialist, which offers a particular currency pair? Here are some considerations when researching the market for forex brokers:

#1. Is your broker regulated?

Make sure that the broker you choose is properly regulated. If you are using a broker in another country from your country of residence, be particularly careful, as some jurisdictions exercise limited oversight of trading enterprises, and you may not have recourse to an compensation schemes if that broker should fail.

#2. Minimum account size

What is the minimum required to open an account? This can be a consideration if you intend opening accounts with more than one broker. Once you are trading, what terms will apply to the cash you keep on deposit with that broker?

#3. Demo accounts

Does the broker allow you to paper trade? This can be a useful way to experience the forex broker’s service levels and the speed at which trades are executed. It also allows you to get a better feel for any proprietary trading platform they offer, or iron out any technical problems that might crop up with integrating your desk top trading software.

#4. Mobile trading

Forex markets are global, 24 hour markets, and you may want to keep tabs on trades while away from your computer. What sort of support does your forex broker offer for mobile devices?

#5. Education

If you are new to trading forex, what levels of support does your broker offer new traders? Here the larger brokerages can have the edge, as they have the resource to organise seminars and webinars for their clients. Even if you are a highly experienced traders, there may still be one-to-one coaching and training on offer.

#6. Trading platforms

Will you be forced to use a firm’s own trading platform, or can you make us of MT4 or other third party technology to execute FX trades? How easy would it be to achieve this? What sort of additional costs would you face?

#7. Expert advisers

Does your broker allow the use of expert advisors and other algorithmic trading applications? And even if they do, how easy would it be to implement them in practice?

Opening a Forex account

The above are some of the questions you should be addressing before opening a forex account with a broker. Time spent in early research can save money and many hours of heartache later. Speak to other traders, including on social media, to find out what they think of your chosen broker. An independent viewpoint is always valuable.

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This article does not constitute investment advice. Make sure you do your own research or consult a professional advisor.

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