Broker Forex Trading Five General Guidelines When Choosing A Forex Broker

It is truly incredible how times change. Eight years ago finding a good and efficient online broker forex trading was as hard as it gets. Today the forex brokerage industry has evolved to fit the needs of the individual forex trader. An increase in demand for online forex trading has generated an incredible competition between brokers. As a result, the private trader has benefited in terms of service and cost of trading. There are five general guidelines you should to know when choosing your forex broker.


1. Spread This is your cost of trading the forex spot market. It s the difference between the ask price and the bid price. Every currency quote will have these two numbers displayed so trader know at what price they can sell and at what price they can buy. This difference between the bid and the ask price is how forex broker make their money. Forex broker either offer a fixed or a variable spread. Fixed spread is guaranteed to remain the same regardless of market liquidity. Variable spreads change according to market conditions. They are tighter when liquidity is high but become larger when liquidity dries up. It is hard to come up with clear answer of weather to choose a fixed or variable spread broker. But it depends on your style.