Choosing a Forex Broker - 9 Questions to Ask Every Forex Broker

By: Jason Fielder

Looking for a Forex broker can be a difficult search for traders who just don't know where to look. If you are looking for a broker, then there are certain questions you need to be sure to ask prospective brokers to make sure you find the reputable broker you wish to work with.

There are more questions that are good to ask, and each person may have others they want to add to the list, but these are a great base for what you will need to ask to make sure the brokerage firm is one you actually want to consider.

1.How long have you been in business and how many clients do you have? Obviously the longer they have been around, the better the sign. Having a large number of customers for a long time can also help to allay any fears.
2.What regulatory authority is your brokerage firm registered with, and in what country? The NFA (National Futures Association) audits books and is one of the best current regulators. The Forex market is currently far less regulated than stocks, bonds, and commodities - and so this is a very important question.
3.How fast is the order execution? It should be a second or less than a second. With modern technology there's no reason for it to take any longer.
4.Are you attached to any bank or lending institution? Banks are more heavily regulated, which gives extra peace of mind, as well as financial security.
5.What country is your corporation held? The right answer is any country with strict banking laws and oversight. The wrong answer is anywhere else.
6.What type of a broker are you? There are Market Makers (MM) and Electronic Communications Networks, and you'll want to know the difference between the two and which fits your needs best.
7.What is the minimum account trading size? This is important to remember to make sure your position isn't closed out because you're short on funds to cover.
8.What is the margin requirement? 1% is standard, but lower is better. The more control you have, the better.
9.Is my money held by a public or private company? You want it held by a public company, because they are insured. If a company goes bankrupt, you have a better chance of getting your money back.

These are nine questions that are absolutely essential to ask a Forex broker to find out if that brokering service is for you or not.

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