Unlocking The Forex Broker Selection
It is not your imagination. Selecting a Forex broker is a complex process, and it is important enough that it can either make or break your chances for a successful Forex experience. Our goal is to highlight what makes this decision important and offer some key tips to making a good selection.
estimates that there are approximately 100 medium or large Forex brokers in the world today, each of them with unique features. The rate of new brokers has decreased considerably, though. The retail Forex market is maturing a bit. New regulation and tough broker competition force new brokers to come up with a lot of capital upfront to have a chance to survive the first year of business. Based on our experience, there are four attributes that a reputable Forex broker should possess:
> Trading technology that is attractive and stable
> More capital than the minimum required
> Qualified personnel
> Responsive management
TRADING TECHNOLOGY Trading technology refers to having, first of all, a trading platform that is stable and appeals to traders. There are many examples of trading platforms that have been developed internally by Forex brokers and that fail to meet the standard in the industry. These platforms may lack integrated graphic components, or the ability to customize the different parts, or technical indicators or the ability to accept automated orders. One of the most complete and most popular trading platform today is MetaTrader 4 (MT4), developed by a Russian software company called MetaQuotes and inspired by a Reuters-owned US company called MetaStock. Recognizing the demand for MT4, several major brokers added MT4 to their product lineup in 2008.
But whether MT4 is right for you or not, it is important to understand that a trading platform and its supporting backoffice software may not always dependable. For a 2-year period (2005-2007), MT4 frustrated many traders because it was not stable. Almost daily updates from MetaQuotes to fix problems demonstrated that the product had been launched prematurely. Traders could not assume that the software would work as intended. Many traders suffered losses due to these glitches and brokers using the software were very frustrated.
estimates that there are approximately 100 medium or large Forex brokers in the world today, each of them with unique features. The rate of new brokers has decreased considerably, though. The retail Forex market is maturing a bit. New regulation and tough broker competition force new brokers to come up with a lot of capital upfront to have a chance to survive the first year of business. Based on our experience, there are four attributes that a reputable Forex broker should possess:
> Trading technology that is attractive and stable
> More capital than the minimum required
> Qualified personnel
> Responsive management
TRADING TECHNOLOGY Trading technology refers to having, first of all, a trading platform that is stable and appeals to traders. There are many examples of trading platforms that have been developed internally by Forex brokers and that fail to meet the standard in the industry. These platforms may lack integrated graphic components, or the ability to customize the different parts, or technical indicators or the ability to accept automated orders. One of the most complete and most popular trading platform today is MetaTrader 4 (MT4), developed by a Russian software company called MetaQuotes and inspired by a Reuters-owned US company called MetaStock. Recognizing the demand for MT4, several major brokers added MT4 to their product lineup in 2008.
But whether MT4 is right for you or not, it is important to understand that a trading platform and its supporting backoffice software may not always dependable. For a 2-year period (2005-2007), MT4 frustrated many traders because it was not stable. Almost daily updates from MetaQuotes to fix problems demonstrated that the product had been launched prematurely. Traders could not assume that the software would work as intended. Many traders suffered losses due to these glitches and brokers using the software were very frustrated.
