Forex Trading: How to Find a Good Forex Broker

To trade forex, you need the services of a broker. Here are some tips to help you find a select a good broker.

1. Ask friends and colleagues for references. You may not have the luxury of having a trusted person to ask their advice on a broker. If you do, take advantage of that resource. A personal recommendation can cut way down on your research time and help you avoid making a bad decision.

If the same broker is recommended more than once, obviously you will want to take that into consideration. You might decide to look no further.

2. Do online research. The internet is an excellent research tool, and you should use it to locate several contenders to serve as your broker. Compile a list of brokers that look promising, and make a comparison chart to easily compare "apples to apples".

3. Using your comparison chart, select the three or four brokers that seem to most closely match your needs.

Some brokers will naturally appeal to the needs of certain traders more than others. One potentially important factor is the number and usefulness of the "helps" that each offers. Does the company maintain a forum, and is it actively used? Does the trading interface seem easy to use? What sort of research tools do they offer, if any?

4. Once you have narrowed down your list, do further investigation on your final contenders. Consider calling them on the phone. Ask yourself if they offer enough services to help you with your forex business. Request a free trial so you can get to know their company; at the very least, ask if they have a demo account for you to try.

If you're not a native English speaker, consider whether or not the broker offers services in your main language. This can become a very important factor in making your decision. As you learn and improve your forex trading skills, you don't want to struggle with a language barrier too.

5. After you have selected your broker, it is not out the question to keep tabs on other brokers. You are not "married" to any given broker that you pick. If you want, you can invest a certain amount of time every couple of months to see if any brokers have expanded their line of services or appeal to your needs better.

After all, you will be spending a considerable of money with the broker, paying for their services through the spread prices, so you will likely want some assurance over time that you are getting the best return on your investment.

Similarly, consider periodically evaluating your experience with your broker. Ask yourself if there any "holes" in the services they have provided to you. Are there any additional services which would help you make better trades? If the answer is yes, that is a clue for specific features you may want to seek out in a different broker at some time in the future.

Selecting a forex broker is one of the most important decisions you make in your forex business, so take the time to do it right.