Authored by Christopher Reed in Forex Trading
Published on 11-27-2008
A successful forex trading career requires certain prerequisites. This includes choosing the right broker for the job. With a definite plan and an effective strategy, you are sure to take home the prize of forex trading – a stream of income!
The foreign exchange market is considered to be the largest financial market known today with a whooping 2 trillion dollars being traded daily. The forex market, unlike other financial markets, is regarded as a perfectly competitive market. Being considered as such, the forex market is not regulated or manipulated by any corporation and body which include the central bank.
Trading of currency occurs between market participants that include large banks, governments, market spectators etc. In contrast to stock exchange where traders themselves participate in the market, a private forex trader requires a broker which serves as a mediator between him and the buyer or seller of the currency. The broker functions as a link between the two trading parties. Because of the vast number of brokers to choose from online, it is important to select the best not only to get the most out of forex trading but also to avoid being scammed.
Forex brokers allow you to access the market but only to a limited extend. If you have been in this business for quite a time, you would know that brokers offer their own price. Picture this as a new trader who decided to open two accounts at two different brokers. He may get a different price from the two brokers for the same buy and sell.
Given that this business is a system of trading and pricing, there is a big chance of being scammed. Some forex brokers do not play fairly and may even trade against their clients. That is why it is very crucial for you to be cautious when choosing your broker. In fact, you have to consider everything when doing this. Even the smallest details like where the money will be contained should never be neglected. Note also if the broker is offering any kind of guarantee or security. Credibility in this business is important so check for the broker’s history, profile and references.
Good communication is also crucial, so verify the accuracy of their address and phone numbers. If you have the time to test these out, then do so. Evaluate how well they accommodate their clients through their customer service helpdesk. Note the broker’s license, if they are trusted and regulated by any third party company.
In spite of all the risks of being scammed in this business, there are still forex brokers who offer great plans with excellent support and trading platforms. So you really have to research and select the best among the list of forex brokers.