It’s a fact of life that you cannot start currency trading until you have opened an account with a reputable Forex broker who will help you decide which currency pairs to buy or sell and execute the transactions you request. Brokers earn their money by charging a commission for their services and most of the trading is done online. There are still some currency brokers who will execute trades in person and over the phone, but the majority of transactions today are carried out online through a broker’s trading platform. Online trading offers benefits a brick-and-mortar brokerage just cannot match, like around the clock availability, real time price quotes and the instant execution of all currency trades.
It can be a bit overwhelming to choose a broker at first because there are so many available online to select from. Most brokers will allow you to open a demo account so that you can get used to their services and the system in general before you sign up for an active account and start executing real trades. However, the trading software platform offered by a broker is one of the most important factors in choosing which broker to use.
The trading software platform should offer software that is intuitive and easy to use, and deliver real-time quotes and instant execution of requested trades. A good trading software platform should display your balance, available margin, and any gains or losses in real time to enable you to manage and track your trades efficiently. Most online currency trading brokers will also provide their clients with the software tools necessary for charting and analyzing trades. The most important things to look for are the availability of currency pairs, the commission rates, typical bid spreads, the interest rates, and the broker’s trading hours. You want to pick a broker that offers at least the major currency pairs and is available during the hours you normally will be online trading.
The currency trading market is considered an unregulated market because there is no central governing body that oversees the trading in the United States, however there are other nations that have formed agencies to regulate currency trading activities of those brokers within their jurisdiction. In the United States, the Commodity Futures Trading Commission (CFTC) was been formed to help protect currency trading investors and any broker you choose should be registered with that agency as a certified Futures Commission Merchant (FCM). Beginning currency traders can also check out potential brokers through the National Futures Association’s (NFA) Background Affiliation Status Information Center (BASIC) in order to evaluate their record of services before signing any trading contract agreements. After you have chosen a currency trading broker and familiarized yourself with their operation, you can open an active trading account and begin trading currencies in earnest.
