Your Online Forex Broker/Dealer
Be aware that IG Review online forex brokers and dealers are not regulated. Thus it is different from stock and futures trading which are controlled and regulated by a central exchange or agency. For better security, it is important that you choose a broker that is registered with a regulating body such as the CFTC (Commodity Futures Trading Commission) and the NFA (National Futures Association) in the US.
Many online trading platforms provide a demo and live accounts that you can open free of charge. The demo account allows you to trade live with “virtual money”. No real money is transacted when using the demo trades.
If you are new to forex, it is advisable to try out the demo account for a few weeks. You will learn the many aspects of trading and how to move easily on the platform interface.
Having gained experience through the demo trading account, you may feel confident enough to carry out your first real trade using the live account.
Many forex brokers and dealers provide several tools and charting facilities to help you execute your trade. Some of these are initially intimidating but can be overcome with experience.
The leverage offered by many online forex brokers is generally 100:1 to 200:1. However some even provide higher leverage. In such a case, be aware that the service provided may not be to the required standard.
Trading is done in lot sizes. One standard lot is 100,000 units of the base currency. Many brokers or dealers allow trading to be carried out in standard lot sizes, mini lot sizes and micro lot sizes. Check this out.
Selection Of Broker Or Dealer
Many traders have bad experiences with fraudulent online forex brokers or dealers. As such it is equally important that you spend some time checking out for a suitable one.
You may check out a couple of brokers’ sites and test the interface program. Check also if they are registered with the appropriate regulatory body.
Are they reachable by phone and do they provide real time consultation? Speaking to others and checking out in forums can reveal some of the performance and activities of these online financial institutions.
Spread, Margin, Fund Transaction, Withdrawal
The difference between the “ask price” and the “bid price” may also vary. Cases of 2 pips spread are common. However be aware that if the spread offered is to low, the support and service provided may not be as good as expected.
Different online forex brokers or dealers require a minimum amount to open a live account. Some accounts can even begin trading with $50.
Check with them about the fund depositing and withdrawal procedures. What is the time period to execute a withdrawal of the fund? Is the process time consuming, complicating or reasonably easy?
Frequent “requotes” and line “breakdowns”.
You may experience frequent frustrating requotes on the bid and ask prices. Unnerving situations over frequent breakdowns especially during volatile periods are common too. If these instances occur far too often, then it is time to look for a new online forex broker or dealer.