What makes a Forex broker ‘the best’ for you? - Part 2
In the previous article we discussed a few factors that could mean ‘the best’ for different traders. In this article we shall continue that notion and discuss other factors that could be considered.
Leverage could also be considered amongst some traders as a barometer of how good Forex brokers are. Leverage offered can be as low as 1:50 to 1:500. The more leverage is offered the more risk the trader can take and therefore make more money. However, high leverage can work against traders in volatile market conditions as the leverage can dig deep into their accounts and liquidate their position resulting in their account being wiped. Saying that, this is not the concern for these traders as they tend to be confident they will always have enough money in their trading account and their trading strategies are successful enough to generate profits.
Another reason why they could be looking for high leverage is because they have multiple trades open at one time. If they have around 10 trades open at once they need quite high leverage for the Forex broker to allow them to open these trades. A small leverage broker will simply not allow this.
Minimum trade size
Some traders prefer Forex brokers that offer a higher minimum trade size. If they are a brand new trader with no experience this could result in a failure as the desire to make more profit blinds their money management strategies. The fact is that good money management and risk analysis do deliver good trading and most traders tend to stick to the 2% rule. This is when we never risk more than 2% of our total investment. Some professionals may look down on this but it this is certainly the right way to start trading. So, try and calculate if minimum order size offered by a potential Forex broker is not too big for your account. If it is then you simply will not be able to make a trade until you upload more funds required for a minimum order.
Trading types offered
The beauty of spread betting is that is a tax-free way of trading. Because of this some traders will not sign-up to a standard Forex broker unless they also provide the opportunity to spread bet. At the same time some traders may also prefer CFD trading along-side their normal currency pair trading. The point here is that there are many types of trading that are available and some traders simply prefer to have a choice at the beginning rather than change Forex brokers every time they want to try a different trading style.
Different market variety
Some Forex brokers may be considered the best only if they provide a range of markets such as gold, stocks, bonds, shares etc. Again, this is where the trader is provided with a huge choice just from picking one Forex broker. Going back to currencies, most traders trade the major currency pairs but there is also money to be made trading exotic currencies. Unless they are provided with the opportunity to do this, they simply won’t sign-up.
As we mentioned in the first article, everybody has different tastes and one is not better than the other. This is why ‘the best’ has a different meaning to variety of traders out there but there is one thing that they all got in common. If a Forex broker comes up with a better offer related to the trader’s ‘best’ criteria they are very likely to swap brokers because we all always hunt for the best.