BEFORE TRADING FOREX YOU NEED TO CHOOSING A FOREX BROKER

Before trading Forex you need to set up an account with a Forex broker. So what exactly is

a broker? In simplest terms, a broker is an individual or a company that buys and sells

orders according to the trader's decisions. Brokers earn money by charging a commission

or a fee for their services.

You may feel overwhelmed by the number of brokers who offer their services online.

Deciding on a broker requires a little bit of research on your part, but the time spent will

give you insight into the services that are available and fees charged by various brokers.

 IS THE FOREX BROKER REGULATED?

When selecting a prospective Forex broker, find out with which regulatory agencies it is

registered with. The Forex market is labelled as an “unregulated” market, and it basically

is. Regulation is typically reactive, meaning only after you’ve been bamboozled out of your

entire savings will something be done.

In the United States a broker should be registered as a Futures Commission Merchant

(FCM) with the Commodity Futures Trading Commission (CFTC) and a NFA member. The

CFTC and NFA were made to protect the public against fraud, manipulation, and abusive

trade practices.

You can verify Commodity Futures Trading Commission (CFTC) registration and NFA

membership status of a particular broker and check their disciplinary history by phoning

NFA at (800) 621‐3570 or by checking the broker/firm information section (BASIC) of NFA's

Among the registered firms, look for those with clean regulatory records and solid

financials. Stay away from non‐regulated firms!

The NFA is stepping up their efforts in educating investors about retail Forex trading.

They’ve created a brochure fit for a Pulitzer Prize called, "Trading in the Retail Off-

Exchange Foreign Currency Market”. The NFA recommends you read it before taking the

Forex plunge.

They’ve also developed a Forex Online Learning Program, an interactive self‐directed

program explaining how retail Forex contracts are traded, the risks inherent in Forex

trading and steps individuals should take before opening a Forex account. Both the

brochure and the online learning program are available at no charge to the public.

CUSTOMER SERVICE

Forex is a 24‐hour market, so 24‐hour support is a must! Can you contact the firm by phone,

email, chat, etc.? Do the reps seem knowledgeable? The quality of support can vary

drastically from broker to broker, so be sure to check them out before opening an account.

Here’s a good tip: choose several online brokers and contact their help desks. Seeing how

quickly they respond to your questions can be key in gauging how they will respond to your

needs. If you don't get a speedy reply and a satisfactory answer to your question, you

certainly wouldn't want to trust them with your business. Just be aware that as in other

types of businesses, pre‐sales service might be better than post‐sales service.