How To Choose The Right Forex Broker
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Full-service vs. discount brokers
The first thing you need to be careful of is the difference between “full-service” and “discount” brokerages. Full-service brokerages have a team of researchers that work to find stocks you may be interested in. While this sounds like a good idea, it comes with a very high price. Most full-service brokerages charge as much as $100 per trade plus a $150-$250 annual fee. Compare this to the sub-$10 per trade range and no annual fee often charged by discount brokerages. For long-term investors, the extra advice they get may be worth the extra money they pay, especially since they tend to have only a few transactions a year. But for a trader, these extra commissions can eat into profits very quickly.Stock trading charts
The second thing to keep in mind is that most brokers offer their own platform for charting and trading stocks. This can be useful, especially if you're a scalper or day-trader, because it prevents you from having to move back-and-forth between charting software and your brokerage website. But it isn't absolutely necessary. If you like a broker but don't particularly like its charting software, you can always use free charting websites to make your charts and just buy or sell from your broker's website.
Minimum deposits
Most discount brokers allow you to get started with very little. Some of them even allow you to start with just enough money to buy one share. But others have minimum balance requirements. Make sure your broker offers to let you begin with an amount of capital you are comfortable with.Product selection
If you're only interested in trading stocks, maybe this isn't a factor. But it can be useful to also have a broker that offers bonds, options, and even forex. You never know when you might want to try trading something new.If you like this strategy, you might also be interested in this The Complete Guide to Penny Stocks Trading
Interest on idle cash
You probably won't be investing every penny that you have. So find out whether your brokerage service offers interest on the cash held in the account. With interest rates so low, it doesn't help much over the short-run. But over the long-run, it adds up.Customer service
Last but not least, make sure your broker offers great customer service. Since most brokers have online platforms, you generally won't need to call them very much. But it's important that they be easy to contact and cooperative during those rare moments when something isn't working correctly. **There are a lot of options when choosing a broker. But pay attention to these factors and you should be able to find one you can get a long with.**
