Opening a new forex Account, just like opening a savings or current account in a commercial bank in your area, is definitely not rocket science. However, because most of your Forex transactions and dealings will be conducted online, care must be taken not to make wrong brokerage decisions that might end up jeopardizing your efforts especially when one is just starting out and has quite a whole lot to learn.
You could go online to any of the search engines and type ‘Forex broker account’, then see the huge amount of result that display in front of your screen. The simple fact that there are so many Forex brokers looking for new customers is enough reason to believe you will need guidance so as to avoid making mistakes. At this juncture I must tell you that choosing the right Forex broker is about the most important decision you’ll be making when starting out as a newbie Forex trader.
Explained below are three of the foremost major factors to consider before deciding whether or not to open a Forex Broker account with any brokerage firm of your choice.
1. The Leverage on Accounts
Leverage determines the number of lots you can procure using your investment. A simple definition of Leverage would be the ratio that is risked in relationship to cash held. Lots of Forex brokers will offer leverages ranging from 100:1 right through to 400:1. What this means for example, is that you can risk $4000 for every $10 in a 400:1 account. The number of lots you have significantly affects the amount that you will make in live trades, although care must be taken here so that this does not work against you because the same way this feature boost profit is the same way it heightens loss should your trade calculations go wrong. It is however imperative to ensure that you are operating with a broker offering the maximum leverage feasible.
2. The size of spread
The higher your spread, the more it robs off in profits. This term is commonly used to determine the difference of buy and sell rates of each of the currencies. Do you want to have the maximum return on investment? Then choose a Forex broker that offers the highest spreads possible. This will enable you to buy currencies at lower prices and sell for higher returns.
3. The quality of customer support
You do not want to experience anything similar to frustration when a pertinent issue relating to your account is unattended to by a customer focused and oriented support help desk. The Forex market operates 24hours everyday nonstop excluding weekends. Before signing up with any broker, you will want to consider the presence of live streaming help online, ready to attend to all your account and finance issues. Also make sure that you have several means of making contact with them such as email addresses, phone numbers and fax as well. The help desk is often made up of professionals who are readily available to assist you with issues concerning your trading account. On no account should you choose a Forex broker lacking this service.