Tips and tricks to getting the best Forex deals
Here are three main aspects you need to consider before you decide which broker you are going to use for your Forex trades: Small spreads, high leverage allowed and small minimum deposit (if you don’t have a lot of money to invest).
Spreads are usually the only fees a broker will charge you. The best Forex brokers offer tiny ranges, especially on the most traded currency pairs.
Use the leverage given to you
Leverage is one of the main reasons why the Forex market is well-known in finance. It means you can keep a minimum margin on your account and take more significant positions than you usually could. This is an effect of borrowing; you don’t own all the money involved, you are just willing to take profits on the changes in prices. A 500:1 leverage, which is very high, would mean your gains and your losses would be multiplied by 500 on your real initial investment.
They will offer you sign up bonuses
Top Forex brokers also know other ways to get people to subscribe. A free starting bonus when you deposit money for the first time in your account is something common, used by brokers such as Plus500 or eToro. However, remember this is just a bribe. While it remains an interesting gift, you should consider spreads and leverage first.
Even some of the best Forex brokers don’t allow you to take small positions. It means you have to buy or sell, let’s say, at least 10 000 units of a specified currency pair to trade. This does limit your trades to a minimum amount, but it is no big deal; keep in mind that if you use a little leverage, you can take large positions anyways.
Remember,leverage is risky
Now, take note that leverage is risky. In fact, the Forex market is risky, as well as pretty much all other markets. While it is true that no one can tell what the interest rate on the 3-months LIBOR is going to be in 3 months, it is also perfectly true that no one really knows at which price the EURUSD (euro versus US dollar) is going to trade in 3 months. Before you start buying the Forex, know your risks and make sure you have a solid trading strategy that involves at least a few indicators and other analysis methods.
Forex practice accounts
An excellent way to practice and elaborate your Forex strategy is to use a free demo account. Don’t worry; top Forex brokers offer this service for free. It allows you to trade fictive money before getting into the market for real. You will also see if the broker suits your needs and if the platform it uses offers an interface that you like.would mean your gains and your losses would be multiplied by 500 on your real initial investment.
Remember that ultimately, there are no best Forex brokers. You can check which ones are the most used and which ones offer the lowest spreads, highest leverage, etc. Some websites offer a rating for each broker. Hot Forex comes first most of the time if you want to be briefly resumed on these rankings. In the end, the choice is yours anyways.