Selecting a Futures Broker
There is an inherent risk in forex futures trading, but one of the ways to reduce it is to get a qualified futures broker. While the number of futures brokers and firms offering their services is immense, those who are qualified are only a select few.
One of the first things that you have to realize when looking for a forex broker is that there are several types available, and the one you should select must suit your personal preferences.
If you are looking for the highest quality, the best that money can buy, get a Full Service Broker. As the name suggests, this futures broker will offer you the full range of services. Aside from implementing your trade orders, there will also be trade advice, insights into the economic situations and how it will affect your positions, and various reports.
Full Service Brokers will also provide you with all the necessary tools, charts, technical and economic data pertaining to your futures contracts. All these services come at a price; the fees vary, but the minimum is usually $100 per transaction.
If you have some experience as a forex trader, or would simply like to conduct research on your own, then a Discount Broker may be the one for you. The price charge is usually half those of a Full Service Broker, but in this case all the broker will do is execute your futures trade. If you are confident of your ability to gauge the forex futures market, and see no need to get a broker's advice, then this is the one to se4ect.
One more futures brokerage type is available: those online. If you intend to sign up with an online brokerage firm, get the best that your money can buy.
First and foremost make certain that the software they provide will be Web based. Unlike downloadable software, having one on the Web means instant access, anytime anywhere. Other prerequisites are real time quotes, an efficient trading platform and must be available 24 hours.
There should be easy access to your account setup, able support, broker advice and competitive margin and leverage rates. There is no reason why an online firm should not tender the same services as a Full Service broker does.
That being said, it should also be stressed that futures brokers that charge high fees does not equal quality service, and vice versa. One of the ways to ensure that you obtain a good brokerage firm is to consult with other traders.
The process of selecting a forex Futures Broker is one that should be handled carefully. This will take time, but the would-be forex trader should accept this. The consequences for hastily picking a futures broker can be financially disastrous. The key is patience and research, and by applying these principles, you will not go wrong.
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