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How to select a forex broker

Discussion in 'Forex Basics Boot Camp - Fx Articles by Pharaoh' started by Pharaoh, May 27, 2008.

  1. Svetkata

    Svetkata Recruit

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    How to find broker

    Hi Pharaon,
    I would like to joint to this question. Also can you suggest how to choose the trading platform. What one should be looking for? Do you think some are better in a sense that would give better analytical tools or any other advantages. I also read your article on choosing broker. Well yes choosing a broker is personal thing. However there must be minimum criteria for a broker to meet to be called a good broker. Apart of what you mention initially. Say execution speed re-pricing. I also heard some brokers had a part of their platforms a say program that sees what the trader position is and move the quotes 2-4 pips against him/her. Do you think that is really happening?
    Thank you

     
  2. andy

    andy Recruit

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    Best Broker for Me

    I've tried many brokers before just deciding for one, which I think is the best, i.e., www.interactivebrokers.com

    Pros:
    Honest broker with long history
    Used by large traders also, e.g., investment banks, mutual funds, and hedge funds
    Cheapest commissions
    Trade whatever you want from futures, stocks, options, forex etc in any country.
    Has proprietray trading platform, which is very powerful and may be totally programmed using their Java API
    Holds Billions of dollars in assets
    Geared for professionals

    Cons:
    Bad for newbies trying to learn
    Their platform is confusing at first, has steep learning curve, but great once you get the hang of things
    No MT4 support
    Poor customer hand holding support
    Need about $10K to open an account - not sure on this so you need to check since it changes
     
  3. Tayo Adebayo

    Tayo Adebayo Recruit

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    Broker Frequent Requotes

    Thanks for your article, infact i now realized all the brokers are the same, they all scam in my own opinion. I take this opportunity to copy and paste a paragraph in your article.

    "Does the broker permit your trading style? This is very important if you plan to newstrade or scalp. Some brokers might suspend you. Others will cancel your winning trades (but never your losing trades). Certain extremely unethical brokers will decide that your trading style has caused them "damages" and will confiscate as much of your account as they feel like."

    My broker (Fxpro) has never requote my winning trades, but always gives me a requote whenever i'm loosing. There was a time i made more than $200 in a trade and i want to exit the trade, but i got requotes till i lost all my profits and was making a loss before i was let out of the trade. This again happened to me today where i lost $582. Actually, i closed at this loss, but before it closed, i already have a gain of $54 which i saw before it closed, but never got a requote for that, but if it is further loss, i will get a requote.

    I have made several complaints to them, but no good answer was given, its always internet problem and they are not responsible for internet connection or that the point i want to exit is on queue and probably it timed out, so i got a requote. Their Compliance Dept even supports them in my own view because they will come back and tell me same story.

    I remembered a time i reported them to their regulatory body, the body told me to go back to them so that the broker can carry out an investigation, of course, the broker will always favor themselves, i'm not there in the course of investigation.

    I just wonder what can be done to these brokers in order to bring them to book and give traders good justice. I dont know which broker to turn to now. This is very sad.
     
  4. Pharaoh

    Pharaoh 1st Lieutenant

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    Svetkata,

    What platform you use to trade is more of a personal preference. If it's easy for you to open positions, close positions, and understand what's going on, then the platform is suitable. I know some people who use some platforms that make no sense to me, but as long as they understand it, that's what matters.

    Personal circumstances can also influence it - it you need to check your positions at work or from other places where you can't install software and don't have internet on your mobile phone, you may find that a broker with a web-based trading platform is more suitable than a platform that needs to be downloaded and installed.

    The good news is that the vast majority of brokers provide free demos, so you can try out a few different ones to see what you like.

    Some brokers do have built in cheating software that will slip or requote you a few pips. If it's only 1 pip or so, this can be hard to detect. Naturally, it won't happen very much on demo. This is why you shouldn't place very much money with a broker at first. For any new broker you decide to open a live account with, only put in the absolute minimum amount they'll accept, or just a few percent more (the extra is to test their withdrawal system). If anything doesn't seem right, contact their support. If that doesn't fix it, close your account.

    Andy,

    Good analysis. Please repost it here:

    Are there any brokers anyone likes?

    Tayo,

    Make sure you do have a good connection first. Brokers always use this as an excuse, but sometimes there really is a connection problem from the trader's end.

    If your connection is fast and stable, it's time to close your account. Make sure to leave a review here at the FPA to let people know about the problems.

    The best way to deal with bad brokers is to let everyone know about them. Some of the worst brokers in the world have been forced to close up shop once the word got out and their supply of victims finally dried up. Sometimes it takes time, but here's proof that it can happen:

    Three Scam Brokerages Gone

    This is what the FPA was created for, to save traders from throwing their money away with the worst forex companies. The hard part is that there are so many bad companies out there.
     
  5. melati untuk

    melati untuk Private

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    good information.. thanks pharaoh n all include
     
  6. Svetkata

    Svetkata Recruit

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    Thanks very much
     
  7. cvskumari

    cvskumari Recruit

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    good information

    amazing insights , mostly i feel companies offer bonus they create trouble or which are not regulated else the company should have no reason to not perform well.
     
  8. forextofx

    forextofx Recruit

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    Thanks a lot for this info and your eye opening words!!

    You're right, there are platforms that make no sense but if you know the problem you can handle it.

    I tried the demo of my broker first and still keep using it. Until now it works very fine for me and I get smooth returns at the end of the month.
    Who else uses Buru from IBFX?

    The point about the pips, how can I monitor it, is there a way or signs to respect?

    Good trading days to all!
     
  9. Anita V

    Anita V Private

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    There really is a wealth of information on here. Thank Pharaoh! I will definitely be using your method for selecting a broker if/when I do put some real money into this. So far I've been using MT4 with the default broker(United World Capital I think?) and I haven't been successful getting Oanda's demo to work on MT4. They both seem alright but I obviously can't test them properly until I risk some real money.

    In any case, thank you kindly for the great thread!
     
  10. Jay Lom Koh

    Jay Lom Koh Recruit

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    What forex broker you use?

    Hi Pharaoh...

    I am new here and actually i want to open a live account (very small account, say usd300.00). I have read all the comments here and i was very confuse which broker to use.

    as an experienced trader like you, would you mind to tell us which broker you use currently? i am sure that you are skillful enough to choose a right broker. Most of us here perhaps will follow suit.

    regards,
    Jaylomkoh
     

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