How to examine a broker?

[oleg2009]

Successful use of scalping is directly depending on your broker. Experienced traders choose brokers very carefully with consideration of many factors.

The first factor, is the spread on the traded currency pair . Most of the brokers give the information about spreads on traded currencies on their websites, but I would recommend to check the spread before you start the trade. I would check the spread on a real account ( you have to open real account, but you can quickly close it and therefore check how quickly you can withdraw money).

Also, if your broker is ECN, check all the commissions in order to make sure that a broker won’t “eat” all your profit.

Than I recommend to check the execution speed. In order to do this you have to place your advisor to trade with minimum lot and estimate the time interval between the starting time of sending order and it’s ending time. Go to the folder of log files C:\Program Files \metaTrader\logs\ and look on the log file.

Example :
00:56:26 '1003718': order sell market 0.20 USDJPY sl: 0.000 tp: 0.000
00:56:27 '1003718': request was accepted by server
00:56:27 '1003718': request in process
00:56:27 '1003718': order was opened : #1635944 sell 0.20 USDJPY at 91.180 sl: 0.000 tp: 0.000

We can see that advisor made it’s request for opening 00:56:26 and order was opened at 00:56:27 – good work.


You have to also analyze all the tweaks around a particular order. It will help you to discover manual intervention. Broker can “throw” quotation in the stream of quotations in order to beat your “stoploss” or to give you maximum worst price. That’s why exploring of teaks will make everything clear. Analyze 10-20 orders.

In the future, when you will pick a broker and start the state, I would recommend you to analyze every order.

So analyzing of spreads ,speed and teaks around a order, will give you the full understanding of your broker. I recommend www.MT4.ca – this is Canadian partner FXOPEN picked by me for the scalping. The only disadvantage of it is that the broker is not registered in NFA, even though most of USA brokers transfer their clients to other jurisdictions to escape NFA regulation

[wakacyjna]

Thanks. That is very helpful.

[tomo1]

scalping is possible with ECN brokers

[tomo1]

hey guies try FXopen nice broker, ECN & metatrader-I closed some nice transactions . Short USD!

[maxcuneo]

A smart broker can really give you that extra edge you need in order to be successful in the Forex market. Many forex traders increase their potential for profit by engaging in leverage. This is where they borrow from their forex broker to increase the amount they’re trading. This method of trading also exposes a trader to a higher potential loss.
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Forex Trading Platform

[Camilla]

Also always take a closer look on the way customer service works. Call them, ask them questions, and make conclusions. Most relaible brokers have 24 hours phone support.

[jason]

You can choose a Forex Broker while keeping the following things in mind:
Initial Deposit : You should look for a forex broker that has a low initial deposit.

Regulation : The forex market is an unregulated market meaning there is no central exchange. However, forex brokers themselves are regulated. In the US they should be registered as a Futures Commission Merchant (FCM) with the Commodity Futures Trading Commission(CTFC) and a member of the National Futures Association(NFA). You can verify a broker’s status with the NFA on the NFA web site. If you do not find the broker you are interested in listed with the NFA, look for another broker that is listed and has a clean record.

Customer Service: It is important to find a broker with 24 hour customer service. The forex markets can be wild at times. If you had a question about order execution or a closed order, you should be able to get your question answered no matter what time it is.

Currency Pairs: Find a broker that offers the currency pairs that you are most interested in trading, or at least a good variety to choose from.

Reputation: Always check the reputation of a forex broker. One way is to do a google search with the name of the broker plus the word “complaints”.

[buster]

Choosing a broker is a tough job and need to research its legitimacy here, and in doing so one must get educated to understand Forex more and its complexities. There are lots of good resources out there to help. One of the best I have come across is makemoneycurrencytrading dot co dot uk as they run free webinars and training. And they run live portfolio so you can actually see if their strategies are making profit live. They also send out a daily report each day with the trades.

[robsam]

Originally Posted by buster

Choosing a broker is a tough job and need to research its legitimacy here

I agree with you. Choosing broker is really a tough job but once you get a good broker it may take you to the top. They can give you good ideas and strategies for proper investment and good returns. Having knowledge about market is also must. Take an example of forex trading. It can give you returns only when you have done proper market research and you have some knowledge of currency correlation.

[jason]

When checking out a forex broker, look for these details:

1. Margin provided (usually 1-4%)
2. Their spreads for the currencies you’ll be trading (the EURUSD will usually be 3-4 pips)
3. Amount of funds required to start an account
4. Any fees for small trade sizes (many don’t charge fees for smaller trade sizes, but some do)
5. Any other fees (there will be rollover fees for positions held overnight with any provider, which are usually small, though the details of this fee can vary)
6. Whether the broker automatically closes your position if the position goes against you by the entire value of your account not used as margin for that trade
7. What their charting package and forex trading platform is like
8. Whether the trading platform provide a demo account for you to practice on