subject: A Forex Broker Is No Magician [print this page] A typical hunt for a forex broker is likely to demand time and patience. You wouldn't want to rush through the process, since it marks one of the most important and initial steps into a successful foray at foreign currency trading. Read on for a few of the most important pointers to keep in mind while looking out for a good forex broker.
One of the easiest give-aways to a forex broker who's only interested in your account and little else is the claim that there is minimal risk with dabbling in the forex market. An honest forex broker will let you know upfront that there is no investment instrument free of risk. At any rate, the forex market is one fraught with risks. However, the risk-reward ratio is reasonably good for people with a degree of appetite for risk, and any forex broker worth his salt will let you know about this.
Always check up on your forex broker's background, not unlike an employee background check. In case you can't find enough customer feedback or reviews from trustworthy sources like online forums and the like, you'd do well to stay away. It's always a good idea to stick to well-known and established brokers since experimentation with a forex broker is the last thing you want to end up doing.
Keep in mind that your broker needs to be registered as a business either in your country, or in a country with a tight legal system. Do not fall for fancy terms such as 'trading the interbank market', as it is a relatively unregulated market lacking basic checks and balances. A forex broker banking on mumbo-jumbo instead of clear communication is suspect.
There are other ways to spot trouble. A forex broker who paints an entirely rosy picture may not be honest. The foreign exchange market, though a most potent investment channel, poses a high degree of risk as well. There can be no magical software program that delivers profits every time. Software can help in a number of ways, but it is a veritable truth that there is no passport to riches. Both profits and losses are inevitable. When you talk to your forex broker, ensure you choose one that talks sensibly and practically.
