The first thing to know in trying to answer this question is defining what exactly your needs are. It doesn’t take much shrewd detection to guess that if you are reading this article with more than a passing interest in its contents, you are probably a young or youngish man or woman just embarking on a career, full or part time, inForex trading. We guess that you are not very experienced and because you are at the start of a long journey, will not be looking to spend too much of your precious cash.
It goes without saying that there are different kinds of brokers. Regular brokers deal with their clients directly and broker resellers who maintain contact between their clients and larger brokers. The former are generally thought of as more reliable but this isn’t necessarily always true. There is also a difference between what are known as full service brokers and discount brokers. As the name implies, full service is what it says on the tin and they do have far more to offer than discount brokers. The full service includes the provision of one-to-one advice and suggestions tailor made for the needs of each individual. Inevitably you will pay more to a “real” broker than you would for an online trade.
The probable and sensible choice for a younger, less monied, less experienced trader would therefore be a discount broker. They are well accustomed to dealing with this sector of traders, they are popular, and they make available a whole host of tools for investors lacking in experience who are nervous about what to do next. Nonetheless the investor or trader is not being “nursemaided” and nothing beats the necessity of acquiring valuable experience.
Money will play a big part in the decisions you have to make. After all each dollar paid out is a dollar less in your pocket. Let’s examine some of the other financial considerations. Firstly there is the minimum you will have to have as a balance to commence a brokerage account – with an online broker this will range between $500 and $1,000. If and when you are considering opening up a margin account, bear in mind that such accounts require a higher minimum balance than standard brokerage accounts.
Then there are the charges for actually taking out your money. Believe it or not it may be your money but you may have the devil’s own job getting hold of it! You may find that your broker charges you a fee to withdraw any money or refuse to allow you to take money out if that means that your balance falls below the minimum. So when you are lining up a broker, just make sure that you know how easy or difficult it will be to get cash out of him.
Generally it pays to do your homework. Ask other people what their experiences have been and don’t be afraid or ashamed to put your questions and concerns to the brokers you are looking at. After all, it’s your livelihood at stake!