Some people don`t care about the broker they choose. However after seeing what happened with REFCO, it is important to be aware of the broker.
What do you have to analyze while choosing one? There are several things to take into mind:
>Spread: the difference between a buying and a selling price. The most common spread is around 3 pips (0.0003 USD), brokers like this are MARKETIVA (http://www.marketiva.com/?gid=2134), CMS, etc
Some other brokers offer about 1.5 pips of spread. Oanda is one of them www.fxtrade.oanda.com
>Slippage, it is really important to know the slippage of a broker, and it`s impossible to know it, unless you open an account or you do a research. The slippage is a price movement after you close or open a position so the price you wanted isn`t respected. CMS doesn`t have slippage at all. Oanda has a little slippage that it is not important because of its low spread, marketiva has also little slippage. These are the brokers I use.
>Regulations: THIS IS REAL IMPORTANT. REFCO was not properly regulated. You must choose one with strong regulations by the NFA or any other respected one.
“CMS is a registered Futures Commission Merchant (FCM), a member of the National Futures Association (NFA) (Member ID# 0313199) and is regulated by the Commodity Futures Trading Commission (CFTC)”.
“Marketiva Corporation is an international business corporation with registration number IBC CAP. 291 Reg. ? 646819 for dealing in over-the-counter foreign exchange contracts, shares, futures, options, commodities, and securities. Marketiva Corporation is under the jurisdiction of Financial Services Commission (FSC) and conforms with its regulations and internationally accepted supervisory and regulatory standards”
” OANDA is a registered Futures Commission Merchant (FCM) with the Commodity Futures Trading Commission (CFTC) and is a member of the National Futures Association (NFA ID #0325821).”
As you can see, these three are strongly regulated.
>Minimum for opening an account: in some cases this is really iimportant if you want to start with little money. Marketiva and Oanda offer you that option, you can start with as little as one dollar. Whereas, in CMS you need at least 200 U$S.
>Trading platform: eventhough you can get some free trading platforms, it is better if the broker where you are offers a nice trading platform. Personally speaking, I use some complex systems that are not included in some platforms, as ichimoku and fibonacci. The only platform that completely satisfies me is the VTtrader from CMS. Marketiva has serious lack of analysis tools. CMS has everything you may need except of some VERY advanced trading tools that I don`t like. Oanda is really awful, don`t like anything at all this platform. But it`s easy to use. Therefore, if you use other trading platform you can use oanda still, without analyzing in there. You can always open free accounts and try these platforms and see which one best suits you. Metatrader is also a very well-known one, personally I don`t like the visualization.