You are here because you are a new trader and interested in finding a good Forex trading company, right. You are on the lucky side. The Forex trading company is the backbone of successful Forex trading, and when you make the wrong choice you will live regretting why you got into Forex trading in the first place. For you to make the right choice you need to ask yourself these 5 questions:
Is The Company Registered With A Regulatory
Risk Management Solutions?
While the Forex market is unregulated, Forex companies are regulated by bodies that oversee their working. In the US, the company that you want to work with should be registered as a Futures Commission Merchant (FCM). Here it should be registered with the Commodity Futures Trading Commission (CTFC) and National Futures Association (NFA).
If you are looking for a UK based company, you should ensure that the company is registered with the Financial Service Authority (FSA).
As rule of thumb you should steer clear of a company that isn't registered with the necessary body.
Does The Company Allow Dealing Or A Non-Dealing Execution?
There are benefits in each service offered by a trading company. For example, a no dealing company ensures that there is no conflict of interest between the broker and trader. It also means that there are no restrictions on entry orders, limits, and stops. When you are operating on a no dealing desk execution the banks don't see your limits, entry orders, and stops.
What Is The Degree Of Leverage Offered By The Company?
The leverage offered determines the amount of money that you will make. There are some companies that offer conservative amounts such as 2:1 and 10:1 while others are more aggressive and will give leverages of up to 400:1.
You should do your research and settle on the company offering a leverage that you are comfortable with. Although, a large leverage allows you to make more money, it also puts you at great risk especially when the market goes against you. As a newbie, you should start with a small leverage.