How to be a Successful Forex Trader?

A simple Google search would yield tons of resources on Forex broker reviews, stockbroker reviews, and binary options reviews among others

Retail brokers and ECNs

Retail brokers need an intermediary to reach the markets; they are usually (but not always) smaller companies and the cost of trading is higher than with ECNs. There are a lot of retail brokers as it is relatively easy to set up one. You can find great retail companies, but some of them are unreliable so before you open an account do a little research.

ECNs have their market centers with direct access provided to costumers. This means quicker, more reliable trading even in complex market situations like in the case of a major economic data release. ECNs are more stable companies in general but opening an account might be a bit difficult, with higher minimum account sizes and more sophisticated trading platforms.

Product range

Even if you only want to trade currencies there might be a huge difference between brokers in choices they provide. Whether or not this is an issue for you will depend on your preferences.

Do you want to trade only significant pairs (EUR/USD, USD/JPY, GPB/USD/, EUR/GBP, EUR/JPY, etc.) or do you prefer to have more exotic currencies as well? Maybe precious metals? Or popular stocks? There are companies that offer all of those products just be sure to check before you decide.

You can opt for a non-specialist broker too. These brokers don’t only concentrate on forex—it is just one part of their product range. That might mean a steeper learning curve concerning their platforms but will provide a lot of options if you ever want to expand your investment scope (bonds, stocks, commodities, options, etc.).

Spreads, Commissions, Margin rates and other fees

The costs of an account may seem minor but in the long run, they add up considerably. Even small differences can mean thousands of dollars after a few years of trading.

If you trade actively, maybe dozens of times a day, the trading costs are the most important for you. Those are the spreads for the different pairs (might be fix or variable) and the trading commissions if there are any.

For a trader who has longer positions, the flat fees for an account and margin rates are the deal-breakers. Margin rates are simply put the costs of holding positions for more than one day.

Be aware—there are huge gaps between brokers in this!

Trading Platform

The interface where you will trade is always a crucial factor. The easiest way to test if you feel comfortable with them or not is to open Demo Accounts by the best brokers you’ve previously selected.

This is also an excellent opportunity to get to know trading and test your first strategies. You can get familiar with chart patterns and trend analysis without risking your capital.

The most common platform is the Meta Trader (MT)—you should probably start with a broker that offers that as a platform. It is easy to use (and there are great guides for helping you learn it), and you will be able to trade with most of the brokers using MT.

Staying ahead of the markets

Now that you know how to choose a broker and start exploring trading strategies on a demo account, there is one more piece of advice to get you going: keep your knowledge up to date by reading dedicated news sites, following economic releases, and educating yourself about different strategies.

It’s a fascinating world with many opportunities and challenges. As you learn more about the market your results will get better and more consistent—you should never stop evolving as a trader!