Online Forex Companies
If there is one thing you should do before you choose a Forex company, it is research. This industry is growing exponentially every
day, and there are many Forex companies popping up all over the US (and offshore as well). How do you know which companies are right
Are They Regulated and Registered?
The first thing to know is if they are regulated in the country in which they reside. Along with this, they should be registered
with the appropriate governmental agency. Remember - even registration does not guarantee honesty.
Which Currencies Do They Offer?
Some companies start with a minimum of currency pairs. Although this is not a big deal at the start, as you gravitate to currency
pairs that you like, you may find it better to have a wider variety. We are not suggesting the exotics, only that it is more
beneficial if you can trade EUR/JPY without "legging" into it.
There are many, many companies out there who offer a trading platform, basic charts, and prices and ask for your deposit. By law,
they must assist you with complaints, but how friendly are they? Do they really have your best interests in mind? If you don't
understand something, will they take the time to explain it? If you call in to trade, will they help you walk through the trade so
that you understand it and are confident that you have done the trade that you set out to do?
Trading Platform and Charts
Many platforms that are offered are fine for our purposes, but you should ask yourself these questions: Is it user-friendly? Can
you easily understand how it works? Is it stable? Many companies offer a Java-based trading platform. Most of the time, a Java-based
platform is fine, however, there is a problem inherent with some Java systems that may cause problems. That problem is that if the
market becomes active and many customers (just like you) are trying to trade on the platform, it may (and often does) fail. Some
Java-based platforms are definitely not the optimal type to use when trading in busy markets - check with your prospective online
company to see if they carry the latest Java technology.
In other sections, we mention that there are many services available for a price, including charts. Many companies give basic
charts for free - some are good, many are not so good. It sometimes (not always) pays to lease charts that are data-reliable,
user-friendly, stable, and accurate.
How interested is your Forex company in making sure that you have everything at your disposal to help you get a fair chance? It may
surprise you, but most Forex companies today have one thing in mind: to capture your money. You must find a company that wants to win
with you; not against you. A sign of a good company is one that wants to educate you in what you are partaking, so that you will grow
with them. There are millions of customers out there who will sign up with a company without really knowing what they are doing, lose
their highly leveraged deposit, and walk away wounded. Who does that help? It doesn't help the good Forex companies build a retail
market in Forex when two out of every three customers blow up in a month or less. In the long run, smart companies know that customers
will seek out the companies that help them to build their portfolios, not destroy them. Make sure that the company you sign up with
has your interests in mind.
Spreads and Fees
There is a whole array of spreads and fees that Forex firms can charge. You can usually find one that doesn't charge any fees and
whose spreads are not unbearably wide. Some may give you very tight spreads, but charge a fee; others will give you a slightly wider
spread and let you trade for "free." Everyone knows that companies are not in it to break even, so you should be aware that they are
probably dealing for free on a tighter spread than they give to their customers. This is not illegal and is, in fact, pretty logical.
They can get a better price than retail - just like most department stores. What you do have to look for is a company that will treat
you well. That means they don't take extra pips on your stop loss orders, and they give you fair fills on all orders (both take profit
and stop loss orders). Basically, most companies will execute your stop loss before it is traded in order to fill your order at its
price. Other companies will wait until your order rate has dealt, but then fill you at the next best rate (which may be significantly
different than your order rate). Both ways are generally accepted, just be sure you know what your preferences are, and what the
companies have to offer. Take profit orders are usually filled when the price feed has exceeded your order level. For example, if you
leave a bid at 110.50 in USD/JPY, it will only be filled when the market is offered at 110.50. Remember that stop loss orders do not
guarantee a good rate fill.
This content is intended to provide educational information only. This information should not be construed
as individual or customized legal, tax, financial or investment services. As each individual's situation
is unique, a qualified professional should be consulted before making legal, tax, financial and investment
The educational information provided in this article does not comprise any course or a part of any course
that may be used as an educational credit for any certification purpose and will not prepare any User
to be accredited for any licenses in any industry and will not prepare any User to get a job. Past
results are not a guaranty of future performance.