Top Three Broker Services Offered
As the number of people trading Forex has risen, countless numbers of new brokers have also flooded the Forex marketplace. This has created stiff competition among brokers. The resulting competition has forced brokers to take extra measures to attract and retain clients. More services, higher levels of personal attention, and additional trading resources are now offered to Forex clients. When looking for a broker, most traders are happy with the new services they find. Let’s consider these supplementary services offered by various Forex brokers and consider their usefulness in trading Forex.
1. Online Trading Platform
This tool is essential for allowing people to trade via the Internet. This allows the trader to avoid calling a broker, which would increase fees and limit trading opportunities. If the trader is familiar with basic trading terms like pip, profit, and stop loss order, the trading platform is the best method for trading Forex.
a. Different Types of Platforms
However, all trading platforms are not alike. Some trading platforms contain only the basic entry and exit orders. Others are more sophisticated in that they allow the trader to place stop loss orders, limit orders, and trailing stop orders as well as show account balances, available margin, and profits or losses on each trade. Another consideration is the appearance and layout of the trading platform. This is strictly an individual decision so the trader must personally determine its ease-of-use and accessibility. Always ask a potential broker to see the trading platform and, if possible, place an order using that platform.
2. Charting Packages
A charting service is a collection of charts that traders use for technical analysis. The charts range from the most basic charts that simply track the price of a currency pair to very sophisticated charts offering a wide range of technical indicators and simultaneous chart views. Three to five separate charting services are usually offered by a broker.
a. Charting Costs
A basic chart is usually offered free or for a very low cost. A charting service that includes technical indicators, time frames, real-time data, and simultaneous, multi-chart views will cost a monthly fee. This fee could be quite substantial, often starting at $40 per month, which increases with each additional services provided.
b. Example of Charting Services
Charting services can be found at Trade Station, Esignal, and FXCM. Always ask any broker about the charting services provided. Of course, many more are available, but these websites offer an excellent range of charts.
3. Paper Trading
After extensively studying and researching Forex, many people are still hesitant to begin trading currencies. Why? They are afraid to lose money. For this reason, many brokers offer paper trading so people can actually trade Forex using real-time quotes, but not real money. This allows people to learn Forex trading in a real trading environment without the threat of major losses.
a. Perfect for Beginners
Beginning traders consider paper trading an excellent service that allows them to “practice” trading Forex until they are ready to trade using real money. Most traders consider it an important way to learn the mechanics of placing currency trades as well as a good test of their trading knowledge and ability. One downside to paper trading is that beginning traders can get “stuck” in trading without the threat of losses. Be sure to ask whether new clients can paper trade with the broker and how long this service is available to their clients. (Some brokers limit paper trading to 30 days.) A period of 60 to 90 days is usually sufficient to obtain the most benefits from paper trading.
Other Services Offered
Brokers will offer a wide array of other services to their clients. Chat rooms, news services, and live online assistance are standard services offered by brokers. Automated trading has become popular and gives traders with limited time or skill the opportunity to avoid the extra work that manual trading requires. Smaller accounts (starting at $300) are usually offered to beginning traders. Inspect the full range of services offered by the broker, but focus on these top three services as the most useful to Forex traders. (And, please, read the caveat below.)
Caveats
Brokers will offer a lot of services to potential clients, but the trader must inspect these services before opening an account. Are these services readily available? Are there any hidden costs or fees from using these services? Will these services still be offered in six months? Always ask before transferring your money to a new broker. And, remember, if a broker’s promises seem too good to be true, they probably are. See Forex Fraud .
