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Selecting a Broker
There are many choices of
online forex and commodity brokers. Any broker should be evaluated
at with respect to at least the following criteria:
Online software.
If possible, evaluate a demonstration version of the brokers online
software to make sure you are comfortable with its interface and that it
provides necessary functionality.
24 hour dealing.
The better brokerage firms will have a fully staffed dealing desk 24 hours
a day, with telephone trading possible as well as online
trading.
Spreads and
Commissions. These are the two components of the "cost
of trading". In spot forex, the better brokerage firms will
generally not quote wider than 5 or 6 pips in the major currency pairs,
and charge little if any commissions. "Mini" trading
accounts may have slightly higher commissions and spreads. Avoid
brokerage firms that quote spreads of 10 pips or higher or that charge
substantial commissions.
Safety of Funds.
Your funds should be sent to and held at a major, well recognized bank
with a good credit rating. Client deposits will preferably be
maintained in a separate account from the broker's operating capital. Also
desirable is an insurance policy on client funds. Insurance is often more
important than various forms of "regulation", as membership to regulatory
bodies is now often more of a marketing gimmick than something that
provides clients or investors with any real protection (for example,
Enron was an NFA member and CFTC regulated).
Responsiveness of
Service. A good broker will respond to and resolve your inquiries,
whether via e-mail or telephone. Be wary if you experience a sharp
drop off in broker responsiveness once your account is open.
Streamline account
opening and withdrawal procedures. Opening an account should
be fast and relatively painless. Perhaps even more important is that
withdrawal requests are easy to make and processed quickly.
To open an account with
GCI Financial Ltd ("GCI"), click here.
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