In this day and age, Forex brokers have come a really long way and there is now a lot of competition.
Forex brokers know that if they don’t offer you a good product someone else quickly will! That means YOU can get a really good broker and try them on their demo for free before depositing real money.
Gone are the days where traders cannot afford to trade the cross Forex pairs such as the GBPAUD or EURNZD just because the spreads are too large.
Even though some brokers are still ripping traders off on these pairs, the competition is now such that these traders can turn around and within a few minutes have another live account up and funded with another broker and far superior trading conditions.
What Should You Look For With Your Forex Broker? (MUST HAVE’s)
There are a few really important non-negotiable points that you should be looking for with your broker. Some factors when trading are super important and when it comes to placing a trade the security of funds is a huge issue.
With this in mind it is very important that whatever broker you are looking to trade with that they are regulated and that they segregate client funds.
It is important that brokers are regulated by a financial watchdog such as ASIC in Australia or the FCA in the UK because the broker has someone policing them then and they are not a law unto themselves. This also gives you a financial institution to go to if something happens that you don’t agree with.
A lot of Forex brokers are not regulated and if they do something you are not happy with and they are no regulated, you have no one to make a complaint to or get something done about it.
The biggest outgoing expense that a trader has to run their trading business is their broking costs i,e, their spreads and commissions and for this reason it is super important that the broker chosen has tight spreads & commissions.
The other reason this is important is because with many brokers traders are getting ripped off on the cross and more exotic pairs with the higher spreads making these pairs not worth trading.
This can then make these traders miss high quality price action setups simply because they were with a broker that was charging too high spreads.
Whilst the above points are the really non-negotiable must have points, there are other points that are also really important for traders to take into account when looking for their ideal broker as well.
These are all things like making sure the broker has the correct New York close 5 day MT4 charts and that the broker carries more than just the basic 20 or so Forex pairs to trade.
A lot of traders when first starting only have small amounts of money to start with and will only be able to fund a small account so it is important to know if the broker of your choice allows small live accounts to be opened and traded with. It would be a waste of time opening a live account with a new broker that did not allow anything under a standard lot to be traded.
Using the Correct New York Close 5 Day MT4 / MT5 Charts
As pointed out above; it is important the charts that the broker uses are the correct New York Close 5 day MT4 or MT5 charts. Why is this so important? Quite often the MT4’s charts will come as a six-day chart.
This sixth day candle is not a full day and is normally a 4hr candle that throws out the rest of the price action chart. Because the sixth candle is only made up of 4 hours and the other five candles are made up of 24 hours, this sixth candle throws out the price action and does not give a true or accurate reflection. Instead of getting five accurate candles, the chart has a whole heap of smaller candles all over it that should not be there.
The other important reason why traders should be using New York close charts for their daily charts is because of how the timings of the candles are set up. The candles are formed in-line with how the market forms, giving a more accurate reflection for price action traders.
The daily candle opens at the start of the week when the Forex market first opens in the Asian session and it trades right through to close at the end of the week when the US market closes. This is the same for the daily close during the week. The daily candle starts/opens with the Asian session and trades right through to close when the US market closes.
Do not confuse the MT4 time on the platform with the candle closing time. Whilst traders can go in and change the platform time to anything they like, trades cannot change the time that the candles close and open.
This is configured by the broker only. In other words; the broker is either a New York close charting broker or they are not. It cannot be changed.
Recommended Broker For Traders
Outside the US
SPECIAL NOTE: If you sign up to this broker below through Forex School Online you will NOT have to pay any deposit or withdrawal fees with credit-card or any method!
Recommended Broker For Traders
In the US / New Zealand & Canada
The traders relationship with their broker plays a really important role. It is crucial that you have a solid broker that you can rely on to be able to make your trades when you need to and at the best prices.
Too many traders take the attitude of “it’s only a few pips extra”, but this attitude cannot be accepted with any part of trading. Broking is the traders biggest financial outlay and as the trades become bigger and bigger those “few pips” over time begin to really add up and at the end of the year, every pip that is paid to a broker is profit that is not made for the trading business.
If you have any questions about anything discussed in this article or need any help with anything at all, then you can just let us know in the comments below.