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Spreads
The spread, calculated in "pips," is the difference between the price
at which a currency can be purchased and the price at which it can be sold at
any given point in time. Because currencies, unlike futures and stocks, are
not traded through a central exchange, the spread can be different depending
on the broker you use, so it's well worth checking a few out before you open
an account. Lower spreads can help you save money!
Wide Range of Leverage Options
Forex trading
allow you to take positions up to 100 times the value of your account. The
leverage available in Forex is one of the main advantages of this market,
especially for futures and stock traders.
Leverage, expressed as a ratio between total capital available to
actual capital, is the amount of money a broker will lend you for trading. For
example, a ratio of 200:1 means your broker would lend you $200 for every $1
of actual capital. Many brokerages offer a flexible margin policy that allows
you to choose the leverage that's right for you.
Account Types
Many brokers
offer two or more types of accounts.
Mini account is designed for those new to online currency trading and
those with limited investment capital. There is a smaller deposit required to
start trade of just $250 or less.
The Standard
Account is for those investors who are experienced in trading forex. The
standard account lets you trade at a variety of different leverages, but it
requires a minimum initial capital of $2,500. Finally, premium accounts, which
often require significant amounts of capital, let you use different amounts of
leverage and often offer additional tools and services.
Support
Forex is a 24
hour market, so your Forex broker should offer 24 hour support. You
might not be trading at 4am, but that could be what time it is in your
Forex brokers head office on the other side of the planet, so make sure
there will be somebody there to pick up the phone if things go wrong. The best
way to test out the support is to call them up or email them a few times
before you open an account.
Make a nuisance
of yourself - if they don't treat you with the respect and attention you
deserve before you become a customer, it won't bode well for the future.
You'll also want to find out if you can close positions over the phone -
essential in case your PC or internet connection go down at a critical moment.
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