In general, choosing a broker should not be a problem when you’re just a beginner and wanting to invest small amounts. With a simple search you`ll find maybe thousands of brokers worldwide, with various offers.
But what do you do when you want to invest a few thousands or tens of thousands of dollars in the Forex market? There may be problems withdrawing money, or maybe you don`t feel safe with that much money left in the hands of a broker that you can`t bring in court, in less pleasant events.
Given the diversity of brokers operating on the international forex market, it requires some useful recommendations in choosing the right broker, so it certainly inspires confidence and provides the best tools and all his knowledge for successful trading.
It’s good to know that among the various categories of brokers you must avoid the ones in conflict with the interests of the small investor. For example, Market Makers or Dealing Desk, which benefit from the lost transactions of the customer. These brokers usually declines trades proposed by customers or offer a new price, higher than the initial quote.
Another type of Forex broker is NDD (No Dealing Desk) and ECN, which unlike the DD, doesn`t modify the initial quotation.
ECN Accounts:
- ECN brokers display professionalism in dealing with clients,being more operative and providing real updated information about the actual level of liquidity in the market. They also offer optimal trading platforms.
- The spreads (usually variable) they offerare much lower than the ones of the DD and NDD brokers.
- ECN Accounts allow customers to view the total cost of fees (spreads) paid each month through their account statements.
- ECN accounts are transparent and facilitate interaction between participants in foreign exchange transactions that are reading the best selling (ask) and buying prices (bid) on the market.
Thomas Trading Journal 