Optimizing Your Broker Selection

Optimizing Your Broker Selection

Whichever forex broker you choose you need to ensure that they can supply you with the most competitive spreads as possible supported by a world class proprietary price feed.

If a broker is not capable of providing such facilities, then operational problems could develop. For example, poor execution could prevent your trades being activated until sometime after you have initiated your orders and, as a result, you could find yourself in a worse than anticipated position. Ideally, your broker should be able to quickly action all your orders by selecting the best price offered from as many competitive banks as possible. In addition, this task must be performed in such a way as to guarantee that there will be no conflict of interest between you and your broker during the lifetime of your trades.

In order to optimize your selection, you are well advised to investigate all or any reviews about potential brokers especially concerning their ability to provide you with fast execution of all your trading requests. This is very important as fast execution will greatly improve your chances of achieving trading success. For instance, should you trade major news releases, then fix spreads backed by fast execution is essential because of the rapid spike movements that can be produced by these volatile events. Many forex brokers have difficulty providing fast execution during these times because their price feeds are simply not fast or powerful enough to cope with the task at hand.

The reason for this is that the market becomes extremely volatile around major announcements resulting in a huge number of orders being placed in a very short time. Consequently, your own order may be swamped within this deluge and could be overlooked resulting in a possible slippage. Slow execution could also allow the market to trade through a limit without your order being executed until sometime later.

To provide yourself with the best chances of overcoming these types of problems, you must seek confirmation that your broker is fully equipped to deal with all your Forex trading situations. In this case, you are advised to seek brokers who are capable of providing you with a world class proprietary price feed.

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