Best indicator for gold trading more than trading other currency pairs. This is primarily due to the high spreads required. As this varies by broker, choosing the right one is essential to success.
Five simple steps to choosing the correct broker
Process #1: Assess your broker requirements
You should decide what you expect from a brokerage. This basic list of questions can be used to help set a standard for your broker.
1. What type of trader are you? Forex, Gold, Silver, Stocks, Commodities.
2. How much do you want to invest? Consider a number of factors when you put up large amounts of money compared to if your investment is just a couple of hundred dollars.
3. The best way to fund your account is by credit card, PayPal or bank wire transfer. Some broker offers credit card, bank wire, Paypal, and manual checks.
The above should have assisted you in establishing your broker standard. Step two is the next step.
Researching Online Brokers – Process 2
When you go online, you will see a number of forex and precious metals brokers. To help sort out and filter brokers, use this guide. Take a look at these points.
1. Licenses and accreditation. Different authorities will govern brokers depending on location and product.
a. For US-based brokers
NFA: National Futures Association
ii. CFTC – Commodity Futures Trading Commission
b. United Kingdom Based Brokers
i. FSA – Financial Service Authority
It is important to check if the broker has been approved by these authorities, or another qualified authority.
2. Leverage. It will determine your success or failure in trading. When you have a winning streak, this can work in your favor. However, if it is not working for you then you will lose. It is important to pick brokers that will let you select the level of leverage best suited for your trading strategy.
3. Spread. The spread is what most brokers charge you. They may offer a fixed or variable spread. Gold’s spread is usually quite high. Look for brokers offering a very competitive Gold spread.
4. Charting Services. Charting services are usually offered by brokers to assist you in trading using technical analysis. The platform should be user-friendly and suitable for your trading style.
This is the third stage of the process.
To test your broker’s service, send them a small sum to begin with. Search for brokers willing to accept a modest amount of cash as an initial deposit or capital. They should also provide demo trading. The amount you’re willing to risk will be minimal.