How to Choose a Good Broker

All traders use a broker to handle their transactions. Trader makes a decision on which transaction to make, then places an order with a broker who then executes the trade order for them & earns money by charging a commission or a fee called 'the spread' for their services.

Brokers are associated with large financial institutions such as banks in order to provide the funds & liquidity necessary for margin trading. The banks are known as liquidity providers. The banks are also the ones that provide the interbank exchange rate to the brokers. XAUUSD trading is traded through a network of banks known as the 'interbank network'. Brokers gain access to this inter-bank network through banks, and then provide this access to retail traders.

A good broker should be registered with a well known regulatory authority like CFTC, NFA, CYSEC, FCA, ASIC and FSP, these regulatory authorities serve as a protection measure against fraud and abusive trade practices.

Before you begin you need to set up an account. You may feel overwhelmed by the number of companies that offer these services online.

Deciding on a good company requires a little bit of research on your part, but the time spent researching will give you insight into the services provided & fees charged.

The best recommendation is word-of-mouth advice, & this is just as valid in xauusd as it's for any other type of business.

You also want to find a broker who executes orders quickly with minimum slippage and should offer automatic/instant execution & have clear policies in regard to slippage.

Next you want to find out the fees involved i.e. Spread. If spread charged is fixed or variable. Are there other charges like commissions per lot traded?

Margin trading is what XAUUSD is about, so be sure you understand the margin trading terms requirements before setting up a account. You need to know the margin requirements and how the margin is calculated.

Does the margin change in accordance to the lot size traded/transacted? Is it the same every day of the week or does it vary? Some brokers might also offer different margin requirements for mini and standard accounts. Some might also change their margin requirements during the weekend. Do not choose those that change their margin requirement during the weekends as this might mean your open trades are likely to be close over the weekend due to the changing trading margin requirement during the weekend. Always select the one which has fixed margin requirement at all times.

The software also is very important to a xauusd trader. You can get a feel of the software options which are available by trying out demos from a few companies online. Above all, you're looking for reliability & the ability to execute transactions on fast-moving markets.

To make sure that you get fast execution from your broker make sure that you trade with the big brokers that have enough liquidity required to execute orders quickly. The big companies have multiple liquidity providers & these multiple liquidity providers ensure that the company that you choose and select can execute as many trades as possible at any given time in a very fast and efficient manner, that way your orders do not get re-quoted.

What to Consider When Comparing

Before comparing brokers we recommend that you do not open a trading account with a America based company, regulation by the CFTC and NFA imposes excessive & over-bearing regulations that have been imposed on US based firms. These include reduced leverage levels, no hedging rule and the FIFO (first-in-first-out) rule that affects the in which way you trade. The FIFO rule states and specifies that the first trade position you open must be the first one you close, and keeping track of your trade orders especially if you open many of them might be difficult for you.

The following are the factors and aspects you should consider:

Regulation

Regulation is an important factor to consider when comparing, regulation is implemented by the financial regulatory authorities like FSA, NFA, CySEC & others. You should always open and select and choose a company that is regulated.

Deposit and Withdrawal

In depositing and withdrawing money from your account, you should consider the following:

What's the minimum deposit required?

How long does it take to withdraw money?

Is there any deposit/withdraw fee?

It is also crucial that you as a trader find out what payment method or money transfer methods are available for use with for example Wire Transfer, Credit Card, Debit Card, Pay Pal & others that are suitable for you.

Minimum Deposit Requirements

How much money do you need to deposit so as to open a account? - The minimum for most is $100 but for some its less. This is important to consider when comparing 2 or more.

Platform Software

The platform provided can be used for comparison & one-can select the best type of software. Most popular software is the MT4.

MT4 is the best platform with powerful technical tools & charts that's why most if not all brokers offer the MT4. If you are a newbie select one that offers you MT4 that way if you decide to move to another one you will still find the MT4 software that way you don't have to re-learn a new trading software every time you decide to try a new broker.

Charting is very important and you need a powerful charting software with good trading charts and indicators so that to make the right decisions. Best choice is a one that offers good quality charting software such as the MT4.

Order Execution

Consider if execution, is instant, is it that of an STP. Best model is STP model, with high liquidity to guarantee order execution.

Gold Leverage & margin

Should give you the option to select leverage 1:50, 1:100 1:200 or 1:500 for the risk takers that have an appetite for risk. However, anything above 1:200 is too high 1:100 ratio is the optimum ideal leverage.

Account Types

Should offer micro, mini and standard accounts for a gold trader to choose the one which they want.

Customer Support

Should provide customer and technical support during the market trading hours, either via E Mail, phone or online chat.

Before selecting a company to open an account with you might want to check the customer support & professionalism & compare and analyze this between different one.

Factors to Consider for Comparison

The fact is that genuine and regulated firms come with a guarantee of at least being genuine.

The company you choose should be suitable for all trader types whether it's scalping, day, swing or position trading. Most will not accept scalping: these aren't recommended even for non-scalpers. Those that do not allow scalping might be because they don't have enough financial liquidity to guarantee trade order execution of your trade orders. This is bad even for others traders because your orders may not be filled at the correct point & you might get re-quotes.

A good broker will be suitable for traders of all areas of expertise. Beginners should find the conditions to be quite flexible & the software easy to use, while professional traders should benefit from high liquidity and instant execution of orders.

The factors and aspects below should be used when comparing, visit their site look at the data provided and then use your judgment decide if they are is best for you.

MetaTrader 4 platform
Up to 1:200 xauusd leverage
Funding through PayPal, Liberty Reserve, Money Bookers, WebMoney, bank wire, debit card, credit card & other payment options
Minimum deposit $100
Bonuses on deposits
In addition to trading, other financial trading instruments such oil, gold trading and silver and indices
Instant execution of orders, no requotes
STP
Professional customer support
Well regulated by a financial regulatory authority

Recommended online broker is one that will ensure you trade better by offering you the best tools and support for analysis.

Xauusd trading means the exchanging of one financial instrument for another in the market. Market is one of the largest market in the world. With main objective to earn substantial profits, new traders are jumping into the market everyday.

Investors, who take time to know the basic knowledge & information, definitely earn high returns on their investment than those who do not.

However there are times, when investors fail to do anything right in the market due to lack of enough information and awareness regarding xauusd. Thus, it's recommended to choose one before investing in the market. A good broker can improve an investors result by providing the best execution of trade transactions, there are many companies out there that one can select from but not all are good. The one thing to look out for is to select one that's regulated.

While choosing, make sure that they are the best for you. It is not a tiresome task to find a company having a long list of customers. But it isn't enough for you. You should look for a one that's regulated. Also look at their terms & conditions this will help you know about their workings.

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