Recently, one of the best ways to build a good relationship with your broker is by questioning him. As a forex investor, you are in charge of your money. Which is the more reason why you shouldn’t be scared questioning your broker. It’s your right.
Look, if you are scared to question your broker, do you think you can trust him? This is why you shouldn’t even think of investing on brokers that you don’t flow easily with.
One of the major architects of success in forex trading is your broker; don’t you think you are truncating your chances by choosing a broker you are not free with?
Being a beginner, it’s natural for you to have a lot of questions to ask your broker; whereas the real challenge is this- do you actually know the right questions to ask your broker?
Here are 10 reasonable questions you should ask your broker before signing up with them. (Don’t be scared)
#1 How many years of experience do you have as a forex broker?
Yes, this particular question is very important. Most fx investors are usually scared to ask their broker’s this particular question. And it does have a strong role to play.
Knowing how long your broker has been in this field, will add to the confidence you have about him/her. If you are smart enough, you could easily detect if he his new in this business or an experience forex broker.
#2 Do you partner with reputable banks?
Remember you are about to invest to make money. To be on a saver side, It’s best to be sure that your broker is in a good/flowing relationship with reputable banks.
#3 Can you show me your balance sheet so I can be sure of your financial strength?
The question sound harsh, right? But you mean no harm. You are after being sure that the broking company you’re dealing with wouldn’t go bankrupt overnight.
Brokers with strong financial strength simply mean that a lot of fx investor really trust them on this business and they’re not too close in going bankrupt.
Always bear in mind that you are here to make money. This is why you have to know more about the broker you are dealing with before investing.
#4 May I know who is quoting the rates; is it you (broker) or the bank or multiple banks?
You shouldn’t ignore this question for any reason. You have the right to know how the quoted rate comes about. Is it from the broker or from a bank or rather multiple banks? All this is to prove that the broker is not cooking up his quotes from some illegal source.
#5 Can I possibly lose all the money I invested in my account?
Clearly speaking, you have the right to ask you broker this question. It throws more light in revealing how much you can lose before your account balance restricts you from entering the market. For instance, will I lose all or a certain percentage before losing my trading rights?
#6 Is your spread fixed or non fixed?
It’s very essential that you are aware and well informed of the type of spread your broker operates on. Before investing, you need to know if they offer fixed spread or non fixed spread.
#7 Is your spread too tight or too lose?
#8 Are you also offering fractional-pip pricing?
Formerly, some forex brokers do round up (or down) to their nearest pips. But recently, some of them now offer fractional pip pricing.
Having an in-depth knowledge of how your pip pricing are been rounded up is very important.
#9 Can I hedge on your trading platform?
Hedging in the market is simply a simultaneous process to hold BUY and SELL on the same currency pair. Well, a hedged position tends to work partially on the consolidating market rather than the trending market.
Not all brokers support hedging on their trading platform, especially some brokers from the U.S.
#10 How active and available are your customer services?
Run from brokers with poor customer service. As a newbie it’s natural for you to have some challenging questions to solve. Moreover, you’ve to contact your broker’s customer service about them. But when they neglect you, it’s normal for you to feel bad.
To avoid this from happening, you need to opt for a right broker.
Generally, all this above questions are very essential. Also asking your broker about them is not a crime. Thereafter, note their responds and carefully analyze them. It’ll surely guide you in making your decision of choice.
Forex trading is a very risky business and your success starts by you choosing the right broker.
Always trade responsible.