Choosing a Forex Broker : 10 Essential Steps


Trading and investing in the financial markets can be intimidating. The Forex market is no exception. With so many brokers and trading platforms out there, it's not always clear which one to choose – and that's before we even start looking at all the different account types they offer!

Forex broker types

It is important to identify what type of forex broker suits your trading style. The three types are ECN, STP, and NDD. ECN brokers have the lowest spreads but are also the most expensive. Forex dealing through an STP broker will offer low commissions but requires more time to be spent on market analysis. NDD brokers usually offer higher commissions than those available with STP brokers but allow for less risk.

Finding the right forex broker

There are many forex brokers to choose from, and it's important to find one that suits your needs. The first step is to research the different types of brokers and compare them side-by-side. They should offer a variety of investment choices, such as stocks, bonds, and other commodities. You'll also want to see how long the broker has been in business and what kind of security they use.


In forex trading, the broker lends you a certain amount of money to use in your trades. This is called "leverage," and it can significantly increase your profit potential. It also increases the chance that you'll lose all of your funds if a trade goes wrong. The leverage offered by a broker typically ranges from 1:1 up to 1:400.

What are the fees?

The broker's fee, or commission, can range from as little as $1 to as much as $30 per trade. The broker's fee also includes the spread and commission costs. A spread is the difference between the bid and ask prices of a currency pair. Commission costs include those charged for withdrawing funds from your account such as wire or bank transfer fees.

Types of orders

There are many types of orders that you can place. If you're a beginner, its best to start with a market order as it is the simplest type of order. The market order will buy or sell at the current price depending on whether you're buying or selling.

Trading hours

International currency markets are made up of banks, commercial companies, central banks, investment management firms, hedge funds, as well as retail forex brokers and investors around the world. Because this market operates in multiple time zones, it can be accessed at any time except for the weekend break.

New York 8AM - 5PM 1PM - 10PM
Tokyo 7PM - 4AM 12AM - 9AM
Sydney 5PM - 2AM 10PM - 7AM
London 3AM - 12PM 8PM - 5AM

Currencies pairs to trade

To trade currencies, there are many official currencies that are used all over the world. However, there are only a handful of currency pairs that are available to trade actively in the Forex market. These currencies must be traded as pairs for valid calculation. There will be about 18 currency pairs based on eight currencies alone, but there are only about 12 currency pairs that you can trade conventionally if you want to trade forex actively.

The Major 18 Currency pairs  are below:


The total amount of currency trading involving these 18 pairs represents the majority of the trading volume in the FX market. 


If you have confidence in your forex broker, you will be able to devote more time and attention to analysis and developing forex strategies. A bit of research before committing to a broker goes a long way, and can increase an investor's odds of success in the competitive forex market.

Top brokers will offer robust resources, low trading costs and access to the worldwide interbank system. They’ll also handle your money with care, even if you open a small account in the hopes of turning it into a small fortune through your trading skills.

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