Choosing a Futures Broker

The Full Service vs Discount Futures Broker

The first decision you need to make is whether you will opt for a full service or a discount futures broker. The difference between them is that the former is supposed to provide you with currency trading advice while the latter isn’t. Of course, the fees will be much higher for a full-service broker and so will the minimum deposit.

However, many brokers nowadays provide various types of accounts, mostly based on the minimum deposit you will be making, and each comes with a variety of different perks. These can include full training either via courses or even one-on-one, a personal trading advisor, bonuses, regular market analysis and much more.

What Else to Look for in a Futures Broker

When choosing a futures broker, make sure that you go with a company that offers you access to all the markets, even if at the moment you might only be interested in one. There are plenty of brokers online who will allow you to trade everything from the Forex and stocks to futures and options from the same trading platform and account. This can be an advantage if you catch the trading bug and decide to expand into other markets at a later date.

Likewise, make sure to research every futures broker you are considering. The first thing you should do is make sure they are regulated by some financial body, such as the NFA or the European Union Financial Commission. Also, many brokers offer a variety of extras, as we have already mentioned, so it’s worth looking for the best offer.

The trading platform is another important matter you need to look into when deciding on a futures broker. There are different types of software available, from web based platforms that can be accessed from any computer terminal that has an Internet connection to downloadable versions. Additionally, some are more complicated than others, requiring a steeper learning curve. However, despite the fact that you may be tempted to opt for the simplest platform, make sure that it has the whole range of technical tools as you never know what you may need in the future.

You also want to find a futures broker that offers a practice account, which is preferably not limited in any way. A practice account is practically a live account, except you will be using “play” money rather than making a deposit and risking money. The advantage is twofold. One, you can learn to trade in real market conditions, which is invaluable as you will gain much needed experience. The second is that you can also test the trading software to determine whether or not it is to your liking.

As stated, a good futures broker will also provide educational materials. Some provide more than others, which is why you want to look for a broker that has an extensive library. You should also try and find a broker that offers market analysis and insight, to help you learn more about market analysis.

Another important factor is customer service. A good futures broker will provide 24 hour customer service because you never know what might happen to your Internet connection and if you need to exit a trade quickly, this service will be invaluable. Also, make sure you check any fees that you might incur before you sign up.

There are so many brokers to choose from nowadays that finding a futures broker to suit your needs won’t be difficult at all. Just make sure to test a few different platforms to see which you are most comfortable with before committing to a specific broker.

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5. Choosing The Right Forex Trading System