Trading gold is much more expensive than trading other forex pairs. One of the reasons is that the spread required for gold is higher. There are many different brokers and this is the reason why you need to choose the correct one to be successful in your forex gold trading.
The 5 steps for choosing a broker
Identifying your Broker’s Needs
Determine what level of service you are looking for from your broker. Set your broker standards by asking yourself these questions.
1. What do you plan to trade? Forex, Gold, Silver, Stocks, Commodities.
2. What are your investment goals? The amount you plan to invest will determine a great deal of your decision making process.
3. You can fund your account in several ways. Some brokers allow you to fund your account via bank wire transfer, paypal, credit card and other methods.
They should have guided you to create your own broker standard. Now you can move onto step 2.
Researching Online Brokers
There are many online brokers that offer gold and forex trading. This guide will assist you in sorting and filtering brokers. These are some things you need to consider.
1. License and accreditation. Brokers may be governed by several different types of authorities, depending upon their product and location.
a. For US broker
NFA National Futures Association
ii. CFTC – Commodity Futures Trading Commission
b. United Kingdom based broker
i. FSA – Financial Service Authority
Consider twice before signing with a broker who is not licensed by the authorities.
2. Leverage. In trading, this will make you or break your career. You will benefit if this is the case, however if losing occurs it could be detrimental. The best brokers are those that offer you the option to set your own leverage, based on your personal trading preferences.
3. Spread. It is through the spread that most brokers profit from their trades. Gold is normally very expensive, so you want to look for brokers which offer a competitive Gold spread.
4. Charting Services. Brokers usually offer charting tools that help with trading by using technical analysis. Take into consideration how intuitive their platform is and how well it suits your own trading style.
Deposits
Try out their services with a little money before committing a lot. Choose brokers that will allow you to start with a low amount and provide demo trading. You will then be able to begin trading, with little concern for the amount you are putting at risk.