You need to understand many things to do with forex trading before you can start on the actual trading. If you are not ready and go ahead and open a forex account, in a short while you will lose all your money. You have to be conversant with the main critical qualities a forex broker has. This will be the way you select the best forex brokers. That will make it easier for you to choose one of them to open an account with.
You need to think of things like forex margin, forex leverage, ECN forex and forex spread. You should begin with look at the margin offered by the forex broker. A 2% margin affords you a leverage of 50 times on your money. It appears to be the current maximum one can access.
This declared maximum has not gone down well with forex brokers coalitions, with many of them plotting to trade in foreign markets, so a to overcome that limitation. You need to read through the review sites to find more information regarding this matter so as to find the best places to trade. You need also to be especially vigilant when it comes to the safety of your money. There has to be in place enough regulations that ensure you shall not lose your money hen a broker goes bankrupt.
You need to know then if the brokers are market makers or use ECN. There is a huge impact from this information. A forex broker who runs a dealing desk can trade against your positions. ECN brokers are the ones you may have to choose. On the other hand, ECN brokers can turn out to be costly if they charge a commission or each trade. You are now forced to balance your options, between the market makers and ECN.
You need to look at what kind of forex spread there is. Where there is a low spread, it is to your advantage, since you will not be charged huge commissions. ECN forex brokers can afford to give very low spread due to the fact that their platforms can tap into a huge pool of liquidity providers. You will also need to see if the spreads are fixed or variable. The problem with variable spread is that there is always a fluctuations when a major financial news item is broadcast. Spillage is another factor to consider, where your order is filled at a different price than what you were expecting. You need to see what amount of spillage might occur.
You need to look at such things when you are selecting a forex broker. They also need to have demo and micro accounts for your practice. Beginners need to go through this. Thereafter, they can access normal accounts.