This article looks at the compatible forex brokers for the different types of traders.
When you look at the forex brokers that you can work with you need to know how to find one that is compatible with the trading you want to do. There are two things that you have to consider when you look for compatible forex brokers. You have to consider the type of trader you are and the type of trading you are going to do. When you look at the type of trader you are you need to consider whether you are an individual trader or a reliant trader. When you look at the trading you are doing you have to consider whether you will be trading in the short or long-term.
Forex Brokers for Individual Traders
Most retail traders will be individual traders. As an individual trader you are going to be completing your own analysis of the market and choosing the currency pairs that you trade yourself. You will not need forex brokers that offer to hold your hand when you trade.
The compatible forex brokers for these traders will be the general retail brokers. These brokers offer you the tools that you need to trade and little else. The integration that you need from the broker will vary depending on your experience and the additional tools that you have.
The Reliant Trader
The reliant trader is a type of retail trader who is looking for a broker that can help them with their trading. These traders generally look for brokers that can offer them analysis of the market, signals and managers. The reliant trader is the one that is most likely to open a managed account.
The most compatible brokers for these traders are the ones that offer the managed account. These brokers will need higher levels of capital to open a trading account because of the amount of assistance they are providing.
The Short-Term Trader
Short-term trading is one of the methods of trading that a lot of traders look at. If you are going to be trading on the short-term then you need specific trading tools and services from your broker. The short-term trader needs a broker that offers tight spreads and fast order execution. The faster the order execution the more these traders are able to make on the market.
The tools that the broker needs to offer will vary depending on the trader. However, all the tools that you get from your broker need to be fast and work on the short-term.
The Long-Term Trader
The long-term trader will actually need a slightly different broker to the short-term trader. There are certain points that the short-term trader looks for that the long-term trader does not. When you trade in the long-term you need to have a currency pair that suits your strategy. The broker that you choose should offer you a number of different currency pairs that are ideal for long-term trading.
The spreads that you get from the broker do not have to be the tightest on the market. Of course, tight spreads would be better than wide spreads. Fast order execution is also needed because this ensures that you are getting the best entry point for your trade.