There are certain aspects that you should look for in Australian forex brokers. However, you may find that there are a number of Australian forex brokers that fit your criteria. To shorten your list of brokers you need to ask them certain questions. These questions can help you determine whether or not the Australian forex brokers right for you or not.
How Long Have they Been in Business?
New forex brokers pop up all the time and you need to find out how long the broker has been working for. The rule of thumb is that brokers who have been in business for a long period of time are more reliable. Of course, you should not base your use of a broker solely on the length of time they have been open.
Do They Adhere to the Australian Forex Brokers Capitalisation Regulations?
The first question you should be asking your broker is how capitalised they are. Certain countries like Australia have regulations about the amount of capital that a broker needs to have. In Australia a broker must hold AUD500,000 in order to trade. Other countries will have different amounts and you need to find out if the broker you are looking at adheres to this. The more capital the broker has the more likely they are to continue working and allow you to withdraw your earnings.
What Spreads Are They Using?
To make money forex brokers charge a spread on every trade that they complete. You need to find out if you are going to be charged a variable or fixed spread. The difference between these two spread types can have a major impact on the profits you make with certain strategies. If you have a fixed spread you are charged a single amount regardless of the market conditions. However, if you are charged a variable spread the price will vary depending on the market conditions.
Which Banks are They Affiliated With?
Retail brokers need to be linked to a bank or financial institute in order to place your trades on the forex market. It is best that you find out which banks and institutes your broker are linked to. This helps you determine the reliability of the broker and how fast your trades are likely to be executed.
What is Their Rollover Policy?
If you are thinking of completing carry trading then you have to find out the rollover policy the broker has. Some brokers do not actually allow carry trades to be completed. There are other brokers that include a spread on any carry trades you may have. You should also find out when the broker classes the end of day so you can either open or close trades before rollover percentages are calculated.
Do They Offer More Than One Order Type?
When you trade you need to know about the different order types and when you should be using them. It is important that your forex broker offers a range of order types so you can incorporate them into your trading system. There are certain strategies that call for the use of different order types when you use them. If you do not have access to the order types then our strategy may not be profitable.
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