It is expensive to trade gold versus trading any forex currency pair and the primary reason is the spread requirement for gold trading. The Gold pip spread is different from every broker and getting the correct broker is vital in succeeding in trading gold.
5 simple steps in choosing your correct broker
Step 1: Know your requirement
Set your standard on what kind of services you need from a broker. These basic questions can help you set your broker-standard.
1. What will you be trading? There are brokers that offers different products.
2. What is your initial and business capital for trading? Start up and additional funds you will put up.
3. Medium in funding your account. Some broker’s offers bank wire transfer, credit card, paypal and manual checks.
These should have helped you set up your broker standard. You then move to step two.
Process 2: Online Brokers Research
If you will go online you will find a lot of brokers offering forex and gold trading. Use this guidelines to help you sort and filter brokers. Check them using the following factors.
1. License and accreditation. There will be different sets of authorities that governs brokers, depending on their location and products.
a. United State based brokers
i. NFA - National Futures Association
ii. CFTC - Commodity Futures Trading Commission
b. For UK based brokers
i. FSA - Financial Service Authority
If they are not registered with these authorities or any other qualified authorities you should then think twice before signing to this kind of brokers.
2. Leverage. This will make or break you in trading. If you are winning this will work for you but if you are losing it will work against you also. Look for brokers that have flexible leverage that will suite your trading profile.
3. Spread. Some brokers charged you commission on top of the spread, stay away from this brokers unless the commission is worth it. Since Gold spread are normally very high, you should look for brokers that offers very competitive spread in Gold.
4. Trading platform. This is the primary tool you will be using in trading; you should understand how their platform works. You should consider how user friendly their platform and how it suits your trading style.
Step 3: Funding your account
Before sending large amount of money to your broker, start with small amount to test their services. Look for brokers that accept a small amount of money as your initial fund or capital and also offers demo trading. This will enable you to start trading with very minimal consideration as to the amount of money you are risking.
Step 4: Compare brokers that qualified to your requirement
This will be the deciding factor on where you will first open your trading account, whether it’s for Gold trading or forex trading.
In filtering your list of brokers; compare their company profiles, like office location, years in the business & company size.
2. Compare the account options they offer. Check spread, leverage, initial capital requirement, deposit options, withdrawal process and options, rollover interest.
Compare their trading platform as to simplicity and flexibility. It should be accurate and flexible to fit your trading style. MT4 - MT5 are a good gauge of brokers that offers a good trading platform.
Lastly put a high emphasis on their customer services.
Step 5: Open a demo account and start trading.
You will get to have a feel of trading gold or forex without risking real money and at the same time experience what your chosen broker has to offer. Try their services and provide them feedback on how they can better serve you.
Choosing the right broker in very important in your trading business, make sure you learn how to get the right broker for you
Learn what gold trading is all about when you go to how to invest in gold. You may as well want to know much more about merging with the right broker by clicking on how to choose an online broker.