Over the last few years there have been hundreds of new brokers showing up for you to choose from. The problem is, how do you know which ones are out there just to take your money?
The first thing that gives it away is their spreads. If you are having to pay more than 2 pips on the EURUSD, then the broker is most likely marking up the cost for you to trade. However, this is not the only sign.
Another thing that brokers like to do is show that they offer tight spreads, however, as soon as you place a trade, you will get a re-quote or slippage which in effect is the same as having a higher spread!
The major broker nightmare is if they are bucketing your trades (trading against you). What this means is that when you buy, they sell. This puts them in the position where they want you to lose on your trade, and they will do anything they can to cause you to lose. Case in point, Goldman Sachs! (This is the most recent example).
Out of all these brokers, I have only found one that I trust. They have over $20 million in capital, they offer leverage of 500:1, and are very easy to open an account with. In fact, I had my first account set-up and ready to trade in less than 5 minutes.
http://www.universal-blog.com/fxopen
If you have any questions about another broker, please leave your comments below. I will check them out for you and let you know what I think.
