There are a lot of traders who feel that the FX converter does not have a place in the forex trading world. While there are a number of other tools that can help you trade better than the FX converter there are some ways that you can use this tool. One of the ways that you can use the converter is to determine which the best forex broker to use is.
Using an FX Converter to Find Brokers
Some traders may be confused about how you can use an FX converter to find the best brokers. When you do this you are going to be using the converter to determine whether or not you are going to be getting good prices with the broker.
Most retail forex brokers are market makers who are able to set the prices that offer you. When the do this they are creating the spreads that they get for letting you trade. However, there are some brokers that try and take advantage of this and set the prices at very different values to the market values. The prices that you get may be a couple of cents off the market price, but a single cent is 100 pip of profit that you could be missing.
What to Look for in the Converter
Before you use the converter to find the best forex brokers you need to know what you should look for in the converter. Not all converters will be ideal for this task and you need to find the ones that are. The converter that you should use needs to offer you the market values of the forex rates. This is something that you can find with a number of real time converters. The problem is that there are other converters that will use historical rates which are not much help to you in this task.
You also have to consider that some converters are linked to financial institutes. This means that the values you are getting with the converter are the ones that you get from the financial institute and not the market value.
Using the Converter
Once you have the converter that you should be using you need to look at what you have to do. Many of the forex brokers on the market will tell you the rates that you can get with them for certain currency pairs. When you find this information you should compare it to the rates that you get for the same currencies on the converter. If the rates are very similar then you are going to be getting good rates with the broker in question. However, if the rates are quite a bit different then you have to consider whether this is a broker you actually want to use.
You should always look at getting the best rates on the forex market. When you get the best rates you are generally going to be getting the best spreads as well. Of course, there are also other factors that you have to look at when you choose the best broker.