How To Choose A Forex Broker
How To Choose A Forex Broker
What To Look For In A Forex Broker
Read this forex blog from forex friend loan about how to choose a forex broker. The retail forex market is so competitive that just thinking about having to sift through all the available brokers can give you a major headache. The best place to find the top forex brokers is to search the internet. You can find many full-service brokerage firms with forex brokers providing you with reliable trading and advice. Do some research to compare firms and their success rates with other.
The best place to find the top forex brokers is to search the internet. You can find many full-service brokerage firms with forex brokers providing you with reliable trading and advice. Do some research to compare firms and their success rates with other.
Since forex brokers operate differently than other brokers their commissions are paid from the spread the offer you. A spread is measured in pips and is the difference between the values of one bid from another bid. Make sure you understand the terms and conditions around charges and fees you will pay your broker on these trades.
Your broker should give you advice on the best spread for your trade and be readily accessible to you, and have a direct reliable access to the market. They should be accredited so they are familiar with all the terms and rules established by the exchanges you are trading.
When trading forex it is important that your broker is familiar with and offer stop losses. If they do offer this then you need to understand the charges and fees associated with stop losses. Your broker should also provide you information and advice around slippage and how to avoid this in your trading.
If you are experiencing slippage with your trading then you would do well to find a different forex broker. Slippage is the difference in the price you ask for compared to the price you obtain. Your broker should minimize this risk by holding your trading funds in an established credible bank and not in the brokerage holding accounts.
It is best not to use a brokerage firm that holds your funds in their holding account. It is also wise to test your new broker. Start out with small sums of money and determine whether your return is viable before you begin trading larger amounts.
Forex Trader Tips To When Choosing A Forex Broker
Most forex brokers would make use of online tools to facilitate faster transactions among their clients. Top forex brokers are usually formed by a group of individuals who are all in the field of forex brokerage.
Choosing which forex broker to trade with can be a very overwhelming task especially if you don’t know what you should be looking for.
In this section, To help you find the best professionals out there who can help you with the trade, here are some important things you need to consider for when picking a forex broker.
The first and foremost characteristic that a good broker must have is a high level of security. After all, you’re not going to hand over thousands of dollars to a person who simply claims he’s legit, right?
Fortunately, checking the credibility of a forex broker isn’t very hard. There are regulatory agencies all over the world that separate the trustworthy from the fraudulent.
Below is a list of countries with their corresponding regulatory bodies:
United States: National Futures Association (NFA) and Commodity Futures Trading Commission (CFTC)
United Kingdom: Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA)
Australia: Australian Securities and Investment Commission (ASIC)
Switzerland: Swiss Federal Banking Commission (SFBC)
Germany: Bundesanstalt für Finanzdienstleistungsaufsicht (BaFIN)
France: Autorité des Marchés Financiers (AMF)
Canada: Autorité des Marchés Financiers (AMF)
Before even THINKING of putting your money in a broker, make sure that the broker is a member of the regulatory bodies mentioned above.
2. Transaction Costs
No matter what kind of currency trader you are, like it or not, you will always be subject to transaction costs.
Every single time you enter a trade, you will have to pay for either the spread or a commission so it is only natural to look for the most affordable and cheapest rates.
Sometimes you may need to sacrifice low transaction for a more reliable broker.
Make sure you know if you need tight spreads for your type of trading, and then review your available options. It’s all about finding the correct balance between security and low transaction costs.
3. Deposit and Withdrawal
Good FX brokers will allow you to deposit funds and withdraw your earnings hassle-free.
Brokers really have no reason to make it hard for you to withdraw your profits because the only reason they hold your funds is to facilitate trading.
Your broker only holds your money to make trading easier so there is no reason for you to have a hard time getting the profits you have earned. Your broker should make sure that the withdrawal process is speedy and smooth.
4. Trading Platform
In online forex trading, most trading activity happens through the brokers’ trading platform. This means that the trading platform of your broker must be user-friendly and stable.
When looking for a broker, always check what its trading platform has to offer.
Does it offer free news feed? How about easy-to-use technical and charting tools? Does it present you with all the information you will need to trade properly?
It is mandatory that your broker fills you at the best possible price for your orders.
Under normal market conditions (e.g. normal liquidity, no important news releases or surprise events), there really is no reason for your broker to not fill you at, or very close to, the market price you see when you click the “buy” or “sell” button.
For example, assuming you have a stable internet connection, if you click “buy” EUR/USD for 1.3000, you should get filled at that price or within micro-pips of it. The speed at which your orders get filled is very important, especially if you’re a scalper.
A few pips difference in price can make that much harder for you to win that trade.
6. Customer Service
Forex broker customer service isn’t perfect, and therefore you must pick a broker that you could easily contact when problems arise.
The competence of brokers when dealing with an account or technical support issues is just as important as their performance on executing trades.
Brokers may be kind and helpful during the account opening process but have terrible “after sales” support.
7. Consultancy Services Offered
Top forex brokers would actually give you their consultancy services for free. This is like their premium offer if you choose to take hold of their services in the forex market. You should also inquire what specific type of consultancy will be given to you and if there are corresponding information collaterals that will be given in the process. After allFree Reprint Articles, it is also your broker’s responsibility to update you on current forex market trends.
8. Reasonable Leverage
Leverage, in general, is what gives the Forex market a strong appeal to retail traders. However, the risks of trading with high leverage are just as great as the perks. Most serious brokers offer leverage ratios starting at 100:1 and going all the way up to 400:1. The greater the leverage, the greater the risk for the broker. If a broker offers a leverage that seems too high to you, this might be a good indication of the future of that broker or lack thereof.
-Stop Loss Protection: This is a feature that enables you to ensure that your losses do not exceed a certain amount. Most brokers offer this feature, but it is still important to verify with your broker before signing
To summarize, there are many things one must do before becoming a successful Forex trader, but one of the most important of all, if not the number one most crucial task, is finding a trustworthy professional broker. The above steps will assist you in doing just that.