How to Choose a Forex Broker?
When you decide to start trading forex, the very first move you will have to make is to find a broker. In this business, brokers act as intermediaries between traders and the market and represent your financial interests. Because forex market is the largest financial market in the world, the number of possibilities traders have when choosing their broker is exceptionally high. There are some very different offers, so you need to know exactly what you need and how to get it. That’s where we come in – this article will help you understand fundamental differences between various brokers and show you how to pick the right one. If you want to be sure you get this right, keep on reading.
How To Choose A Forex Broker? | Safety
As we have already said, forex market is the largest financial market in the world. Unfortunately, this also means that there are some people who claim to be legitimate brokers, but are in fact scammers who are just looking for unsuspecting victims. In order to avoid any unpleasant surprises, the first thing you have to do is research your broker and see how legitimate they really are. Checking the lists of regulatory institutions such as the FSA in the United Kingdom or the NFA in the United States is always a good idea because these agencies are pretty strict and if your broker checks out there, you can be sure they are a reliable company.
Demo accounts are another good way of checking your broker. First of all, if a broker doesn’t have it available you can’t count on a good customer support at the very least. Demo accounts provide you with an opportunity to see how the broker operates, to test all features available and test your trading skills with virtual money, so if a broker doesn’t have one you are denied some very important information. Good brokers will always want to show you what they have to offer and will try to be as open with you as possible. There is a lot of competition in this line of work, so every single trader matters.
It is also a good idea to check other traders’ comments online for some additional information on the quality of service a certain broker provides. This type of feedback is very common and easy to find, but you have to take it with a grain of salt because success or failure in trading may often influence people’s reviews.
How To Choose A Forex Broker? | Features
Some features of the brokers’ offer such as leverage, minimum deposit, payment methods, education materials etc may differ quite significantly. For example, some brokers demand a minimum deposit of $1000 or more, while others won’t ask you for more than a single dollar. But don’t make your decision based this amount alone because a cheap broker is not necessarily a good one. Sometimes it pays off to invest a bit of extra cash at the start to, for example, learn more from a better education center which will then lead you to some bigger profits later on.
The amount of leverage you get from a broker also varies, so this is also something to consider, and the payment methods are pretty important, as well. This is especially the case if you plan on using credit cards to perform your transactions because the number of credit cards can vary greatly from broker to broker. Education materials offered are also something that may interest you, especially if you’re a new and inexperienced broker. They go hand in hand with a demo account because this kind of account allows you to test your new knowledge or to see how your new trading strategies would fare in the real market.
In the end, everything is up to you, but the most important thing is that you have all the necessary information. This will help a lot in preventing any kind of scams and increase your chances of making a potentially very lucrative choice. The possibilities really are numerous, so you should definitely be able to find something that suits your every need.
How To Choose A Forex Broker? | Example
There are many websites out there dedicated to comparing various brokers and providing many useful information about them, but here’s an example of the choice you have, just to give you the general idea what to expect. Markets.com and FXCM both give you the same leverage, but the former demands a $100 deposit, while the latter only wants $50. However, with markets.com you have the option of getting a $2000 bonus once you meet certain trade volume while FXCM accepts US clients which is not the case with its counterpart. So if you know you’ll be doing this for a longer period of time, you might choose markets.com because of the bonus, whereas if you just want to check things out and see how it goes FXCM might be the better choice because of the lower minimum deposit.
This is just a small fraction of offers available to you on the market, so doing your research really becomes important here. But aside from that, it is also important that you also know what you want so that your search for the right broker can be as efficient as possible.
How To Choose A Forex Broker? | Conclusion
Good preparation is the key to success in any kind of trading business. Finding a good broker may have a huge impact on your trading career which makes the process of collecting information about every single candidate extremely important. Safety of transactions is the most important aspect you should check before opening an account while other features may depend on your ambitions and style of trading. In any case, there are more than enough companies to choose from, so you can be sure you will find the one that can meet all your demands – you just have to look for it. Once you find the right broker, however, trading becomes a great pleasure and a great opportunity for clever investments and if you continue with the same detailed and responsible approach, the profits will come very soon.