How to choose Forex broker
Thinking to start trading Forex? The foreign exchange market (known as Forex) is the most popular and accessible financial market and the Forex beginners guide will help You get through it. Forex is a global marketplace for exchanging national currencies against one another. Modern brokers’ trading accounts give access not only to currency exchange but a wide range of other various trading assets including gold, silver, crude oil, and other commodities. To open a trading account and choose the right broker, some forex brokers require a minimum initial deposit of only $50/£50 to open an account!
How to choose the best Forex broker
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. How to choose a good broker guide to determine the most important features and how to choose the best forex broker to join:
How to choose a good broker that suits your needs
SECURITY/REGULATIONS
The most important characteristic that a good broker must have is a high level of security. To avoid any risk make sure and check the credibility of a forex broker. There are regulatory agencies all over the world to monitor and regulate trading markets in each country. Below is a list of some 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: Investment Information Regulatory Organization of Canada (IIROC)
TRANSACTION COSTS
Every trade will always be subject to transaction costs. Costs to pay will be either the spread or a commission so it is natural to look for the cheapest and most affordable rates. Do not be tempted by low costs by non-secure/regulated brokers. Always choose security over costs.
AVAILABLE ASSETS
Trading brokers provide access to currency and cryptocurrency markets but also a wide range of other various trading assets such as precious metals, including gold, silver, and platinum, energy carriers, such as crude oil, and other commodities, such as agricultural products and their derivatives and futures.
TRADING PLATFORM
When it comes to trading Forex online, most brokers will supply you with various trading platforms, yet MetaTrader platforms are the most common. This software was developed and released in 2005. There are two primary choices of the trading platform currently offered by MetaQuotes Corp – MetaTrader 4 and MetaTrader 5. MT4 was specifically built for forex traders, whereas MT5 was designed to provide traders with access to CFDs, stocks, and futures. If you’re new to trading or are simply interested in trading forex, choosing a forex broker with MT4 is an obvious choice.
WITHDRAWAL/DEPOSIT AMOUNT AND METHODS
A deposit method is simply a means which is used to deposit money into your forex trading account. A withdrawal method is the means used to withdraw money from your forex account. Most forex brokers provide a list of deposit and withdrawal methods they accept on their banking pages and view transfer times and fees. Brokers accept many different deposit methods for forex trading accounts like credit or debit cards, bank transfers, E-wallets (i.e. PayPal, Skrill, etc.), prepaid cards (i.e. Paysafecard), and checks or money orders, and also Bitcoin or other cryptocurrencies.
LEVERAGE
Forex Leverage allows traders to trade bigger volumes than they would, using only their own small amount of trading capital. Leverage mostly depends on the trading strategy traders use. Traders looking for quick trades, like scalpers, try to use high leverage. The most popular Forex leverage is 1:100
EXECUTION
Order execution speed is basically the time between sending your orders to your broker and receiving the answer from it by filling your orders or in other words, opening your positions or placing your pending orders. Choosing a forex broker with fast execution is important. All the processes in normal situations take milliseconds, but there are some occasions it takes more than a few seconds and sometimes tens of seconds for your orders to be filled. It happens on two occasions. Either the market is too volatile or the market doesn’t have enough liquidity. The fastest execution speed is most important for traders using scalping strategy, expert advisors, or any other automated trading software.
SUPPORT
Brokers offer different ways of customer service support. Make sure that the broker you choose has good 24/7 support via LiveChat, email, or phone to resolve any issues quickly and adequately.
