The retail forex market is a competitive one and you will come across hundreds of brokers offering their services to anyone interested in trading foreign currencies. Having to sift through all these options in order to find the right broker can give people a major headache. It can be a very overwhelming task to make the final decision, especially when you don’t know what to look for. Making the right decision is important because there have been too many scams in this market and you don’t want to be another statistic. What forex broker should I use? Listed below are some of the qualities that you should look for in a broker:
First and foremost, any forex broker worth their salt will implement robust security measures to create a safe trading environment for their clients. Forex trading online involves sharing your personal information and your funds with a third party and you don’t want to do it with someone who just claim to be legitimate. Luckily, checking the credibility and security of forex brokers is not that difficult. Regulatory agencies all over the world can distinguish between trustworthy and fraudulent brokers. No scam forex brokers will sign up for regulation because they know they will be exposed.
No matter what kind of forex trader you are, you will have to pay transaction fees during trading. Every time you enter a trade, you will either have to pay commission or spread. Therefore, it seems practical to look for a forex broker that offers you the most reasonable and cheapest rates. If you want tight spreads for trading, always check what the broker is offering and compare it with others. However, this doesn’t mean that you should compromise on a broker’s reliability for a low transaction fee.
In addition to that, you should look for any commissions on the trades. Some brokers mention their commissions clearly while others pop out of nowhere with hurting commissions right when you enter your first trade.
For online trading, you have to use the trading platform provided by the broker for executing your trades. This means their trading platform needs to be stable and user-friendly. Always check what kind of trading platform a broker has to offer. Does it have useful charting and technical tools? Is it easy to navigate? Does it lag or work smoothly?
Deposit and Withdrawal Methods
Good and reliable forex brokers typically allow their traders to deposit and withdraw their money in a hassle-free way. Legitimate brokers don’t really have any reason to make it difficult for you to withdraw your profits because they just want to facilitate the entire trading process. Only scam brokers will have strings attached because their aim is to use your money and not let you get it back.
A forex broker cannot be perfect due to which you should choose a broker that can be easily contacted if there is a problem. The competence of a forex broker when dealing with technical support or account issues is just as essential as their performance in executing trades. Brokers may be helpful during the account opening process, but may not offer sound technical support. It is best to check and know beforehand in order to choose the right one.
Safety of Funds
It is among the most important factors for you to confirm before you sign up with an online forex broker. What does the safety of your funds refer to? Well, when you deposit money in an online trading account with a broker, you are depositing money in a real account. It is not as though the broker has a safe locker in which it is saving the money you are sending through wire transfers, credit cards, etc. The broker has an account with a bank where it is supposed to put the money of the traders. Now, the broker is a company so it has its company account with the bank as well. However, this is the bank account in which you don’t want your money to go.
If a broker is doing this, you should definitely find another one. According to the industry standards and for the purpose of your safety, you should look for a broker that stows away your money in a separate bank account. You don’t have to worry as to how you will find that information. Every broker that maintains separate accounts for its traders mentions this specifically on its website. So, you will know when the broker mentions “segregated accounts” on the website that your money is going into accounts that are specifically dedicated only to the funds deposited by the traders.
Safety of Information
It might sound surprising at first but it is true that the importance of your information is much more than the importance of your money in 2020. In these times, your money is just what it is worth on the face. On the other hand, your information has a lot of intrinsic value. If someone steals your money, they can only use that money to buy something for themselves. Even if they end up buying some lethal weapons with that money, you will not be held accountable. On the other hand, if someone steals your information, you can face mountains of troubles in your life.
These scammers and identity thieves steal your information and then use this information on various websites to buy things in your name. In this particular case, they might even use their own money, but it is your information that is going to appear on their transactions and bank statements. So, if they make a weapon deal with a terrorist organization, they will use your name instead of their own. This can get you in huge trouble if you do not sign up with the right broker. If you have chosen the right broker, your information will be saved through encryption. Once your information has been encrypted, it cannot be used by anyone even if they access it because it is has been converted into a completely intelligible symbolic babble.
The Types of Trader Accounts
You are a trader and the first thing you should be looking at when choosing a forex broker is the type of accounts available to you. It is strange that there are still many online brokers that target only experienced brokers. How can you know that? Well, just look at the account types they offer and you will find out. You require a lot of money as an initial deposit to start their basic accounts. In most cases, new traders do not have this much money or they are not willing to put this much money at risk just like that before they have tried things.
So, you have to look for a broker that offers trader-friendly account types. The account type you choose should have some sort of bonus, a small initial deposit requirement, and many features that are just as important for a basic account holder as they are for an advanced account holder.
Can you start trading right away if you are new to trading? Even if you think you can, you are highly recommended to keep this thought at bay. You are going to do yourself a lot of injustice and loss if you start trading without proper training. The best thing is that you do not even have to do any runaround for getting proper training. You do not have to find any special online or physical institutes to learn to trade. You do not even have to spend money on expensive teachers just because you want to learn how to trade in the forex market. Why? Because your broker will provide you with all the necessary training you need for trading forex.
Now, you have to look carefully at how you will be trained by the broker. Once you have made your first initial deposit, you are eligible to take advantage of the training material for free. So, that’s the first thing you have to check. If the broker is still asking for more money, you have made a mistake. In addition to that, you have to look at the type of training material you have available. If you are being offered only ebooks, then the training material is not worth it. The broker should give you access to not only ebooks but videos, glossaries, and other useful pieces of information as well. Most importantly, you should have permission to join webinars where you can learn from the best traders in real-time.
There is no dearth of online brokers today. You will find many that provide you with some great trading platforms and other features of interest. However, you cannot ignore the importance of a broker that is good all around. You want the perfect package, and since you are going to spend money with the broker, you have all the rights to pick the best one. Use the information given above to find the best forex broker, and make sure that you learn to trade before you put your hard-earned cash on the line.