What You Should Consider in Choosing a Forex Broker?
The Forex market is another form of the foreign exchange market. It is the process of exchanging a currency into other currency for several reasons, might be for trading, or tour. According to some recent reports from the Bank for International institutes, the turnover of the Forex market is currently at more than $5.1 trillion.
In the next section, we will see the basics of the Forex market including the elements of it. Therefore, you would know how overall activity in this market occurs and how you can make a benefit from the foreign exchange market.
Forex market is very competitive, so finding the right Forex broker is very difficult and can be a cause of headache for investors.
So choosing the right Forex broker could be a very overwhelming task especially when you don’t know what should be the right criteria to choose a broker.
In this article we going to discuss which criteria you should look while choosing the right broker, there are several categories, now we are discussing them below.
Security of the Broker
The most important factor that is good broker must have is the high level of security he can offer.
It is very obvious that you are not going to hand over thousands of dollars to a person you don’t know properly, right?
But you don’t have to worry, because it is not very difficult to check the credibility of the forex broker.
There is an International regulatory agency all over the world that separates the trustworthy forex broker from the fake and illicit one. Below we have given the country name and the corresponding regulatory bodies:
- Commodity Futures Trading Commission (CFTC)
- National Futures Association (NFA)
- Financial Conduct Authority (FCA)
- Prudential Regulation Authority (PRA)
- Australian Securities and Investment Commission (ASIC)
- Swiss Federal Banking Commission (SFBC)
- Bundesanstalt für Finanzdienstleistungsaufsicht ( BaFIN )
- Autorité des Marchés Financiers (AMF)
- Investment Information Regulatory Organization of Canada (IIROC)
If you are thinking of putting your money to the brokers, you have to make sure that the broker is a member which is authorized by the regulatory bodies.
Broker Transaction Costs
No matter what kind of currency you trade, there is always a transaction cost that you have to pay.
Every time when you entire to trade, you have to pay either the commission or the spread. So it is very natural you look for the cheapest and affordable price rate. Sometimes you have to pay more transaction cost for a reliable broker
So so if you need tight is spread, you have to make sure and review all your available options. after all, you have to maintain a combination of low-security cost and reliable broker.
Deposit and Withdrawal facility from the broker
If you find a good broker there will be no hassle to deposit your fund and when you withdraw your earning.
Broker has no other reason to make it difficult for you to withdraw your fund, they just want to hold it longer to facilitate their trading
The broker holds your money just to continue their trending, So there is no other reason for you to spend a hard time, good broker always makes sure that the withdrawal process is very speedy and smooth.
In the online Forex trading, most of the time trading happens by the brokers trading platform.
Which rules the trading platform provided by the broker has to be very user-friendly and stable
When you look at the broker, check what kind of trading platform it offers. Whether it offers a free news feed. What kind of tools do they offer?
Are they easy to work with?
Do they provide all kinds of the necessary information to trade properly?
Execution Office a broker
It is very important that your broker provides you all the necessary support at the best reasonable price for your wader.
Under the normal market, the condition is very important that you are broker feel you out very quickly. For example, suppose you have a proper internet connection, now if you click by Euro/USD for 1.5000.
You should be get filled at the price within a microsecond. The speed at which your order gets filled is very important, especially when you are scalping.
A few pips difference in price might make it much harder for you to trade and make a profit.These are the key driving factors for a particular currency pair.
If a certain country has a trade surplus it means there is a high demand for its product in the outside country.
On the other hand, it also means there is a greater demand for its currency Which increases the currency value. in the same higher relative interest rate leads to the cash inflow by increasing the value of that particular currency.
Customer Service of the brokers
There is nothing like a perfect broker and you have to pick a broker that they can easily contact when you need.
A broker is considered competent if it provides all kinds of Technical supports to the accounts.
It is a common acquisition that the broker may be passionate while opening an account, but you might have a terrible after Sales Service from that broker.
Choosing a forex broker should not be conflicting between you and your broker.
Find a broker that doesn’t go against you. Make sure your broker is regulated by the government bodies.
Their demo account should be as like at their real account, if there is a difference then you are going to lose money on real ground.
Make sure your demo account is free.
There are people who charge for demo but you should not be paying for a demo account.
Good market selection is another important issue. In major pares the spread is very tight so you should not be paying additional fees.
The broker has to be transparent.
There address or website has to be proper.
They should be regulated by government bodies. You should cross-check all the information. You suppose to ask all the questions to verify. When you will see that transparency, you can invest.
It is a two-way deal, we want to make money, on the other hand, they take money from all other people to trade so that they can make a profit. So it is a win-win situation for both of us.
Determine the customer service they provide. Call them, text them and see how quick they are in responding. There is a team 24/5 dedicated to your service.
A good range of tools is another important thing.
In a trading platform, it is very important to have all the necessary tools.
Sometimes it so happens that we choose a broker but after it does not fir right and sometimes we have to change the broker. So all these are more or less important things to verify while choosing the right Forex broker.