The foreign exchange market is the world’s largest financial market with an equally overwhelming number of brokers. Choosing the right broker is no easy feat. You might want to consider these 9 factors when choosing the trusted forex broker.
1. Regulatory Compliance
Due to potential concerns regarding broker integrity and safety of deposits, it is crucial to choose a broker that follows regulatory requirements. Different countries have varying regulatory bodies and requirements so you should do your due diligence and confirm that your broker of choice has proper regulation. You can always verify the compliance of a broker by checking their website as well as the website of the respective regulator(s).
Check the reliability and quality of a broker by reading the opinions of traders who have worked with the broker before. Read online reviews and hear what others have to say about the firm. Even the most trusted forex broker has their pros and cons. When you learn about a broker’s disadvantages, ask yourself whether you will be willing to live with them. There are plenty of online resources and forums where you can get unbiased, objective reviews of forex brokers.
3. Data Security
Choose a broker with a safe and reliable track record. Currency trading involves the transmission of sensitive personal and financial data that you wouldn’t want to land in the wrong hands. Make sure your broker employs encryption mechanisms to ensure the safety and integrity of any information transferred on their platform. The last thing you want is to lose your money or run the risk of fraud and identity theft that may result from poor data-security measures.
4. Trade Execution
The quality of trade execution will have a significant impact on costs incurred and potential profits. A trader with good trade execution practices will fill your trades at the best possible rates and in a timely manner. Other factors to look out for include the re-quote policy in the broker agreement, Guaranteed Stop Loss Policy and Negative Balance Protection, all of which are essential features for prudent and cautious trading.
5. Trading Platform
As a trader, you need to ensure your broker’s trading platform is steady and reliable. Spare some time to go through reviews and verify that the platform is user-friendly, designed properly and easy to customize. You want a platform that has all the features and capabilities you’re looking for to succeed at trading. Most brokers offer a free demo account that you can try out before signing up for a real account.
6. Account Details
Each forex broker has different account options so you should choose what best suits your needs. For instance, a good broker will allow you to deposit and withdraw money without a hassle. Another critical factor to bear in mind is the minimum deposit requirement. Moreover, consider the kind of spreads offered by the broker, the commissions they charge, the currency pairs they support and whether they have all the trading features you seek. You also want a broker who is using state of the art technology.
7. Product Coverage
Thanks to changes in investor demands, innovative brokers allow traders to access other financial markets through a single account. Some traders offer trades on commodities, stock indices, precious metals, bonds, bitcoin, index options, single stocks in addition to major and minor currency pairs. Different traders will have varying offerings so it pays to make comparisons before settling for a broker. If you plan to expand your portfolio beyond forex trading, keep tabs on the products covered by prospective brokers.
8. Additional Services
Many brokers will provide additional services and material such as economic news, fundamental and technical analyses, webinars, e-courses, training, and other materials. When vetting potential brokers, check if the broker you’re considering offers additional tools and services that can help you advance your trading. Some brokers will even offer dedicated specialists to help with trading strategy and one-on-one training.
9. Customer Service
People often overlook customer service but the availability and competence of brokers when dealing with technical support or account issues is just as critical as their trade execution performance. Be wary of brokers who will be helpful during the account opening stages only to leave you in the dark once you’ve deposited some money. Find out other traders’ experiences with any potential brokers and make sure they offer reliable customer service
With the right tips, you should have an easy time choosing the right broker and start building a successful trading career.