Don’t waste your time sifting through the endless list of available online forex brokers. Here are our top tips for making the perfect choice.
With close to FOUR TRILLION USD traded daily, forex is, hands-down, the largest financial market in the world. That being the case, your first step as a new foreign exchange trader must be
choosing a top-notch forex broker. Take it from us – not all forex brokers are created equal.
But before you start browsing through an endless list of websites, you must be focused on what to look for in a forex broker. Your decision should be informed and also be one you feel comfortable with.
We went ahead and saved you time.
These are the crucial questions to ask yourself when choosing which online forex broker to trade with:
Question #1: Is It Safe?
Before anything else, you want to make sure your funds are safe.
Your broker of choice must operate honestly, keeping your deposit protected and segregated. Fortunately, this aspect is fairly uncomplicated to figure out: A reputable forex broker is overseen by a major regulatory organization like NFA or CFTC in the U.S, FCA in the UK, CySec in Europe, etc. Look for their logos on the broker’s homepage and in the “About Us” section.
Question #2: Are They Charging Fees?
Trading costs can really dig into your chance for profitability.
But! Forex brokers usually build their commission into the ‘spread’ (the difference between the ask and the bid prices of a currency pair). You’ll be surprised to know that going for a broker with the lowest spreads is not necessarily the best strategy. The reason is simple – the average spread doesn’t necessarily apply to the type of orders you chose.
A respected forex broker usually provides a number of trading accounts with different spread, commission fees, and leverage sizes. Make sure the spreads and fees are not much higher than the market average and choose the one that fits your budget.
Check out the broker’s specific account funding withdrawal policies and whether a fee is charged for either service.
Question #3: Is the Forex Platform User-Friendly?
Our golden tip: Open a demo account (it’s free) and get acquainted with the broker’s trading platform. Ensure that the interface is intuitive, customizable, and offers a variety of analytical tools, and opening a position is easy and clear. It’s also essential to track the slippage and disconnections situation.
Also, you want to have deposit funds and withdraw earnings conveniently, through a speedy and smooth process.
Question #4: What Do Other People Say?
Yes, reading online forex broker reviews and professional forums must be a part of your background research. It’s important to read reviews from multiple sources and exercise good judgment.
Make sure the reviews come from a credible source and filter out reviews that are clearly fake (both positive and negative) or blame the broker for losing money (everyone loses money from time to time).
Question #5: Will Your Forex Broker Have Your Back?
Your broker should be available to you when problems arise and to actually solve them. The best way to put it to the test is to run a pilot:
- Open a free demo account with a few potential brokers
- Start sending them emails and chat messages and see how quickly they respond
- Make sure they can solve various problems (technical issues, withdrawal requests, operational guidance, etc.)
It’s vital to trade with a broker that’s available and helpful both during the account opening process and ongoing support.
Go Ahead and Find the Perfect Forex Broker for You
You are now ready to get out there and find the best forex broker to trade with.
At the end of the day, your broker of choice should be greater than the sum of its parts: Confidence is key here, as well as the right balance between competitive pricing and quality service.
With just a little bit of homework, you’re on the fast track to finding the right match and increasing your money-making chances.