If you want to start Forex trading or currency trading, one of the first steps that you have to take is choosing a Forex broker. The majority of beginners in Forex usually do trials and errors until they can find the best broker that suits their needs. In order to save time and minimize trials and errors, the followings are several helpful tips that you can use when choosing a Forex trading broker.
1. Check the registration
You have to ensure that any broker that you are going to deal with is registered with a regulatory agency. Do not immediately trust a broker that claims to have a legit business before checking the registration. If a broker is not registered to any regulatory agency as promised, you can be sure that the broker is a scam. Contact the regulatory agency in your country to verify the broker’s credibility. The followings are regulatory agencies around the world.
– United Kingdom, Financial Services Authority (FSA) – France, Autorité des Marchés Financiers (AMF) – Germany, Bundesanstalt für Finanzdienstleistungsaufsicht (BaFIN) – Switzerland, Swiss Federal Banking Commission (SFBC) – Australia, Australian Securities and Investment Commission (ASIC) – United States, Commodity Futures Trading Commission (CFTC) and National Futures Association (NFA)
2. Check the mechanism of deposit and withdrawal
A good Forex trading broker always provides convenient deposit and withdrawal mechanism for traders. It is your money that you put into your account so you must be able to withdraw your money at anytime you want. To avoid unwanted things in the future, you have to read the policy carefully before dealing with a broker. If you find a point or two in the policy that might give difficulty for you to withdraw your money, you should leave the broker.
In terms of initial deposit, it is advisable that you choose a broker that allows a low initial deposit such as $100 or $300. If a broker requires you to deposit $10,000 for an early deposit, you should be cautious. In reality, the majority of reputable Forex trading brokers offer low initial deposit for traders.
3. Check broker commission
In order to get a profit, a broker always charges broker commission on every single trade conducted by traders. The amount of broker commission is different between brokers and it is your task to find a broker with the lowest commission. One thing that you have to keep in mind is to keep a balance between security and low broker commission. In some cases, brokers that charge the lowest commission do not provide a good security level for traders.
4. Check whether the broker allows traders from your country
Some Forex brokers out there disallow traders from several countries. For an example, there is a trusted broker in the UK that disallows traders from the US. You have to make sure that the brokers you are comparing allow traders from your country to open an account.
5. Check the trading platform
A professional and reliable trading platform is a must for Forex trading. Most reputable brokers provide traders with easy-to-use trading platform and easy-to-understand training. A good trading platform provides you with all the features that you need to execute your trading. Create a demo account at several brokers so you know the performance of each trading platform.
6. Check the reputation
A glossy sales page should not be your consideration when checking the reputation of a broker. Do your homework by searching reviews and opinions from other senior traders. You can go to several popular Forex forums such as Forex Peace Army and BabyPips, or search reviews through the search engines.
7. Check the execution
Fast execution is very important in Forex trading. Brokers that provide fast execution can help you to get a price close to the price that you see on your screen when pressing the “buy” or “sell” button. For an example, if you buy EUR/USD 1.290 then the broker must be able to get you at a price close to that price. Additionally, a fast and stable internet connection is mandatory in online Forex trading.
8. Check the customer service
Forex trading runs 24 hours a day so brokers must provide you with 24 hours customer service. Problems can occur at any time, and when they occur, you can get responses immediately from reliable brokers with quality customer service. The best way to check the customer service reliability of a broker is by asking some questions via phone in several different times. Pay attention on how responsive they are and how accurate their solution is in answering your questions.
As final words, take your time in choosing a Forex trading broker and conduct thorough evaluation on several brokers. Your chosen broker should be the one that you fully trust to hold your hard-earned cash. If you apply the above tips when choosing a Forex trading broker, chances are you will find one that suits your needs.
If you want to start Forex trading or currency trading, one of the first steps that you have to take is choosing a Forex broker. The majority of beginners in Forex usually do trials and errors until they can find the best broker that suits their needs. In order to save time and minimize trials and errors, the followings are several helpful tips that you can use when choosing a Forex trading broker.
1. Check the registration
You have to ensure that any broker that you are going to deal with is registered with a regulatory agency. Do not immediately trust a broker that claims to have a legit business before checking the registration. If a broker is not registered to any regulatory agency as promised, you can be sure that the broker is a scam. Contact the regulatory agency in your country to verify the broker’s credibility. The followings are regulatory agencies around the world.
– United Kingdom, Financial Services Authority (FSA)
– France, Autorité des Marchés Financiers (AMF)
– Germany, Bundesanstalt für Finanzdienstleistungsaufsicht (BaFIN)
– Switzerland, Swiss Federal Banking Commission (SFBC)
– Australia, Australian Securities and Investment Commission (ASIC)
– United States, Commodity Futures Trading Commission (CFTC) and National Futures Association (NFA)
2. Check the mechanism of deposit and withdrawal
A good Forex trading broker always provides convenient deposit and withdrawal mechanism for traders. It is your money that you put into your account so you must be able to withdraw your money at anytime you want. To avoid unwanted things in the future, you have to read the policy carefully before dealing with a broker. If you find a point or two in the policy that might give difficulty for you to withdraw your money, you should leave the broker.
In terms of initial deposit, it is advisable that you choose a broker that allows a low initial deposit such as $100 or $300. If a broker requires you to deposit $10,000 for an early deposit, you should be cautious. In reality, the majority of reputable Forex trading brokers offer low initial deposit for traders.
3. Check broker commission
In order to get a profit, a broker always charges broker commission on every single trade conducted by traders. The amount of broker commission is different between brokers and it is your task to find a broker with the lowest commission. One thing that you have to keep in mind is to keep a balance between security and low broker commission. In some cases, brokers that charge the lowest commission do not provide a good security level for traders.
4. Check whether the broker allows traders from your country
Some Forex brokers out there disallow traders from several countries. For an example, there is a trusted broker in the UK that disallows traders from the US. You have to make sure that the brokers you are comparing allow traders from your country to open an account.
5. Check the trading platform
A professional and reliable trading platform is a must for Forex trading. Most reputable brokers provide traders with easy-to-use trading platform and easy-to-understand training. A good trading platform provides you with all the features that you need to execute your trading. Create a demo account at several brokers so you know the performance of each trading platform.
6. Check the reputation
A glossy sales page should not be your consideration when checking the reputation of a broker. Do your homework by searching reviews and opinions from other senior traders. You can go to several popular Forex forums such as Forex Peace Army and BabyPips, or search reviews through the search engines.
7. Check the execution
Fast execution is very important in Forex trading. Brokers that provide fast execution can help you to get a price close to the price that you see on your screen when pressing the “buy” or “sell” button. For an example, if you buy EUR/USD 1.290 then the broker must be able to get you at a price close to that price. Additionally, a fast and stable internet connection is mandatory in online Forex trading.
8. Check the customer service
Forex trading runs 24 hours a day so brokers must provide you with 24 hours customer service. Problems can occur at any time, and when they occur, you can get responses immediately from reliable brokers with quality customer service. The best way to check the customer service reliability of a broker is by asking some questions via phone in several different times. Pay attention on how responsive they are and how accurate their solution is in answering your questions.
As final words, take your time in choosing a Forex trading broker and conduct thorough evaluation on several brokers. Your chosen broker should be the one that you fully trust to hold your hard-earned cash. If you apply the above tips when choosing a Forex trading broker, chances are you will find one that suits your needs.
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