The forex market is very competitive and finding the right Forex broker can be a painstaking process. It can be even more challenging for novice traders. As much as it seems very complicated, narrowing down a few factors to consider may point you to the right direction in making the right choice.
Compare and Contrast
What you can initially do is write down a list of forex brokers, compare, and contrast them according to certain conditions. You may start comparing them based on the account currencies they have, platforms/systems they use, maximum leverage, spread types and other things you may be looking for in a broker.
Most of these brokers would also have an available open demo account at your disposal and see which of them work for your needs.
Trading Regulatory Body
Checking for credibility of forex brokers is not difficult these days and regulatory bodies are present all over the world. Knowing the level of security the potential forex broker has can definitely give you a peace of mind that will enable you to focus on your trades. Some of these regulatory bodies are:
- Australia: Australian Securities and Investment Commission (ASIC)
- United Kingdom: Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA)
- Switzerland: Swiss Federal Banking Commission (SFBC)
- United States: National Futures Association (NFA) and Commodity Futures Trading Commission (CFTC)
Make sure that the broker you chose is a member of its country’s regulatory body before taking that leap.
It is important to check your Forex broker’s trading platform. Is it user friendly? Does it include economic news? Are you able to use the charts properly? Does it present all the data that you need? Check on their Forex Trading platform as this may make or break certain decisions that you will make during the course of your foray. You might have the weapons but not being able to use them according to its intended purpose would be burdensome.
Check on their customer service
How fast does the broker respond to your queries? Are they able to answer and find a solution for your concerns? Some brokers would be more than willing to assist you while others would have terrible after-sales support for its clients. It is very crucial to choose a broker that can immediately respond to certain concerns that you may have. This is very crucial and can make or break your forthcoming decisions in Forex trading.
Commissions and Fees
The commission structures fall into three categories: fixed spread, variable spread and percentage of the spread. All three of them are based on the difference between selling and buying price, which is the spread amount. With some brokers, it is possible to choose between a fixed and a variable spread.
Data provisions and regulations will usually have fees while some will charge no fees and no commissions and will usually earn from spreads. Always check how many pips have to be paid to the broker per trade as this can be easily overlooked. Determine your payments based