The Forex market is very competitive, and just having to sift through all the available brokers can give you a big headache.
Deciding which broker to trade with can be a very tedious task, especially if you don’t know what to look for.
Here we will discuss the quality factors that you should take into consideration when choosing your broker.
First and foremost, a good broker should have a high level of security. After all, you’re not going to give thousands of dollars to someone who just pretends to be legit, are you?
Fortunately, verifying the credibility of a broker is not very difficult. There are regulatory bodies all over the world that separate trustworthy people from fraudsters.
Below is a list of countries with corresponding regulatory bodies:
United Kingdom: Financial Conduct Authority (FCA)
US: National Futures Association (NFA) and Commodity Futures Trading Commission (CFTC)
Australia: Australian Securities and Investment Commission (ASIC)
Switzerland: Federal Banking Commission (CFB)
Germany: Bundesanstalt für Finanzdienstleistungsaufsicht (BaFIN)
Canada: Investment Information Regulator of Canada (IIROC)
Before you think about entrusting your money to a broker, make sure they are a member of the regulatory body mentioned above.
2. Transaction costs
When it comes to transaction costs, no matter what type of Forex trader you are, you will always be subject to transaction fees.
Every time you enter a transaction, you will have to pay the spread, so it is normal to look for the most affordable and cheapest rates.
Also, make sure you know if you need tight spreads for your type of trading, then go through your available options. It’s about finding the right balance between low transaction costs and low transactions.
3. Deposit and withdrawal
Good currency brokers will allow you to deposit funds and withdraw your winnings hassle-free.
Brokers really have no reason to prevent you from withdrawing your profits because the only reason they hold your funds is that they want to make trading easier for you.
Your broker only holds your money for your convenience in trading, so there is no reason for you to have difficulty obtaining the profits you have made. Your broker should make the withdrawal process quick and easy.
4. Trading platform
In online Forex trading, most of the trading activity is done through the trading platform offered by the brokers. It means that your broker’s trading platform should be user-friendly and reliable.
When looking for a Forex broker, always check by reading Forex broker review what their trading platform has to offer you.
Does it offer a free news feed? Are the technical and graphical tools easy to use? Does it give you all the information you will need to negotiate properly?
It is mandatory that your broker gives you the best possible rates for your orders.
For instance, under the condition that you have a stable internet, if you click “buy” EUR / USD for 5000, you should be supplied at that price or in micro-pips from it. The speed at which your trading orders are executed is very important, especially if you are a scalper.
A few small price differences can make it even more difficult for you to win this trade.
6. Customer service
Customer service is paramount in trading, so you should choose a broker that you can contact quickly in case of any issues.
The skill of brokers in handling the account or technical support matters is just as important as their performance in executing trades.
Brokers can be kind and helpful during the account opening process, but some offer catastrophic “after-sales” service afterward. Beware and read the reviews that can be found on the internet before you open the account.