5 Tips For Selecting A Forex Broker

If you are searching for a forex broker, you are either a beginner or you have plenty of forex trading experience but your current broker is not working for you anymore. Trying to find a better one may be more difficult, as you already know what you’re looking for. Also, there are so many brokers out there and it is hard to choose the right one.

The forex industry is booming and there are many new brokers everywhere you look, with many attracting good and bad reviews. If you are confused or feel overwhelmed, rest assured that you’re not the only one and that many traders feel this way. Taking a leap of faith and putting your trust and money in the hands of a broker is a big step, not to mention finding a broker that actually suits your needs and can support you.

Forex Broker, select the good ones

Whether you are a new trader ready to discover all the exciting things you can do with the support of a good forex broker or someone who has enough experience, there are some key considerations when choosing your broker.

Security, regulation, transparency

These three factors are all interrelated and are significant aspects to consider before choosing a forex broker. From the security of your funds to the privacy of your data, you need a broker who is transparent, regulated, reliable and trusted by many traders.

Always go for a trusted name that is regulated or is clearly transparent about their methods and way of operation and provides enough information on their website to understand the ins and outs of their business. If they are showing you their legal documents, can reply to your messages and are upfront about their procedures then you start forming an idea of a broker who is open and clear from the start. These factors are very important and will guarantee that you have a positive experience with your forex broker.

If you are looking for a regulated broker, you can check with which legal bodies they are registered. For example, if they operate in the UK, then the FCA will authorise them, in the EU you may have CySEC, SEC in the US and so forth.

Deposits and Withdrawals

This is a big one, as many of us have read the reviews about brokers not responding or traders having difficulty withdrawing their profits. Others have complaints about withdrawal or deposit costs, or deposit methods. All these things you need to clarify from the beginning so you know what you can do and what your rights are. Some brokers use segregated accounts where they keep your funds separate from the business’ funds ensuring that they are safe and protected at all times. Other forex brokers provide negative balance protection, which means no matter what happens in the markets and you incur losses, your account will never go negative and the broker will cover any costs so you always have as much as you initially deposited.

Competitive fees and costs

From low or zero commission to tight spreads and trading fees, if you don’t think about your costs you may end up losing more than you expect. Always look for a broker that offers competitive pricing so you can limit your costs and increase your potential profits. Look for the best value broker with the lowest fees and the lowest spreads on the instruments you want to trade.

You will need to check the number of base currencies they offer so you can avoid high fees when converting to another currency. As mentioned, some banks may also charge deposit or withdrawal fees so check what the broker’s rule is and what your bank may charge you.

Trading instruments offered

Another key consideration is how many trading instruments a broker is offering. You want to find a broker who offers a wide range of trading instruments, or at least the ones you are interested in trading. If you are a forex trader, look for how many currencies they are offering and if they have the pairs you want to trade.

Additionally, check the accounts they offer and their conditions. Some brokers may offer very tight spreads for major currency pairs while others may offer very expensive spreads on less popular currency pairs such as exotic ones. Just explore what they offer and then decide whether you like the broker or not.

CFD trading

Brokers tend to provide the opportunity to trade a variety of instruments with CFDs, so you can enter trading with less capital and speculate in both directions without owning the underlying asset. CFD trading also comes with the ability to trade all these assets with leverage (or extra trading power).

This allows you to deposit a smaller amount of funds and borrow the rest from the broker, allowing you to trade bigger and potentially make more. As always, this comes with more risks, so trade smart and risk only the funds you can afford to lose.

Mobile apps

Mobile trading is very big right now, and many brokers may offer this. You can trade by downloading MT4 on your phone or by downloading a broker’s own trading app. With the ability to trade from wherever you are, monitor your trades and access any resources, trading has never been easier. If you are a busy person and would love to have the ability to trade on your mobile, then you need to find a broker with a great app.

Copytrading

Social and copy trading have been growing in popularity and many brokers provide this kind of platform. Ideal for those who want to participate in online trading but don’t have the time or knowledge, copy trading allows you to follow experienced traders and copy their trades. You can find successful traders and then follow their strategies.

آموزش

While trading education websites are everywhere, sometimes these are behind a paywall and difficult to access. Others are free and offered to traders who sign up with a broker, or completely available to everyone online. Forex brokers who offer educational material are great as they usually provide a wide range of resources and support to their traders. From webinars to videos, eBooks and articles, good brokers tend to do everything on their side to boost their traders’ confidence and abilities. 

From educational materials to demo accounts, daily research and analysis and an impressive range of tools and products, there are many factors that will influence your decision when choosing the right broker. Take your time, do some research and you will find the right broker. With so many choices, you will not fail in finding the one for you. And if the first time is not the charm, with so many brokers and competition in the market, you will eventually find the most suitable for you. Keep looking and good luck!

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This information is not considered investment advice or an investment recommendation, but instead a marketing communication. IronFX is not responsible for any data or information provided by third parties referenced or hyperlinked, in this communication.