How to choose the right forex broker

choose the right forex broker

Who is a Forex Broker?

Forex Broker is a firm or company who executes orders to buy and sell currencies and related instruments for their clients; they usually make money on either the commission or on a spread.Forex brokers are firms that provide traders with access to the Forex Market.

What are the things to consider while choosing a Forex Broker?

Security: The first and principal feature that a Forex Broker must have is a high degree of safety (high level of security). After all, you’re not going to hand over hundreds of greenbacks to someone who in reality claims he’s reputable, right? Employing an unregulated broker can prompt numerous potential misfortunes (losses). Try not to increase the dangers of losing your deposit and decide to work with a regulated broker whose exercises are observed by a regulatory agency.

Luckily, checking the credibility of a forex broker is not very hard. There are regulatory organizations everywhere throughout the world that separate the trustworthy brokers from the fraudulent ones.

The following is a list of nations with their corresponding regulatory bodies;

  • United Kingdom: Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA)
  • Canada:  Investment Information Regulatory Organization of Canada (IIROC)
  • United States: National Futures Association (NFA) and Commodity Futures Trading Commission (CFTC)
  • France: Autorité des Marchés Financiers (AMF)
  • Switzerland: Swiss Federal Banking Commission (SFBC)
  • Germany: Bundesanstalt für Finanzdienstleistungsaufsicht (BaFIN)
  • Australia: Australian Securities and Investment Commission (ASIC)

Broker’s Trading Platform: It is important to ensure that the trading platform doesn’t freeze at whatever point trader needs solidness or stability. You ought to explore the overall trading platform to know about the tools or charts offered. Also, the trading platform must be user friendly. When looking for a broker, always ask yourself the following questions;

  • Does it offer free news feed?
  • How about easy-to-use technical and charting tools? 
  • Does it present you with all the information you will need to trade properly?

Transaction Cost (spread and leverage): Spreads (sales fees) are one of the main sources of broker’s income and their aim is obviously to have spread as high as possible which is bad for traders. Regardless of the kind of currency trader you are, either you like it or not, you will always be subject to transaction costs. Each and every time you enter a trade, you will pay for either the spread or a commission so it is just normal to search for the most moderate and least expensive rates. Sometimes, you may need to forfeit low transaction for a more reliable broker.

Deposit and withdrawal: Good Forex brokers will enable you to deposit funds and withdraw your profit without going through any stress. Brokers truly have no reason to make it difficult for you to withdraw your profits because the reason they hold your assets is to encourage trading. Your broker just holds your fund to make trading simpler so there is no reason for you going through stress before getting the profits you have earned. Your broker should ensure that the withdrawal procedure is fast and smooth.

Currency pairs available: You should check the currency pairs that a broker can offer to you. Also, a broker can always offer you the significant currency pairs, yet in case you’re keen on foreign pairs like EUR DKK, check this option before picking your broker.

Customer Service: Brokers are not perfect, and in this manner you should pick a broker that you could without much of a stretch contact when issues emerge. The skill of specialists when dealing with account or technical support issues is just as significant as their performance on executing trades. While looking for a decent and dependable Forex broker for your trading, it is necessary to discover how rapidly and operatively an agent can speak with you. Look at all the options. That implies that if the broker can communicate by phone, try it. Also test how rapidly he reacts to an e-mail, see whether he is utilizing Skype or different kinds of online communication.

Parameters of a good Broker:

  • A Broker must have high level of security.
  • A Broker must be a member of a regulatory organization.
  • A Broker’s trading platform must be solid and stable (doesn’t freeze).
  • Spreads and leverage must be moderate. They must not be too high.
  • Deposit and Withdrawals must be smooth.
  • Customer service should be reachable at any time.