Below, we mention some tips on how to choose the best forex broker and assist you in order to save some valuable time upon your research on which broker to choose.
1. Regulatory, Compliance and Safety of funds.
The first and most important factor that you should look for in a forex broker is its regulatory compliance environment. The broker should be registered and authorized under a reputable Financial Authority, while having a respective license number which is always available to the public. Most of the time the License Number is posted at the broker’s webpage. A regulated firm provides certainty and security that the broker is audited and follows specific rules in terms on the Firm’s capital as well as clients’ money. Regulated brokers offer clients’ money protection up to a certain amount in case of insolvency, depending on the regulated authority.
2. Offered trading account types and trading conditions
Almost every forex broker offers several trading account types. The tough part is to find the one that meets your trading style and strategy. Depending on the regulatory restrictions, brokers offer leverage from 1:1 till 1:500. Some brokers (usually the unregulated ones) offer even more. Traders should use leverage carefully since it may lead to great profits, but also great losses.
Accounts can also be distinguished in regards of the commissions and spreads offering. The two (2) most common account types are the Standard and the ECN trading accounts. Standard accounts have wider spreads than the ECN ones, but ECN trading accounts usually come with commissions applied upon opening or closing trading orders. Swaps are also an extra cost that you should consider for your trading account since they may seriously affect your trading plan. Every forex broker should provide you with a list of spreads and swaps once it’s requested, so you will be able to have all this information available. Keep in mind that many brokers offer fixed spread and swap free trading accounts, but only after you specifically request it.
Regarding the offered account types, it’s important to note the available trading platforms, trading pairs/symbols and the respective trading hours. These tools will play a significant role in your trading strategy.
3. Available payment methods for deposits and withdrawals
The ease of money transfer either for funding or withdrawal funds is very crucial. Brokers offer a wide range of payment methods, including bank wire transfers, credit and debit card transactions, electronic wallets (e-Wallets), while lately the use of cryptocurrencies is getting more and more momentum. It is important to know the offered payment methods for deposits and withdrawals, since this will be a significant factor to know in advance how you will move funds from and to your broker and any additional fees and charges involved.
4. Customer Support Service and Educational tools
The available contact methods and how fast and knowledgeable the support service offered is from a broker are quite important. There are brokers at the Finance Industry that reply to an email or query within 1-2 hours from the time of receipt. Others state on their multilingual website that they can guarantee any client’s issue solved within 24h.
24/5 or 24/7 customer support services via email, phone communication or live chat service are among the most common practices for a Support Department to get in contact with existing or future clients. Customer support and forex education is vital, especially for beginner traders. Many brokers offer full online forex courses, webinars, or educational videos and eBooks to provide this huge amount of information to their clients.
Taking into consideration the above information and having a quick search on the internet in regards of the ‘online’ reputation of a broker, are the best tools to have available upon selecting a forex broker to start your trading journey. Needless to mention that if you find many complaints in a forum about a forex broker in regards of trading conditions, withdrawals, etc, it would be a solid sign to avoid registering there. Communication, ease of transactions and trading conditions should be as smooth as possible with a broker, showing at the same time that the value of mutual trustworthiness is there.