6 Important Things to Consider When Selecting A Forex Broker

6 Important Things to Consider When Selecting A Forex Broker

The reach of the internet has opened up the world of Forex trading to the masses and as such the retail forex market is now one of the most competitive areas of financial trading. The number of brokers which now offer a trading platform seems to grow on a daily basis and sifting through the good and the bad is a daunting task especially if you are new to trading.

In this section we look to highlight the key points that you should be aware of when selecting a broker.

The most important thing to look for is the security of the broker, you don’t want to be handing over your hard earned money to a broker who just has a good looking flashy website and is promising huge sign up bonuses. Just because the broker claims to be legit and regulated double check before depositing any funds, at the end of the day anybody can build a website and claim to be legitimate. Checking the validity of a brokers claims to be regulated is straight forward, there is a simple and quick way to check. Different countries have regulatory bodies which a good trustworthy broker will be licensed by. Below is a list of major countries with their regulatory bodies with a link to their website.

Always check the broker is regulated by checking the regulatory authority the broker claims to be regulated by. Don’t click a link of the brokers website always go via the regulators site.

No matter what kind of currency trader you are, like it or not, you will always be subject to transaction costs.

Every single time you enter a trade, you will have to pay for either the forex spread or a commission so it is only natural to look for the most affordable and cheapest rates. Sometimes you may need to sacrifice low transaction for a more reliable broker.
Make sure you know if you need tight spreads for your type of trading, and then review your available options. It’s all about finding the correct balance between security and low transaction costs.

Good FX brokers will allow you to deposit funds and withdraw your earnings hassle-free. Brokers really have no reason to make it hard for you to withdraw your profits because the only reason they hold your funds is to facilitate trading.

Your broker only holds your money to make trading easier so there is no reason for you to have a hard time getting the profits you have earned. Your broker should make sure that the withdrawal process is speedy and smooth.

In online forex trading, most trading activity happens through the brokers’ trading platform. This means that the trading platform of your broker must be user-friendly and stable.

When looking for a broker, always check what its trading platform has to offer.

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?

It is mandatory that your broker fill you in the best possible price for your orders.

Under normal market conditions (e.g. normal liquidity, no important news releases or surprise events), there really is no reason for your broker to not fill you at, or very close to, the market price you see when you click the “buy” or “sell” button.
For example, assuming you have a stable internet connection, if you click “buy” EUR/USD for 1.3000, you should get filled at that price or within micro-pips of it. The speed at which your orders get filled is very important, especially if you’re a scalper.

A few pips difference in price can make that much harder on you to win that trade.

Brokers aren’t perfect, and therefore you must pick a broker that you could easily contact when problems arise.

The competence of brokers when dealing with account or technical support issues is just as important as their performance on executing trades. Brokers may be kind and helpful during the account opening process, but have terrible “after sales” support.