Foreign Exchange or Forex is one of the largest financial markets. The Forex market has a daily turnover of around $4 trillion. This market operates 24/6. It opens on Sunday afternoon in the US and closes on Friday afternoon. In this article, you will get to know how to choose a Forex broker.
If you are ready to start the trading journey through Forex, you need to be careful. The best way to start with Forex by getting help from a broker. Well, there are thousands of forex brokers and it’ll hard for a newbie.
This is why you need to follow some considering factors to choose the right broker. In this article, you will know how to choose a forex broker. Let’s find out.
- Regulatory Compliance
The first thing you need to check while choosing a forex broker is their reputation in the industry. For example, a well-know forex broker in the United States can be a member of National Futures Association. This organization can operate commodity futures in the US cause it’s under the Commodity Futures Trading Commission.
If you are checking a flashy website, it will not show that a broker is a member of NFA or under CFTC regulation. You have to check the ‘About Us’ page. For other countries, there are various regulations.
2. The Company Type
Anoter essential factor you need to consider is the company type. There are various companies including dealers, brokers, and ECN brokerages. Most brokers charge fees and this depends on the company they are associated with.
Market makers are always communicating with global banks, so they can keep forex operations under control. It will help if there’s high risks. When you are comparing various companies, you will know more information about this. So, we will suggest to dig deeper on comparing companies before choosing a broker.
3. Trading Platform
One of the most essential factors you have to consider while choosing an ideal forex broker is trading platform. In simple words, a trading platform is especially designed for investors. So, as a trader, you need to make sure that the broker’s platform comes with fundamental analysis tools.
Also, you have to check if a trader can easily enter and exit the platform easily. An ideal trading platform will have a clean and easy interface with simple buying and selling buttons. So, every beginner can find it useful.
4. Additional Features
To choose a trading platform you need to look for some additional features that the platform is providing. Let’s find out some necessary features you need to for:
- A wide range of technical indicators
- Comes with one-click trading
- A risk management tool for reducing risks
These are the basic additional feature that you need to check before choosing a forex broker. However, features depend on personal choice a lot. You can get your suitable platform by using the demo account that is provided by official sites. If a broker is not offering a demo account, they are not good enough.
5. Trade Execution Policy
You will find some brokers who offer a high level of leverage. If you are a beginner, you can get attracted by their aggressive strategies. However, a high level of leverage is only suitable for experienced traders.
High leverage offers can be very beneficial. However, if a trader doesn’t want to take high risks, he/she can go for moderate leverage offers. You can also look for fixed leverage brokers. Another crucial factor you need to check how brokers are performing during weekends.
6. Currency Pairs Offered
You should know there are various deals of currencies available. However, only a few of them are effective and get the most attention. It happens because of trading with great liquidity. So, while choosing the right broker, we need to consider the currency pairs offered.
Some of the major currency pairs are EUR/USD, USD/JPY, and GBP/USD. When you are selecting a broker, you will get a huge list of forex currency pairs. However, the key factor is if they are offering currency pairs that you like.
7. Quality of Customer Support
Last but not the least, quality of customer support is one of the crucial factors. As we noted before, forex is available for 24/6. So, you have to check if you are getting top-notch customer service with your broker.
An ideal broker should include 24×7 live support, phone calls, and more. A quick phone call can give you a lot of information. On the other hand, your broker’s website should be simple enough, so you can get an idea of forex.
Getting help from a forex broker can be very beneficial for your trading journey. Finally, you know how to choose a forex broker. Make sure you are implementing these tips. Plus, you need to know the basics about forex before you choose a broker. For more detailed information, you can start your research.