6 Factors when choosing a reliable forex broker
Competition in the forex industry is so high that even the task of having to go through all brokers in the search of the best one can cause you a headache – there are so many of them. The first thing you ask yourself is how to choose a good forex broker to trade? This problem can really dumbfound some, especially those who do not know what to look for. In this section, we will tell you 6 of the most important factors that you will need to follow and pay attention when choosing a broker.
1. Reliability
You are not going to give thousands of dollars to someone who just tells you that they operate legally, right? When choosing a forex broker, in the first place you should make sure it is responsible for the safety of your funds. Fortunately, checking the reliability of a broker is easy. As such, choosing a forex broker is not that difficult. Worldwide, there is number regulatory bodies that separate decent from the scam brokers. Here’s the list:
USA: National Futures Association (NFA) and Commodity Futures Trading Commission (CFTC)
United Kingdom: Financial Conduct Authority (FCA)
Australia: Australian Securities and Investment Commission (ASIC)
Switzerland: Swiss Federal Banking Commission (SFBC)
Germany: Bundesanstalt für Finanzdienstleistungsaufsicht (BaFIN)
France: Autorité des Marchés Financiers (AMF)
Cyprus: Cyprus Securities and Exchange Commission (CySEC)
Before you even think about joining a particular broker, make sure that it is a member of one of these organizations.
2. The price of the transaction
No matter what kind of trader you are, you still have to pay the price of the transaction, whether you like it or not. Every time you enter a bid, you have to either pay for a spread, or pay a commission. Consider whether your type of trading requires tight spreads or commission-based trading, and explore the available options if needed. The main thing here is to find a balance between the reliability of broker and how much is it worth their charge.
3. Depositing and withdrawing funds
Good brokers will allow you to easily deposit money into the account and withdraw it from the account. They do not need to complicate these procedures, since they keep your money just to help you in trading. They will not create problems for you if you suddenly decide to take your profits. Make sure withdrawing money from the account can be quickly and easily. You can consider depositing a smaller amount in order to test the broker reliability.
4. Trading Platform
Most of the action in online trading is carried out through the trading platform. This means that the trading platform of your broker should be reliable and have a clear and user-friendly interface. When choosing a broker always pay attention to the trading platform: is there news feed? what tools and charts are being offered? Does it show all the information you need?
5. Execution of orders
Your broker should fulfill your orders at the best available market prices. This is a must!
Under normal market conditions (normal liquidity, no significant news or unexpected changes) broker should executes your order at the price, which you can see by clicking on the “sell” or “buy” button. He has no reason to do otherwise.
For example, you have a stable internet connection. If you click “Buy» EUR / USD at 1.12000, you will buy it at that price or a couple of points different. The execution speed of the order is very important, especially for scalpers. The difference of a few points may greatly affect your profits.
6. Customer Support
Brokers are not perfect, so you should choose a forex broker that will be easy to contact if any problems arise. The quality of their support team is just as important as all the other factors listed in this article. Many brokers are attentive to you when you open an account, but their customer support is terrible. Make sure you check their live chat before opening an account.