The retail forex market is so competitive that just thinking about having to sift through all the available brokers can give you a major headache.
Choosing which forex broker to trade with can be a very overwhelming task especially if you dont know what you should be looking for.
In this section, we will discuss the qualities you should look for when picking a forex broker.
Fortunately, checking the credibility of a forex broker isnt very hard. There areregulatory agenciesall over the world that separate the trustworthy from the fraudulent.
Below is a list of countries with their corresponding regulatory bodies:
National Futures Association (NFA) and Commodity Futures Trading Commission (CFTC)
Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA)
Australian Securities and Investment Commission (ASIC)
Bundesanstalt fr Finanzdienstleistungsaufsicht (BaFIN)
Investment Information Regulatory Organization of Canada (IIROC)
Before even THINKING of putting your money in a broker, make sure that the broker is a member of the regulatory bodies mentioned above.
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 thespread or a commissionso 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. Its 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 fills you at the best possible price for your orders.
Under normal market conditions (e.g. normalliquidity, noimportant news releasesor 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 youre a scalper.
A few pips difference in price can make that much harder on you to win that trade.
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.
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