Have you been thinking about becoming a forex trader? Whether you are just getting started with forex trading or you want to become a professional, one thing’s for sure: you need a good forex broker. You may notice that when you look for such brokers online, you are greeted with hundreds of results. So, it’s not that simple to choose one over another.
There are some things to consider in order to find a forex broker that you can trust. There are many brokers that would like to win you over, but not all of them are suitable for you. That being said, here are 8 things you should pay attention to when choosing a forex broker.
1. Currency Pairs
Each trader will have his or her own preferences in terms of currency pairs. If you know the currency pair you want to trade with, then you must look for a broker that features that pair in their selection.
Now, despite the wide range of currency pairs, some pairs get more traction than others. As a result, their liquidity is better.
Some of the largest currency pairs include GBP/USD, EUR/USD, USD/CHF, and USD/JPY. So, make sure your broker of choice has these options.
2. Methods of Deposit and Withdrawal
As a forex trader using a broker, you need to fund your account and, later, withdraw different amounts. To make this possible, each broker offers different deposit and withdrawal methods. You need to make sure you find a broker that offers a deposit or withdrawal option you are familiar with.
Most of the time, brokers will offer credit and debit card deposits and withdrawals. However, on top of this, they might also offer Skrill, PayPal, and Bank Wire transfers.
Check how you will be able to fund your account and take money out if you were to choose a certain broker. Pay attention to other aspects as well. This includes whether there is any minimum deposit amount and if there are any requirements for withdrawals. The more deposit and withdrawal methods you have, the better.
Regulation is a fundamental aspect that not everyone keeps in mind when choosing a forex broker. Without good regulation, a forex broker is a red flag. If something were to happen to the business, it could end up with you losing your money. Depending on where you live, you might have easier access to regulated forex brokers compared to other places.
When a forex broker has all the papers in order, it will keep your money safe. At the same time, proper regulation ensures the broker is capitalized in case of any trading loss. So, you should always make sure you choose a safe and regulated broker.
4. Good Customer Service
Forex brokers with bad customer service are a no-no. You might encounter problems from time to time and have questions that need answers. So, you need to have someone who can answer your questions. Besides, you’ll be able to trade 24/7 with most high-quality brokers. Therefore, customer service should be available at all times for the best experience.
Good customer service should give you different contact options, such as email, phone, and live chat. At the same time, it will be quick in responding to any questions or issues you might address. You can test the customer service yourself by reaching out with questions before signing up. Also, you can check out the reviews of the broker and see whether people had any complaints about the customer service.
5. Trading Platform
You will also need a good trading platform for a smooth experience. So, this is another crucial aspect you should keep in mind when choosing a broker. A trading platform is how you can gain access to the markets. For this reason, you should make sure that the forex broker offers a suitable platform that has everything you need.
Some brokers offer the MetaTrader 4 platform, which is pretty much the standard in the industry. This platform is good and easy to use, even for newer traders. But don’t hesitate to check out whether a broker offers MetaTrader 5 as well or a different platform.
6. Different Types of Accounts
Even as a beginner in forex trading, you must think of the type of account you want to open. Any top broker will have multiple forex account types available. This way, customers can settle for the best one based on their trading style and preferences.
Now, each broker is unique and will name its account types differently, but for the most part, account types come in versions such as mini account, standard account, VIP account, and so on. Each account has its own requirements with different minimum deposits and withdrawals.
If you already have specific requirements in terms of trading, make sure the broker you go for also offers an account type that suits you.
When you are getting started as a forex trader, it’s good to have resources that can help you learn and grow, and slowly turn into a pro trader. Some brokers offer educational resources meant to help beginner traders as they are starting their forex journey.
Each broker offers various kinds of educational content, including e-books, blogs, webinars, seminars, and so on. So, it would be great if you could choose a trader that provides quality trading education.
8. Trading Costs
Another thing you should check when you choose a broker is the cost of trading. Any broker will have its own costs for trading, and you might notice that high-quality ones generally involve higher prices.
At the same time, you can find forex brokers with more affordable costs that still provide good services. Look carefully for such brokers, but make sure you do not sacrifice quality for lower costs.
The Bottom Line
Finding a forex broker doesn’t have to be difficult. Consider the factors above and take your time looking for the best broker. Last, but not least, always make sure you check the reviews of previous customers. They’re a good indicator of a broker’s quality.