Forex trading market is one of the largest growing global markets in the entire world. With the immense growth, the competition in the market is getting higher day by day. The increase in the competitive atmosphere of the retail forex market will only give you a major headache. Choosing the right forex broker is a super daunting task.
Choosing the perfect and the best forex broker is really not easy. This usually happens when you don’t have a clear idea about what you need exactly. The forex market operates 24*5. The market opens on Sunday afternoon in the United States. The volume of the trading currency in the market is enormous. On average the forex trading involves transactions of around $5 trillion per day. The amount is larger than the world’s bond or the stock market.
The forex brokers hold your money in an account that changes the value of that certain amount drastically in a short period of time. The brokers tend to handle all the transactions, withdrawal requests, market trends, and commission too. Some brokers also hide the commission and fee schedules within legal jargon. So to protect you from such unwanted surprises and false brokers we are here to help you and guide here for “how to select the best forex traders. Click here for more details.
5 Best Tips For Selecting the best Forex broker
Mentioned below are the 5 best factors that you need to consider each time before you select the forex broker or your trading and transactions.
1. Regulatory compliance
A reputable forex broker in the united states should be a member of the national futures association (NFA) and will be registered with the U.S. commodity futures trading commission (CFTC). With these designations, a forex broker is considered as a professional retail foreign exchange dealer. These authorities develop rules, programs, and services to protect the integrity of the market. The forex brokers need to strictly abide by these rules.
A professional looking website does not guarantee whether the broker you are going to hire is an NFA number or under CFTC regulations. You will get this info in the about us section of the webpage. So make sure your broker is one of the certified NFA or CFTC members.
2. Customer Service
As the forex market tends to be operated 24*6. You need to make sure that your broker is available all the time for customer support. Constant responsiveness of the forex broker is very important to make correct and effective decisions for your transactions. Another consideration here is that you should be able to communicate with your broker effectively and easily.
To check for the type of customer service your broker provides you with, a quick call can give you a complete idea regarding the wait time, and the representative or the broker’s ability to answer the queries precisely.
3. Account details
Each forex broker has different account offerings which include the details like:
- Leverage and margins: Every forex participant has the access to a variety of leverage amounts. This leverage amount depends on the broker. Basically, these leverages are the loans extended to a margin account. The ratios can vary from 50: to 200:1.
- Initial deposits: Usually, the forex accounts can be funded with minimum initial deposits. This amount can be even less than $50. Therefore, each broker offers standard mini and micro accounts with varying initial deposits.
- Ease of deposits and withdrawals: It is very important that your broker should provide you with ease of withdrawals and deposits. Some brokers allow the holders to fund an account with online methods. These brokers may charge a fee for such a service too.
4. Currency pairs offered
There is a wide range of currency pairs available for trading. Some of the popular trading pairs are us dollars/ Japanese yen, us dollar/ Swiss franc. It is a fact that only a few of the currency pairs get major attention and hence they trade with the highest liquidity. The broker should be able to provide the account holder with the currency pair in which the investor is interested. That is the most important point to consider and to check whether your broker can provide you with a precise currency pair according to your interest or not.
5. Trading platform
The trading platform is the investors portal that he uses to make all his tracking and transactions. The interface of the trading platform should be easy to use and navigate. The traders should also focus on making the platforms visually appealing with a variety of technical and fundamental tools for analysis.
A well-designed trading platform has proper buy and sells buttons. Some trading platforms even come with “panic” buttons too. The panic button closes all the open positions.
On the other hand, a poorly designed interface will have technical issues. The most common is the entry mistake, as you might accidentally add it to a position rather than closing it.
How do brokers make money?
In simple words, the brokers make money by three types of the different trading costs they imply on the investors.
- Fixed spread: this is the fixed amount of the spread, where you know the spread amount before the trade.
- Floating spread: This type of spread is always fluctuating. The amount basically depends on the availability of market volatility.
- Commission fee: commission fee has calculated as a percentage of the broker’s spread. The trader should be aware of the commission prior to the trade.
Here are the most important tips and the qualities you need to check-in for before you hire a forex broker. It may be a little overwhelming task, but with this ultimate guide you can easily figure out which broker suits your needs. Once you find the best broker, you can start working more and focus on your trading activities. The right selection will provide you with immense growth in your successful trading market.