How to choose a Forex broker
The currency market (or Forex market), in which individuals buy, sell and trade with a wide variety of currencies, is considered the largest and most liquid financial market in the world, and houses an average volume of operations over 4 trillion USD per day. Anyone interested in online currency trading should select a Forex broker in order to facilitate their online operations since there is no central market for this activity. During the last few years, there has been a great growth in the number of online FX brokers, each with its own personal parameters. To operate Forex successfully, you must make sure that the broker you select is the one that best suits your needs and your way of operating.So, from Investing-Deals.com we want to inform you about the five most important factors to consider before choosing your online broker:
1) Regulation and segregation of funds:
The regulations are one of the main aspects to consider when choosing a Forex broker.
Having adequate regulations backed by a reliable government agency is essential. It is advisable to ensure that the brokerage company with which you work is sufficiently capitalized in the case of having to operate at a loss. It is also good to check that the funds of the clients are totally segregated: in other words, the operating and trading capital of the company is adequately separated from the client's funds.
The regulations may differ from one regulatory agency to another depending on the country so that brokers that provide services in more than one country are often registered with more than one regulatory agency. In the previous comparison table, you can check with which regulators each brokerage company is registered. This information can also always be verified on the regulator's website.
It is always strongly recommended to select a properly regulated Forex broker to benefit from the important protection measures mentioned above.
2) Commissions and spreads
The so-called spread is the difference between the purchase and sale prices of any pair of currencies and is considered as the commission that a broker can charge the client in each transaction executed.
The spread of any currency pair can be fixed (for example, 3 pips) or dynamic (floating), which means that it will depend on the volatility of the market.
Observe the following example: A given broker indicates a selling price of 1.12257 and a purchase price of 1.12260 for the EUR / USD pair. Obviously, this quote has a spread of 3 pips.
As seen in the forex comparison table of Forex brokers, each broker offers a different differential for the mentioned pairs. Keep in mind that wide spreads make it difficult for the client to obtain benefits. Remember to keep that in mind when choosing your broker to operate in the Forex market.
3) First deposit
Experiencing your first Forex operation or trying out a new broker does not mean you have to deposit large amounts of funds. Most Forex brokerage companies allow you to open a REAL trading account with a small initial deposit of 50 USD or more.
4) Trading platform
The trading platform is its interface to Forex trading activity. It is important that the broker with whom you decide to open an account has a trading platform with which you feel comfortable.
All Forex brokers offer demo accounts, which allows you to experience your trading platform in order to check if it covers all your trading needs.
Do not hesitate to try several trading platforms before choosing your broker and register to obtain a real Forex trading account.
5) Customer service
The foreign exchange market is available 24 hours a day, 6 days a week, so the technical service must be available within a reasonable time, based on the above criteria. Most Forex brokers offer assistance in several languages by phone and chat.
Good customer service will help you open an account and speed up your learning process. If you are new to the world of Forex trading, do not compromise on this aspect. It can be a crucial factor when it comes to mastering the functioning of the Forex market.
conclusion
Selecting a broker that is right for you can increase your chances of success in the Forex / FX market.
Consider the various factors mentioned above and select the Forex broker that best covers your needs and your way of operating.
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