The forex market gives you umpteen opportunities to make money. However, it is quite competitive in nature as well. Selecting a reliable and professional broker is of paramount importance to tread on the path of success as a forex trader. There are certain features of a foreign exchange broker that you must always look for before choosing one. Some of these features have been discussed below:
Security is one of the primary features of a good broker. In the end, it is he who will be dealing with your thousands of dollars. Given below are the names of the regulatory authorities where you can check the integrity of a forex broker:
- Financial Services Authority (FSA): United Kingdom
- Commodity Futures Trading Commission (CFTC) and National Futures Association (NFA): United States
- Swiss Federal Banking Commission (SFBC): Switzerland
- Australian Securities and Investment Commission (ASIC): Australia
- Autorité des Marchés Financiers (AMF): France
- Bundesanstalt für Finanzdienstleistungsaufsicht (BaFIN): Germany
Prior to taking part in any trade, you have to ensure the broker is a member of any of the authorities mentioned above.
#2 Deposit and profit takeout
A dependable broker will always allow you to deposit money and take out your profit without any difficulty. Brokers just keep your money for making the trading process simpler and they don’t have any right to stop you from withdrawing your profits you have acquired. He should also guarantee that the withdrawal method is prompt and hassle-free.
#3 Transaction Expenses
Irrespective of the fact which type of investor you are, you will always have to bear transaction fees whether you prefer it or not. Charges are taken for the commission or the spread. Therefore, it is sensible to search for the most reasonable rates. On certain occasions, you may have to give up affordable transaction costs for a dependable broker. Always try to maintain the right equilibrium between affordable transaction charges and safety.
#4 Forex Trading Platform
You have to carry out your trading activities via an online trading platform which the broker will offer you. It is essential that the platform has to be user-friendly and steady.
Choose a trading platform which comes with the following features:
- Simple-to-understand charts and technical widgets
- Free news feeds
- All the details you require to invest in the right manner
It is always compulsory that the broker gets you the best possible rate for the orders you have placed. If the market situation is normal, for instance there is no issue with liquidity, no major news or fallout that can affect the market, then there is practically no ground for the broker not to attempt to get you the best possible market rate or even close to it while you select the “buy” or “sell” button.
For instance, if it is assumed that your Internet connection is steady, when you choose to “purchase” EUR/USD for 1.30, your broker must fill you at that rate or inside micro-pips of it. The momentum at which the broker is filling your orders is quite crucial, particularly when you are playing the role of a scalper. Even 1-2 pips variation in rate can turn out to be an impediment for you to make gains on that deal.
#6 Customer Service
You will not find a broker who is absolutely ideal. Hence, you need to choose one whom you can communicate with anytime you want or if there is any issue.
The capability of brokers while they are tackling technical assistance problems or account-related concerns is just as crucial as how they perform on carrying out deals. During the initial stage, brokers might be co-operative and friendly, though their “after sales” assistance may not be satisfactory. Going through online forex guides on a regular basis is a good idea.