In search of a seamless trading startup, private forex investors must choose a good forex broker. But what constitutes a good forex broker?
Given that forex investment entails a lot of risks, potential forex investors must know that choosing a good forex broker is imperative to help them turn into successful forex traders. But being new to the forex world, private investors might have a hard time choosing a forex broker, especially that they don’t know what they should be looking for.
So here’s a guide for novice traders on how to choose a broker in forex.
How to choose a forex broker for forex trading
To help forex traders have a head start to online trading, let us lay down essential qualities and considerations on choosing a forex broker. Non-negotiable traits of a forex broker are listed down to must-haves while negotiable conditions fall under nice-to-haves.
Must-haves
- A member of the regulatory bodies for forex trading – to trade forex, the investor must secure an initial deposit to the forex broker. When choosing a forex broker, take time to know if the forex broker you initially preferred is a member of any regulatory bodies in the different parts of the world. Running to a non-member forex broker means handing your money to an unsanctioned broker who might be imposing their own rules and regulations in forex trading that might cost you your entire investment.
- Offers a standard set of transaction costs – forex brokers’ services are not for free. So investors must compare transaction costs of different brokers to check whether the broker the investor is eyeing offers reasonable transaction costs or relatively higher. The spread price list must be the first thing an investor should scrutinize when determining costs.
- Offers customers a get-at-able cash account – trading income is what traders aim for, so withdrawing funds from cash accounts must be convenient for the account users. Imposing a handful of rules and guidelines before being able to withdraw what is due the customer is something that should be carefully looked into by investors. Fraudulent brokers usually have shady schemes in withdrawing cash balances.
After knowing the must-haves or the primary considerations in choosing a good forex broker, it will be better if the above qualifications will be complemented by nice-to-have qualities of a good forex broker. So here are the other negotiable, yet all-important considerations in choosing a forex broker.
Nice-to-haves
- Popular or advanced trading platforms – Since there are a lot of forex brokers ready to serve traders in the forex world, competitive trading platforms are what they usually flaunt to forex investors. To find out if the broker offers popular trading platforms, check its connectivity (if it’s available in any browser), charting tools (if they are updated 24/7), and other unique offerings and promos for fist-time account users.
- Executes right trading conditions – good forex brokers must be filling traders the best prices for orders during trading. The trading price must be, as much as possible, closest to the market price. (Unless forex brokers hold pricing reservations for some reason.) Just remember that even the slightest difference in price when trading matters a lot, especially if the orders are in bulk.
- High-caliber trading assistance – brokers must, at all times, be ready to serve by being reachable to the customers. Online chat facility, direct landline access, and other possible means to quickly contact brokers in times of need should also be on top of the list of wandering forex investors.
Once the prospect broker has been scrutinized and deemed to possess the must-haves, the addition of the nice-to-haves are of good advantage to gain a seamless trading experience win or lose.