Looking for a broker? Ok, let`s speak how to choose a good broker and avoid scam. Here goes!
How to Choose a Forex Broker
When I decided to trade on Forex, I started to seek a broker. To tell you the truth, it wasn’t easy. There are so many forex brokers in the market, and I was a little bit confused. I tried to make choice wisely as I didn’t want to become a scam victim.First of all, I started to surf the Internet and gather the information about brokers. Before comparing brokers, I read forums where traders told about their experience. They shared with other forumers criteria they focused on when choosing a broker. Let me just point out, that every trader follows his own criteria. Someone recommends paying attention to the deposit and withdrawal conditions, another one – to the age of company. I also looked through the forex ratings. But such ratings only disoriented me. I understood that not all ratings place objective reviews and information. As practice shows, reviews and ratings are often made-to-order. If you decide to choose broker in such way, check several resources, read a few comments and reviews to form an objective opinion. So, what to look for when choosing the broker?
Things to consider when choosing a broker
The experience and age of the company show its reliability. How to indicate the reputation? You can learn about the broker and its history on the corporate website or via search engines. Just google the name of the company and you’ll get a result. Visit forex resources where you can find out the opinions and comments of real traders. Don’t forget to check negative reviews, complaints and blacklists. You can find lots of interesting things there.
Check whether the broker is regulated or not. Any company that provides financial services should be licensed. The broker’s license is an important document that confirms the professionalism and the right to engage in financial activities. If the company has a license, it means that it meet the highest requirements and standards.
Pay your attention to the spread, minimum deposit requirements, account types, commission, order execution. All that affect on your profits. Check the order execution speed. I think you are familiar with such a phenomenon as slippage*. The time for closing and opening transactions should not exceed one second. In addition, find out if scalping, hedging, autotrading are permitted.
Slippage is the difference between the expected price and the price at which the order is executed. The market price can be either lower or higher than the indicated one. Slippage may occur during high market volatility or due to slow order execution speed.
Check what types of trading platforms are available. It’s cool if the broker offers mobile and web-based versions. I prefer trading on computer, but sometimes I control some transactions via my smartphone. It is convenient when I am on vacation or I can`t sit at the monitor all day long. Pay your attention to the functionality and interface of the trading platform. The trading platform is a tool with which you have to work every day, and such characteristics are very important. Test the trading platform and make sure that everything is clear and it does not freeze. To understand how the trading platform operates, work on demo account.
The broker`s support should work promptly. Forex is a 24-hour market, so check if the broker provides round-the-clock support. While registering or trading, you can have a lot of questions or run into technical problems, so you might need professional advice. The broker`s support is very important in order to resolve trader`s issues or problems promptly. To check the support team, contact them via chat or email. In such way you will test their competence and efficiency. Multilingual support is a big advantage.
The safety of your money depends on the broker`s reliability. When creating Back Office or withdrawing money, each client should pass a verification – the process of confirmation of the identity. Such a procedure is conducted in order to exclude the possibility of access to trader’s funds by third parties. If the broker opens the account to the first comer, it should put you on guard. Furthermore, pay your attention to the address bar. If you see the lock near the URL address, the site has a valid TLS/SSL certificate. This points to the secure connection with the site and nobody will intercept your data. In my opinion, these things are the most important for the right choice.
Advice on how to choose a good broker
And some piece of advice at the end:
- List few brokers that fit your criteria and compare them by these features.
- Make your own forex rating.
- Open demo accounts at several brokers and trade there for some time, so you will be able to select your broker from others.
As for me, I spent a lot of time choosing the broker. Therefore, nowadays I’m working with a good broker. Good luck!