Tips for Choosing a Forex Broker
Tips for Choosing a Forex Broker
Tips for Choosing a Forex Broker is very important for you to determine success in trading. The foreign exchange market accounts for more than $ 4 trillion in average trade value every day making it the largest financial market in the world. Because there is no central market for the forex market, traders must choose a forex broker to help them carry out trading activities. There are many forex brokers there and choosing the right broker is not easy. Here are some tips to help you choose a forex broker:
BROKERS WHO ARE COMPLIANT WITH THE RULES
In the US, a leading forex broker will become a member of the National Futures Association (NFA) and will be registered with the US Commodity Futures Trading Commission (CFTC) as a member of the Futures Commission and Retail Foreign Exchange Dealer. The NFA is a broad industry, regulatory organization for the future industry in the United States. This organization develops rules, programs and services to protect market integrity, trad
ers and investors to help members fulfill regulatory responsibilities. Whereas CTFC is an independent government agency that regulates commodities and future markets in the United States.
A professional search website does not guarantee that the broker is a member of NFA or under CFTC regulation. A broker who is a member of the NFA and is subject to the CFTC rules will state this and the NFA membership number on the site which is usually placed on the “about us” menu. Every country outside the US has its own regulatory body.
FOREX BROKER ACCOUNT DETAILS
Each forex broker has a different account offer, including:
Leverage and Margin: Forex participants have access to various leverage amounts that depend on the broker, such as 50: 1 or 200: 1. Leverage here is a loan extended to margin account holders by their broker. However, leverage can quickly destroy a trader’s account because of the huge potential losses.
Commissions and Spreads: Brokers get money from commissions and spreads. A broker who uses a commission can charge a certain percentage of the spread.But the fact is that many brokers advertise that they charge fees without commissions and instead they will make money from wider spreads.
Initial Deposit: The majority of forex accounts can be funded with a very small initial deposit (can reach $ 50). Many brokers offer standard, mini and micro accounts with various initial deposit requirements.
Ease of Deposit and Withdrawal: Each forex broker has a specific account and fund withdrawal policy. Brokers allow account holders to fund online accounts with credit cards, ACH payments, PayPal or bank transfers and checks.Withdrawals can usually be made by check or transfer.
OFFERED CURRENCY PAIRS
Although there are many currencies available for trading, only a few are getting a lot of attention, and therefore trading with the greatest liquidity. The majority are US / Japanese Yen (USD / JPY), Euro / US dollar (EUR / USD), Swiss / Swiss Franch (USD / CHF) and British pound / US dollar (GBP / USD). A broker might offer a large choice of this currency pair, but what is most important is they offer a partner that a trader or investor wants.
Forex trading takes place 24 hours a day, so broker customer service must be available at all times. Another consideration is the ease of service by the original customer service rather than the automatic answering machine … when considering a broker, speed dial can give you the opportunity to see the customer service they provide, waiting time and the ability of the broker’s representative to answer the questions correctly must also be considered. Also consider also how long they have become a forex broker and how big their trading volume is.
TIPS FOR CHOOSING A FOREX BROKER – TRADING PLATFORM
Trading platforms are portals of investors to the market, which is why traders must ensure that platforms and software are easy to use, have a pleasant appearance, have a variety of technical or fundamental analysis tools and trading can easily enter and exit. This last point is very important because a well-designed trading platform will have a clear “buy” and “sell” button. There are even some platforms that add a “panic” button to close all open positions.
The majority of brokers will offer free demo accounts so traders can try the trading platform before opening and funding the account. Tips on choosing a forex broker are very useful for you.