How to Choose a Forex Broker

It’s necessary to find a reliable forex broker, but the act of choosing is a very difficult task. With a lot of choices out there, how would you make sure that you picked out the right one?

Use this guide to narrow your choices down.

Do Your Research

There’s a wide range of choices of brokers that will help you in your trading activities. There are a lot of things you should consider though.

Check the regulatory compliance. If the broker is reputable and reliable, then they’d be a member of the National Futures Association (NFA). Not only that, they should also be registered with Commodity Futures Trading Commission (CFTC).

• NFA – a self-regulatory commission in the US. They develop programs and rules that will protect the market’s integrity. They also help members meet the required responsibilities.
• CFTC – an independent agency that regulates US commodity options and futures markets. Their mission is to protect the users from manipulation, fraud and abusive practices related to selling commodities as well as financial futures and options; they also foster competitive, open markets that are sound financially.

You’d like to make sure that your deposits are safe, and your broker has integrity, and so you should only do accounts with duly regulated firms.

Every forex broker has their own account offerings.

• Commissions / spreads

1. A broker will make money by their commissions and spreads. If a broker works on commissions, then they may charge a spread’s particular percentage, the bid’s difference and the forex pair’s ask price.
2. A broker may tell you they don’t charge any commission, but will instead make money through wider spreads. Take note, though, that the wider the spread, the harder it will be to have some profit.

• Initial Deposit
  

1. Usually, forex accounts don’t need such a huge capital. Using leverage, the purchasing power is higher than the minimum deposit which makes trading in forex attractive to investors and traders. Brokers can offer three accounts: standard, mini and micro, with varying deposit requirements.

Check their Customer Service Options

Forex trading can take place anytime, so make sure they have a support platform available anytime too. Preferably, there should be the ease of talking to a live person rather than an automated attendant which could be frustrating.

Offered Currency Pairs

A broker will have a wide range of pairs to choose from, but make sure that they will have the pair that interests you the most. Great deals of currencies are available but only a few has the majority’s attention, and so, they trade with the greatest liquidity.

Forex Platforms

The platforms will be your portal to the forex markets; therefore, you should choose a platform that won’t give you a hard time. Your first few days in forex is struggle enough; don’t add to your grief by choosing a platform that you can’t navigate with ease.