If you have finally decided to start trading on the Forex market but don’t know how to start, here is the first step: picking up the right broker. A Forex broker is a financial intermediary that allows clients to place their orders on the Forex market via their trading account. A trustable Forex broker is a licensed entity because it must have a license and operate under the supervision of competent financial authorities to be active in this field. To choose the right broker, traders can take into account several aspects. Here there are.
The trustful and good broker must operate in compliance with strict regulations. This factor is crucial. The broker must be approved and appears on the list of suppliers approved by the financial authority body. A regulated brokerage company shields you from an unpleasant surprise. If you stumble upon a scam, you risk losing your money, or at some point, you won’t be able any longer withdraw your money from the trading account.
Security of your funds is a mandatory factor. Therefore, traders should check that the Forex broker they are considering disposing of segregated accounts. It means that the accounts of the broker as a business entity are divided from the traders’ accounts – so in the event of financial problems, the customer accounts are not affected) and opened in a prestigious banking institution.
3. Spreads and commissions
It is obligatory to check the spread of the trading instruments, the commissions, the swap, and the quality of execution. Of course, going for the broker with the lowest spread is tempting, but keep in mind that the average spread is not always guaranteed when you have market orders.
4. Access to trading education
It is very important, especially if you are a beginner, that your Forex broker gives access to appropriate training. It includes Courses, study resources, webinars, seminars. First of all, clients should have a solid theoretical background. Traders also need to learn specialized trading jargon, the most used indicators, the types of successful trading strategies, etc. Additionally, having access to periodic webinars with market analysis or seminars where successful traders outline their trading methods and strategies can be helpful in improving trading performance.
5. Account types
Traders have the choice between a Forex broker with a dealing desk or without a dealing desk. Therefore, they can choose an ECN, No Dealing Desk, or STP broker depending on the desired strategy.
The broker should provide its clients with the types of accounts they need or want: ECN, STP accounts, or offer them discounts or bonuses for large deposits.
6. Access to other financial markets
It is desirable to have access to as many markets as possible in order to be able to choose and identify as many trading opportunities as possible. You have to check whether the broker you are studying has access to stock market indices, commodities, stocks, cryptocurrencies, ETFs, bonds, etc.
It’s advisable to open up to three demo accounts on different platforms. This way, you can test trading on the instruments that interest you using the desired trading style. Then you choose the broker you find the most convenient.