Tips for Finding an Excellent Forex Broker
While there is certainly a lot you need to learn when trading in the currency market, choosing a forex broker is actually the biggest trade you have to make. After all, you are handing your capital to them, expecting that you will be able to trade in the forex market and withdraw when you have made profits. You can have the best forex trading strategies, but if your broker is unreliable and runs off with your money, all your research and hard work will go down the drain. Therefore, it is vital that you find an excellent forex broker. How do you do that? Here are some tips that can help:
- Consider your needs
Before you start looking for a forex broker, it is a good idea to consider your own needs. Will you be trading daily, or every now and then? Do you intend to make small moves, or are you interested in capturing the bigger market movements? If you want to trade frequently, but focus on small moves, an ECN broker would be a good fit. Similarly, consider how much capital you want to invest and if the broker offers a suitable lot size.
- Think about the broker’s offerings
Now that you have decided what you are looking for, you can begin sorting through the options in the market and narrow the list of potential brokers. You need to ensure that you are only considering brokers that are properly regulated by a renowned organization. For instance, you should opt for brokers that are regulated by Australian, UK, Canadian, US, New Zealand or Japanese authorities.
You also need to pay attention to the spreads they will charge because these will have a direct impact on the profits you can make. Similarly, you should prioritize a broker that’s available when you need them. They should offer you a demo account and you should also test their customer service. If they are not responsive and quick, you need to steer clear of them.
- Be wary of the reviews
When you are searching for a broker and doing your homework, it will also involve looking at the reviews that traders have left for them. However, you need to be wary of the reviews and only trust them if they come from a credible source. In this age of the internet, it is easy to come up with fake reviews and get them published on multiple websites.
These can be very misleading and convince people into signing up with scams and frauds. Furthermore, you shouldn’t trust all negative reviews either because sometimes traders make mistakes and then blame it on the broker. You should take a look at what people are saving, but don’t lose your objectivity.
- Test the broker
Before you make your final decision, you should test the brokers you are considering. Every reliable broker out there will give you the option of opening a demo account that you can use for testing their trading conditions and trading platform. This is the perfect opportunity to determine if the broker is able to live up to all the promises and claims they have made on their website. Take some time when using the demo account and even when you switch to a live one, take things slow. During this time, you should continue the testing process by evaluating their customer support and checking their payment methods and procedures.
If, after all of this, everything continues to work smoothly and you don’t have to deal with a lot of hiccups, you can choose to deposit the rest of your capital and begin trading fully.
- Steer clear of bonuses
When you are opening a live account with a broker, it is best for you to avoid any ‘bonuses’ that may be offered to you at this point. These come with conditions that can make withdrawals difficult and you want to avoid this at all costs.