One of the most important questions you would have to ask yourself before getting into trading and before you make your first trade, is “who do you want to trade with? ” This is an important step every trader needs to take when it comes to forex trading.
The Forex broker you decide to do business with will have an impact on your successful trades and your unsuccessful trades as a forex trader. It’s important you explore all the possible options on who to do business with.
There are some key points that could guide you through how to select a reliable trade broker to do business with.
This key point is one of the most important of all. The Forex broker you choose to work with must show a proof of regulation. When you choose otherwise and go ahead with an unregulated broker, there are bigger risks involved such as when a trade goes wrong or fraud and you’re unsure of what to do or who to turn to assist you with such problems . With an unregulated broker, you are most likely left to face the risks involved on your own.
It’s also important to know in which country your broker is located and if they are regulated in the country, as not all countries have the same regulatory environment and requirement.
Is the broker’s trading platform dependable?
A passionate trader always makes sure the platform the broker offers is reliable and dependable and does not crash down often when key global economic events or crises takes place. Stability of a trading platform is one of the major keys to successful trading.
There are some traders that are not cautious about the stability of their platform and don’t pay attention to the market frequently. This could be disruptive and an unpleasant experience while trading.
In addition, another thing a successful forex trader could take into consideration are the charts, technical tools and the type of software you use. A well-designed, user-friendly platform will have all the key elements for you to trade with.
In the Forex market, it’s important to find out if the broker has a support service. The broker should be able to offer support whenever you feel stuck and you should be able to contact your broker anytime of the day, as the forex market is a 24-hour market.
Is the broker offering any added-value?
The Forex market is a 24-hour market that constantly needs supervising and as a trader, you would need constant updates through charts ,news ,economic data’s and anything that could benefit you .
Some brokers offer some of these assistance and add-value services as part of their packages, which would benefit the trader.
Forex broker with sufficient leverage
Trading with a forex broker that offers high leverage could increase your chances of winning trades with potential profit. This could also increase the risk level involved. Leverage in forex trading is the ratio the amount of margin (capital) you provide to take a trade and the value of the contract you trade.
Traders find leverage levels very important when selecting a suitable broker to trade with.
Fees, Commission & Spreads
Some brokers earn profits through commissions and spreads, which may involve some additional charges when you trade. Some may charge a flat-rate trading commission, while some would just simply mark up the spread.
There are three main commission structures forex brokers use, which are the fixed spread, variable spread and the commission which may be charge based on a percentage of the spread.