5 Basic Ways to Choose your Forex Broker
If you’re thinking about forex trading, there are some methods for you to use when selecting the forex broker.
Without any further ado, let’s take a look at the most important ones:
- The easy way
You only go through the broker reviews and make an idea about the forex broker. Even so, a 5-star forex broker may not always be the best choice for your needs. There’s still the slight chance that the reviews aren’t genuine.
- The right way
As forex trading is serious business, you should select your forex broker meticulously so that you don’t end up with a lemon.
Here are the steps to take:
- What do you want to achieve with forex trading?
It’s important that you come up with the list of features you want from your forex trading. We’ve listed the most common questions that you should answer to:
- Which type of
spreads do you want? (variable/fixed)
- Which currency pair will you trade?
- What type of leverage do you want?
- Would you like to pay a commission for forex trading?
- Is the reputation of the forex broker vital to you?
- Which way do you want to use for getting/sending funds?
Once it’s clear to you what you want to obtain from your forex trading, it’s going to be a lot easier to select the forex broker.
- Find out the right broker
Use the search engines, go online and check as many broker sites as you can. For instance, if you plan to go with MT4 Forex brokers, you can go at fxdailyreport.com and gather all the information you need for selecting the MT4 forex broker. Either way, you can also go through the reviews, the comparisons provided by the site and make a clear image on forex trading altogether.
- Go to the broker’s website
Let’s imagine that you’ve succeeded to narrow down your choices. Visiting the site of the forex broker is going to help you complete the image. You get to see the trading rules, policies, terms, and conditions. You also make an idea about the transparency of the forex broker.
When a forex broker doesn’t provide a physical address on the website on its contact page (anywhere visible, anyway), you should stay away from them and look elsewhere. No phones, chats, emails are going to count when there is no address whatsoever.
How the website looks like should also give you a sense about the forex broker. It’s not that it has to be modern or highly interactive, but it should look professional. All links and pages have to function and no “Coming soon” message is acceptable. Truth be told, “Coming soon” actually means weeks and even years.
It’s also wise of you to open an account with a Regulated broker. Some authorities provide the registration of brokers, and you want yours to be regulated.
- Carefully read the reviews about the forex brokers
Always check various sources on the forex broker of your choice. Read the reviews and see as many links as you can.
In all fairness, when you read too many reviews, you may quickly get confused and find yourself overwhelmed with the information.
Here are some rules to keep in mind:
- A forex broker that has a decade of experience must be doing something right. It may take good care of the clients and run the forex trading like no other competitor. Either way, it knows that’s forex trading all about.
- It’s a good thing when the forex broker is providing more than just a trading product. It means that it’s running a large business and has numerous clients.
- Any broker that is regulated by the most relevant regulatory authority in its country of origin is respectable. A respected broker is always trying to play by the rules and to follow the regulations established by the authority bodies.
- Look for the denied withdrawals and the canceled profits. They’re always a red flag, and you should be your search all over again.
It’s also important to tell the difference between the good and the bad news. Who wrote the review also matters: was it a professional or an entry-level trader? It’s not that you can tell the level of education of the person who wrote the review; however, the way the review looks like sure says you a lot about their level of competency.
Another trick to try is only to check the 5star reviews at some point. It’s not impossible for the brokers to submit their reviews so that they increase the ranking.
It’s not that difficult to identify this type of reviews. Sometimes the promotional message within the review is undeniable, whereas sometimes it’s a bit more subtle. Try to stay as objective as you can and stay focus on what you’re trying to achieve.
- Stay on track
Selecting your forex broker resembles selecting your bank: reputation, easiness of running the money operations, transparency, active customer support.
One last thought before you go
There is news in terms of trading conditions, and some Forex brokers may have skipped this part. It’s fundamental that you go over the Client Agreement and read it. We know it’s a lot easier and pretty tempting to go and check the “I agree” box in front of Terms and Conditions. No matter how busy you are, always find the time to get over the Client Agreement carefully.
Even if Forex trading is attractive and exciting, you shouldn’t start doing it until you go over the crucial information. It involves account monitoring, money management, risks that you should be aware of. Go online and find out about the demo accounts as respected Forex brokers always provide. Demo accounts are fantastic as they help you practice and learn about forex trading. And once you’re good at demo trading, the chances are you’re also going to do it in real forex trading, with real money.