Finding a broker can easily define what your trading experience is going to be like. Because of that, we’ve put together a few tips and suggestions that should point you in the right direction.
Why Does Your Choice of Brokers Matter?
Using a broker means much more than gaining access to the Forex market. While being the gateway to your trading career, these companies can also have a massive impact on your trading experience.
Each broker has its own trading platform which traders use to buy or sell currencies on open markets. Some platforms are better than others. In fact, different platforms are aimed at different types of traders. You’ll find brokers who have optimized their entire system for beginners, while there are those who have aimed their services toward the more experienced traders.
Forex trading is regulated in just about every part of the world. Therefore, all brokers who offer their services need to be certified by the governing regulatory bodies in whatever region of the world the broker is operating in.
Your first job is to make sure that the brokers you’re interested in are regulated. Working with unregulated brokers almost always leads to unfortunate situations where you either end up scammed or you’re not enjoying all of the protections guaranteed by regulated brokers.
Types of Accounts Offered
The next important criteria you need to look at are the available types of trading accounts individual brokers offer. Different types of trading accounts exist to give traders more options in terms of what they can trade, how much leverage they can use, what kind of protection they enjoy, and more.
If you’re a beginner who is still learning the ropes, you’ll most likely want the highest level of protection possible, along with a fixed fee rate. Then again, if you’re a professional who is looking to switch traders, you’ll want more niche options – consider your options and choose a broker who can meet your needs. That’s the only way to get the most out of your Forex trading.
Finding the Right Trading Platform
Before we get to spreads and some of the more advanced features of Forex trading, we have to touch upon trading platforms for a moment. Not all trading platforms are created equal. There’s a matter of how user-friendly a platform is, but also how reliable it is.
There is rarely anything worse than needing to close a position, only for your trading platform to give up on you. Day traders and those who are trying to time pairs multiple times per day can’t work without a reliable platform.
Then there’s flexibility. Can the platform offered by your broker be used on mobile devices, or is it a desktop-only setup? The latter are becoming rarer by the day, however, they’re still the norm for many brokers.
All of these things need to be accounted for when choosing the right broker. If you do most of your trading on the go, using your phone, you won’t have much use for a trading platform that requires desktop access.
Spread is an important metric in the world of Forex trading. It determines how much you’ll pay for each trade you make. Naturally, most traders will look for low spread brokers because that way they can cut down on their expenses. However, low spread brokers often get you elsewhere.
Then again, if you see brokers that have no upfront fees, you can rest assured that they work off of spreads.
Spreads can be dynamic or fixed. Fixed spreads mean that you’ll be paying the same percentage per trade. This works for many traders as they can form long-term plans knowing exactly what their expenses will be.
Dynamic spreads mean that your per-trade fee varies depending on how often you trade and what type of trade you’re making at the moment.
Figuring out which type of spread best works for you is a matter of knowing your trading style. Unfortunately, that’s something you’ll need to experiment with when you first start out. We recommend sticking to fixed spreads for the time being until you get a feel for the market and your own trading appetites.
Big league brokers understand that Forex trading is a time-sensitive game. They also know that their platforms need to have 100% uptime at all times, aside from maintenance. However, that’s not how things always work out.
Using a trading platform means that you’ll most likely run into performance issues at some point. While such situations are extremely rare, they do happen. It is times like these when you’ll default to your broker’s customer support for help.
If your broker has questionable customer support or one with a track record of not solving their customers’ issues, we suggest you find another company to work with. No matter how good their features, bonuses, and other incentives are, the lack of efficient customer support can cost you a lot of money if you ever find yourself between a rock and a hard place.
Good customer support will be able to help you in a timely manner, even if they’re dealing with a massive volume of calls. Make sure to do a brief background check on your broker’s CS, it can save you a lot of headaches down the road.
Find a Company You Click With
The last bit of advice we’d like to share is to find a company you click with — someone who is aligned with your wants and needs, but also your ideals. Fortunately, there are plenty of brokers to choose from these days. The options are there, and all you need to do is figure out which broker is the one for you.
*This is a featured post.