The forex market is very competitive, but more so in recent years than ever. The competitiveness in this field can give an ordinary person a headache from the selection of all the brokers available.
The task of choosing the best forex broker to trade can put an ordinary person into disarray, especially if the person willing to trade knows nothing about the market or how things are done.
So because of that, we are going to talk about how to choose the best forex broker.
1. Security
It would seem that security is an important characteristic in any field of expertise. Luckily for you, there are regulatory agencies that can vouch for the trustworthiness of your forex broker. As a person who is willing to spend money on the forex market, you can’t simply hand over thousands of dollars to a person who simply claims he’s legit. This is why each country has its own corresponded regulatory bodies that monitor forex brokers.
We are going to mention some of them:
- United States: The National Futures Association (NFA) and Commodity Futures Trading Commission (CFTC)
- United Kingdom: Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA)
- Australia: Australian Securities and Investment Commission (ASIC)
- Switzerland: Swiss Federal Banking Commission (SFBC)
- Germany: Bundesanstalt für Finanzdienstleistungsaufsicht (BaFIN)
Before you think about giving your hard earned money to a broker, make sure he is a member of your countries regulatory bodies.
2. Transaction Costs
Transaction costs are always present no matter in which currency you are trading. According to data at Fx-List, every time you conduct a trade, you will have to pay for eighter the spread, or a commission. So a great rule of thumb in this industry is to find the brokers with the cheapest and most affordable rates available to you.
3. Deposit and Withdrawal
Any good and professional broker will allow you an easy deposit and even easier withdrawals. Since a broker holds your funds to facilitate trading, there is no real reason as to why your broker would hold your money and make it hard for you to withdraw your earnings. Your broker should make it his job to make the withdrawal process go as smoothly as possible, with minimum waiting time.
4. Easy Trading Platforms
Since trading in online forex happens on the broker’s trading platform, the platform in question should be more than user-friendly and stable at best. Forex trading can be quite confusing for people, so the platform must be easy to navigate and understand. There are many trading platforms where many brokers operate. Choosing the best one can be quite tricky, but the better ones have features such as news feeds, easy to use technical and charting tools, information needed for trading properly and more.
5. Execution
A good and reliable forex broker will give you the best possible price of your order. This is a mandatory task that all reliable brokers should do. Furthermore, a good internet connection is needed so that real-time trading can occur. In the case of normal market conditions, your forex brokers should fill you in on the exact market prices you see when you see at the buy or sell buttons.