Six Tips For Selecting A Forex Broker
Published on May 26th, 2015 | by Joan Makai
If you are planning to deal in Forex, then besides the elementary knowledge about the market what you need the most is a reliable Forex broker. You will find a large number of Forex brokers online, but choosing the right one that suits your needs will be a difficult task. When it comes to choosing a broker there are certain considerations which should be taken cared of. Your choice of the a broker will affect your trading.
Here are some simple guidelines when choosing a Forex broker.
- Regulatory Compliance – As a trader/investor you should choose a foreign exchange broker who is registered with a regulating authority. USA, UK, Japan, Australia and Switzerland are certain countries which have dedicated regulatory agencies. National Futures Association (NFA) and Commodity Futures Trading Commission (CFTC) in USA, Financial Service Authority in UK and Australian Securities & Investments Commission (ASIC) in Australia are some of the regulatory agencies. Before choosing the broker, you must have a clear understanding of the regulatory agency the broker is associated with. If the broker is not associated with any of the regulatory authority, then think twice before signing him.
- Account Types – In order to lure the traders, the Forex broker offers varied account types. These can be standard accounts, mini accounts, and micro accounts. Some brokers offer customization options which support adjustable leverage as per the needs of the clients. It is beneficial for the trader to choose a broker who offers accounts with different features and services to cater the needs of the trader.
- Initial Deposit – As a newbie, you may not want to risk a large amount therefore you would seek for a broker who would offer the lowest capital investment. There are various drawbacks of under-capitalization in the Forex market, therefore when choosing a reliable broker you must pick the one that encourages you to make a relatively higher investment though within your limits.
- Trading Platform – When choosing a Forex broker you must always look for the trading platforms and software he has in the display. The trading platform should be user-friendly with a variety of fundamental analysis tools. Before opening and funding an account, you must first try out trading platforms on a demo account and get used to various customization options.
- Deposit and Withdrawal – As a trader/investor you should have an ease of depositing and withdrawing funds from your account. Before signing up with a Forex broker find out which payment methods he will avail you. PayPal, wire transfer, and checks are the most trusted ways of funding and withdrawing money. Make sure that your broker guarantees a smooth deposit and withdrawal process.
- Customer Support – Customer support is essential when your system experiences a glitch. Forex market runs 24×7 and so should be the customer service from your online broker. You must check the medium to contact them whether it is through email, chat or you can talk to a live person? This will help you find how patient, helpful and reliable the staff is.
In order to succeed in the Forex market, do a bit of a research before committing to a broker.