Such is the level of competition within the retail Forex market that just the thought of sifting through all the available brokers can give you some headache.
It may be quite overwhelming to select which Forex broker to trade with, especially if you’re unaware of what you should be looking for.
In this blog, we’ll discuss the qualities you should look for when choosing a Forex broker.
Security
The foremost characteristic that a good broker must have is a high-security level. After all, you aren’t simply going to hand over thousands of dollars to an individual claiming he is a legit Forex broker, right?
Luckily, it isn’t difficult to check the credibility of a Forex trader. The world is filled with regulatory agencies that separate the trustworthy from the fraudulent.
For example, the regulatory bodies in the UK are PRA (Prudential Regulation Authority) and FCA (or Financial Conduct Authority).
Before even thinking of investing your money in what you think is the best UK broker, ensure that the broker is a member of the regulatory bodies.
Transaction costs
Like it or not, irrespective of what kind of currency trader you are, transaction costs will always haunt you.
Every time you enter a trade, you’ll have to pay for either a commission or the spread, so it’s only natural to look for the cheapest and most affordable rates.
Often, you may need to sacrifice low transactions for a more reliable broker.
Ensure you know if you need tight spreads for your trading type, subsequently reviewing your available options. It is all about finding the appropriate balance between low transaction costs and security.
Deposit and withdrawal
Good Forex traders will enable you to deposit funds and withdraw your earnings in a hassle-free manner.
Actually, brokers have no reason to make it difficult for you to withdraw your profits because the only reason they hold onto your funds is to facilitate trading.
Your money is only held by your broker to make trading a little easier, so there isn’t any reason for you to have a hard time acquiring the profits you have earned. Your broker should ensure that the withdrawal process is smooth and steady.
Trading platform
During online trading, the majority of the trading activity happens through the trading platform of the brokers. This infers that the trading platform of your broker must be stable and user-friendly.
When searching for a broker, always check that what its trading platform has to provide.
Does it provide free newsfeed? How about easy-to-use charting and technical tools? Does it present you with every information you’ll need to trade in an appropriate manner?
Execution
It’s compulsory that your broker fills you at the best possible price for your orders.
During normal market conditions (for instance, surprise events, no important news releases, or normal liquidity), there isn’t any reason for your broker to not fill you at, or very close to, the market price you encounter when you click the ‘sell’ or ‘buy’ button.
For instance, assuming your internet connection is stable, if you click ‘buy’ EUR/USD for 1.3000, you should either get filled at that price or within micro-pips of it. The rapidity at which your orders get filled is quite important, especially if you are a scalper.
A little difference in price can make that a lot harder on you to conquer that trade.