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How to Choose a Broker

16 May 2018 One Comment

Forex trading is extremely popular nowadays. With over $5 trillion traded globally, Forex trading is considered as the world’s largest financial market. The market which was once accessible to large institution and wealthy people only, can now be accessed by average traders as well due to the emergence of the internet. As a consequence, the amount of Forex brokers on the market has considerably increased. Today, you will learn about the different factors that you need to consider before choosing a broker. But first, you have to understand what a Forex broker is.

 What is a Forex broker?

A Forex broker  is the intermediary between the trader and the Forex market. They provide you with a trading platform that allows you to buy and sell currencies 24 hours a day and 5 days a week. Each broker’s platform may differ, but they all have the same trading methodology that allows you to trade on the Forex market.

Finding a reliable broker is very difficult, especially with the amount of competition that exist between Forex brokers. To help you choose a well grounded broker, the remainder of this article will be dedicated to explaining the 5 reasons you should consider before choosing a broker.

5 reasons to consider when choosing a broker:

  1. Compliance:
    The first thing you need to check when looking for a trusted broker is its regulatory compliance. It develop rules, programs and services to protect the integrity of the Forex market, traders and investors. At Trader.Online for instance, the company follow strict AML policy.AML refers to Anti Money Laundering policy  which prevent and counter money laundering activities together with terrorist financing. Trader.Online is able to ensure that no illicit transactions are placed on its platform by using Know Your Customer (KYC) policies. This procedure allows them to collect facts about their clients which in turn ensures that the traders are not exposed to any type of risks.
  2. Trading Platform:
    The trading platform is what traders use to access the Forex trading market. When choosing a broker, traders have to make sure that the chosen platform or MT4 software provided is easy to use and visually pleasing.In Forex trading, technical and fundamental analysis plays an important role. As such traders have to make sure that the chosen platform offers a variety of technical and fundamental analysis tools. You also have to make sure that you can enter and exit trades very easily.

The platform provided by Trader.Online is a state of the art trading platform backed by high end technology that enable traders to access both technical and fundamental analysis tools from the platform itself. No third party application or website needed. The user friendly layout have clear buy and sell buttons which limits the chance of accidently adding a position or going short when you meant to go long.

  1. Spreads and Commissions:
    A broker makes money from spreads and commissions. A broker that uses commissions charges a specified percentage of the spread. In simple words, spread is the difference between the bid and ask price of a currency pair.Some brokers decide to capitalize on wider spreads which makes it difficult for traders to make a profit. When choosing your broker make sure you compare the commission or spread rate with other brokers before making a decision.
  2. Currency pairs:
    A great deal of currencies is available to trade on the Forex market. Most brokers will provide the majors pairs such as EUR/USD, USD/JPY and GBP/USD. A broker may offer a huge selection of currency pairs to trade, but at the end of the day what matters the most is that they offer the pair in which you as a trader is interested in trading.Learn more about the different assets are normally traded here .
  3. Customer Service:
    Since Forex trading takes place 24 hours a day, customer support plays a vital role and should be available at any time of the day. Customers should be able to easily contact someone to receive assistance.

Read more on Forex Trading 

You rely on your broker for a lot of information and if the latter is not able to give information such as spreads, regulations, leverage or details about the company in a concise manner, you already have an indication about the type of broker you are dealing with.

Bottomline:

Assessing your needs first will considerably narrow the field of possible brokers to choose from. Then you can focus on the above mentioned criterias. A bit of research about your potential broker will actually be beneficial in the long term as you will be more able to focus more on your strategies to use while trading instead of worrying about your broker.

One Comment »

  • Prince Rowe said:

    Nice Article! I will definitely check out Trader.Online trading platform.

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