Selecting a Forex broker is very tough especially for the new traders. Among the hundreds of Forex brokers, choosing the right one is challenging as well as painstaking. To make this difficult task easy for you we are presenting a guideline for you.
The first thing you should do before choosing a Forex broker is to ensure the safety of your funds. By doing this you are ensuring that your chosen broker is reliable enough not to steal your money. After this, you should take the assurance from your broker on the fact that your broker will be helpful to you to recover your deposit whenever you want. For this reason, you need to choose a broker who has a good reputation and a good financial situation. Being assure about all these things, consider the offer, spread commissions and customer service provided by the broker, then select him.
When you will select your Forex broker, make sure that your broker is registered with the US Commodity Futures Trading Commission (CFTC) and a member of NFA (National Futures Association). If not, they should be licensed by regulatory bodies like CySec, FCA, ASIC, or FSA. You will get this information from the website of the Forex broker in the about ask section. There are trade associations and regulatory bodies similar to these that can be found in almost all the countries of the world. Traders should research properly research the overall reputation of the broker and search for the perfect one according to his preference.
Safety of funds
The brokers who are regulated must follow some rules about the safety of the fund of the investors. The regulated brokers are instructed to keep all the funds of the investors separate so that these funds won’t be used or wasted for any reason by mistake. Click to read more about high-end brokers like Saxo and you will never have a problem with the safety of your funds.
Now, let’s learn about the different types of brokers that have an impact on a trader’s trading performance.
Dealing Desk versus ECN brokers
A dealing desk Forex broker is registered as a retail foreign exchange dealer can offset trades. The broker who uses a dealing desk does not work directly with market participants. On the other hand, an ECN broker has direct access to the other market participants through an electronic communications network. ECN brokers are more popular for their business model than dealing desk brokers.
Fees and commissions
By brokerage fees, we mean the charges from the brokers for their service. The amount of these fees is not fixed as it depends on the broker’s type and the service they are providing. There is a small difference between the fees and the commissions. Fees represent a flat charge while commission varies as it depends on the size of the transaction.
Sometimes brokers offer premium services, some of which prove very useful. But the cost of these premium services is usually high. So, you should search for a broker who offers different premium services at a cheaper rate. Before taking the premium offer you need to decide whether you need these services or not.
Customer service is a must to check before choosing a broker especially for the new traders who are not so experienced in this trading field. Whenever the customer faces any problem the broker has to ensure that his client is getting the proper customer service. You need to check the review to know how your broker serves his customer.
Trading platforms and deposit & withdrawal
A trading platform is a website where you will perform your trade activities. A simple, informed and organized trading platform can make the trade easy for the traders. So, choose the broker who gives the best trading platform facilities.
You should select the broker who will ensure the ease of your deposit and withdrawal. Make sure the broker you will choose will make these deposit and withdrawal procedures easy.