How to Choose the Best Online Forex Broker
How to choose the best online forex broker is an easier job these days because in the earlier days, anybody that wanted to find a broker had to make good use of the telephone to do all the activities starting from finding a broker. With the advent of the Internet, things have changed drastically and a trader can now spot brokers, partner with the desired broker and conduct trades online from anywhere at any time. However, though it sounds simple, there is are thousands of forex brokers that have flooded the marketplace and the most difficult part lies in being able to spot out the best online forex broker that there is to partner with. This article aims to provide some pointers that can answer the question as to how to choose the best online forex brokers that will help you to achieve your financial goals. The whole process of choosing a good online forex broker is made simpler if you follow these guidelines.
Guideline #1: Licenses and Regulations
The most important guideline is to choose an online forex broker that has the requisite licenses and regulations to function as a legitimate broker. The best forex brokers in the UK, for example, would be regulated by the Financial Conduct Authority (FCA). This is the regulatory body that oversees the legitimacy of all financial transactions that take place in the country. Regulated brokers are preferred as the clients’ funds remain safer in such brokers’ hands. This is because they have separate accounts for their own capital funds and their clients’ funds. Such brokers would be more reliable than their non-regulated counterparts.
Guideline #2: Trading Platform
The trading platform offered by the online forex broker should be studied and chosen so that it helps the traders to meet their financial goals. The platform should be simple and easy to use and navigate as well as technically advanced in that it helps the traders to profit on their chosen trades. It is a good idea for traders to test the platforms for themselves before choosing the one that suits them the most.
Guideline #3: Customer Support
It is always beneficial to choose an online broker that offers the best customer support in terms of the quality and speed of response. The best online forex brokers offer 24/7 customer support lines and some of them offer these services in multiple languages for the benefit of international clients. Any online forex broker that cares to solve their customers’ problems through phone or email would be a better choice that others that do not provide the same.
Guideline #4: Leverage Offered
Different online forex brokers offer different leverage ratios. It is important for traders to understand that with higher leverage that is offered by a broker, the chance of higher losses is also increased. It is best to choose a broker that offers leverage suited to the trading style of the trader.
Guideline #5: Deposit Bonus
The newbie trader can chose from hose brokers that offer the best first deposit bonus. This gives them more money for trading in the initial stages. It is also important that they choose the broker after clearly understanding the broker’s terms and conditions.
Guideline #6: Withdrawals/Deposits
It is important for the trader to know the brokers terms and conditions relating to money deposits and withdrawals. The minimum amount to be deposited, privileges that are available to deposits of different amounts, the withdrawal conditions, the time that it takes for the money withdrawn to reach the trader, etc., should be clearly understood before signing on the dotted line.
Guideline #7: Trading Costs
The trader can find out the costs that the broker charges for executing trades on their platforms. Based source forex brokers for scalping for most brokers, a major portion of their income is through spreads, which the difference between the bid and ask prices. The trader should check if the broker offers fixed or variable spreads, and whether there would be other charges for any trade excluding the spread.
Guideline #8: Demo Account
It is important for any newbie trader to practice using a demo account before opting for real time trades. After due research, it is important to make a list of online brokers that offer demo accounts and choose the one that is most suited to their style of trading. It is important to work on these accounts before depositing real money and trading online.
Other important parameters that can be checked out include the minimum amount that needs to be deposited. In this context, a broker with low account minimum can be chosen. It is important not to fall for fraudulent promotions offered by some online forex brokers. At the end, it is also best for the newbie trader to choose an online broker that offers educational services and tools so that the traders can improve themselves continuously.