How to choose a forex broker
The first step of becoming a forex trader is to choose a reliable forex broker. To choose between brokers, traders should investigate brokers from a number of aspects such as reputation, support service, spread rates and security. As you may already know, forex is one of the largest financial markets, in which several assets is traded internationally. Therefore, trading in this market has a lot of risks. Traders need to have market knowledge to be successful in this market.
The first step to begin trading in this market is choosing a forex broker as an intermediary between you and the banks. In fact one of the most important decisions, traders make throughout their whole trading career is choosing a forex broker. So try to choose wisely, if you don’t want to loose your money. The most important requirements of a reliable forex broker are a valid license, offering outstanding support service, different financial instruments, etc. In this article we are going to discuss several important features of a good forex broker.
Why you should choose a good forex broker?
After deciding to trade forex, traders need to choose a broker. In fact brokers are an intermediary between retail traders and banks and financial institutions. Therefore brokers play a crucial role in the forex market and most traders spend a lot of time looking for a suitable broker that meets their trading needs and expectations. Keep in mind that if the broker is chosen carelessly, traders are in risk of loosing their capital.
Features of a good broker
Security and reliability
The most important feature of a forex broker is its security and reliability. All countries, in which forex trading is very common, oblige their brokers to follow a certain protocol to establish a more secure trading environment. Therefore traders shall pay attention to the regulatory of the broker, and avoid signing up to unregulated brokers. This way, investors and traders wouldn’t be worried about security issues, hence trading more efficiently.
Deposit and withdrawal
Since broker’s job is to ease the trading process for traders, there is no reason for them to complicate the deposit and withdrawal procedure. Therefore try to choose those forex brokers, which offer the easiest and most accessible payment methods. Also check the payment fees. Some brokers tend to not receive any commissions from traders for deposits and withdrawals. This could increase your gain in the long run.
The trading platform is the bridge between trader and financial markets. Therefore traders should choose user-friendly and appealing trading platforms. These platforms should also offer technical and fundamental analysis tools, and a convenient environment for opening and closing positions. You should keep in mind that a good platform is the one which is designed in the most simple way and only has “buy” and “sell” buttons. Some platforms have an emergency button, which closes all positions instantly. Badly designed platforms could lead to more mistakes, such as adding to a position instead of closing it, or buying when you wanted to sell.
These mistakes could make the trading process frustrating. Make sure to choose a good platform such as MetaTrader5, which is a popular trading platform among its counterparts. Other features to consider include various pending orders, automated trading, backtesting strategies, strategy builder environment and also trading warnings. A lot of brokers allow their customer to test their trading platform by creating a demo account and trade without risking their capital.
Aron Groups Broker facilitates trading by offering MetaTrader5 platform to its clients. Using MetaTrader5, traders are allowed to trade several financial instruments such as Stock, Energy, Commodity, Cryptocurrency and Currency pairs, benefiting from pending orders and limit orders such as stop loss (S/L) and take profit (T/P). When trading with Aron Groups Broker, you can also take part in numerous incentive offers and bonuses. Check out the latest bonuses in Aron Groups website.
Forex is a large market and numerous financial instruments are traded in this market everyday. The more variety a broker offers, the more opportunity traders have when trading with this broker. Try to choose those brokers that provide you the opportunity to experience trading several assets such as energy, commodity, metals, cryptocurrency, currency pairs, stocks, etc.
A large number of transactions is carried out in the forex market in a very short time period. Therefore choosing a broker with excellent support service is essential. It’s also a good option to be able to contact the support team of the broker in person, rather than communicating through a robot. When you are looking for a forex broker, you could easily find out about the quality of the support service of the broker of your choice, by contacting them and test their service. Waiting time, operator’s ability to answer several questions about spread, regulation, leverage and other details, determine the quality of the support service.
Another thing that you should take under consideration when choosing a broker, is the volume of transactions they are able to handle in the forex market. If they are able to handle a large volume of transactions, they are probably a trustworthy broker.
Spread, commission and leverage
Every broker may offer various spread rate and leverage. In Europe, forex traders have access to various leverages depending on the type of account they create. For retail traders the leverage is up to 1:30, while this amount reaches as high as 1:500 for professional traders. Other factors that affect your profitability are spread rate and commission. Forex brokers gain money by collecting spread and commission from their customers. Brokers, which require commission, receive a percentage of each trade as commission from their clients.
However, some brokers don’t require commission, but they make money by requiring spread. Spread is the difference between ask price and bid price. As this difference goes wider, the spread rate increases. For example, spread could be fixed to 3 pips or floating according to the market’s instant price.
Look out for scams
Unfortunately, some groups of people use forex trading for fraudulent purposes. The number of scams in forex industry is growing by day. Therefore it’s important to be able to identify these scams and keep away from them, otherwise you won’t be successful in this market. The broker is obliged to protect personal information of each individual client and prevent any third parties to obtain them. When a stranger contacts you on your personal cell phone, the company you trusted with your personal information has probably exposed them to strangers. Because you didn’t consented to expose your personal information.
If you intend to start a career as a forex trader, you would probably want to choose a broker first. Finding a reliable and trustworthy online broker might seem a little easier said than done. Therefore always do your homework before signing up to a broker. Investigate available brokers in your region from several aspects. The above features are the essentials that a good broker shall provide its clients with. Try to find a broker that meets your trading needs and offers outstanding services, and can be trusted with your personal information and of course your money.
Written by: Mohsen Mohseni (Aron Groups).