Choosing a broker can be a daunting task to perform, but it is necessary if you want to trade Forex successfully in the long run. How to distinguish a good broker from a bad one? Let’s find out.
First and foremost, the great broker is usually licensed by the reputable regulatory body. This ensures the protection of client’s rights, if they are violated. Indeed, in case the broker is unregulated, there will be no one that can provide any form of legal enforcement. Additionally, the regulatory environment of the broker should be strong, like in the USA and the UK for instance.
Good Forex brokers provide flexible account conditions. This means that the broker should offer low minimum deposit requirement, different amounts of leverage suitable for all traders and also a free demo account has to be available. The demo account allows testing the broker’s services prior to making any deposits. In addition, the broker might offer several kinds of trading accounts. The larger is the account, the more extra features are added. These features usually include market analysis, news, trading signals and a personally dedicated manager.
The broker in the Forex industry is usually compensated through commissions and spreads. However, to the trader’s advantage, great broker does not charge any commissions for the order execution. Instead, they use spreads as the main source of revenue. Spreads at each broker are different, namely fixed or variable. Fixed spreads are more preferred, since they do not change under market conditions and cannot be purposely widened by the broker. Additionally, traders quite often look for the STP/ECN broker, as it offers tight spreads and ultra-fast execution of orders.
The total pool of assets also plays a huge role, when ranking the best brokers. Good FX broker offers all types of major, minor and exotic currency pairs. It is important for the broker to meet the needs of all types of traders.
All trading activity is managed through the trading platform. The well-developed trading software provides a wide range of charting tools, technical indicators and also ensures a high level of customization. The interface should be user-friendly so that the trader will have zero difficulties with the platform navigation. Another aspect to mention here is the slippage. It is almost inevitable, but if the platform works quickly without any lags, the risk of getting considerable slippage is reduced to the minimum. The top-tier online broker caters for clients by making trading as pleasant as possible. Mobile trading is one of the most comfortable ways to reach financial markets.
Client support is of paramount importance when you assess the broker. There should be no trouble for the client to contact customer support agents whenever they deem necessary. The broker has to offer a live chat, email support and phone. Some might even provide the support via Skype or WhatsApp.
Lastly, deposits and withdrawals should be quick and smooth. The decent broker usually offers different transaction methods, e.g. credit/debit card, e-wallets, wire transfers.