Forex (Foreign Exchange Market) is an international currency trading market where buyers and sellers from all around the globe come together. A broker acts as an intermediary in this global marketplace by matching buyers with sellers.
When searching for the right forex broker, several key considerations should be kept in mind such as regulatory requirements, fees, trading conditions and liquidity. This article can assist in selecting an ideal broker for you.
Regulatory Requirements
Forex trading has many untrustworthy brokers; from those out to steal your money to those with hidden costs that won’t become apparent until after you become their customer.
One of the key factors when selecting a broker is their regulatory body. A reliable broker should be open about this information on their website as well as containing details of their head office address so it’s easier to ascertain whether or not they are regulated.
Brokers regulated by an established regulator are less likely to engage in front running, the practice whereby brokers step in front of clients in order to buy or sell on their own account at higher or lower prices than would otherwise exist. Front running is illegal and brokers who abide by an authoritative regulator should be able to demonstrate they do not engage in it; furthermore, reputable brokers should offer reliable site security as well as compensation in case losses occur.
Liquidity
Though many have become wealthy trading foreign currency, it should be remembered that forex trading can be risky. Although its 24×7 access provides plenty of opportunity for traders, ensuring they are well informed before entering any trades should always come first.
Reputable brokers offer an array of trading instruments for both professional and retail investors alike. For example, IG offers CFDs on more than 22,000 stocks and 6,900+ ETFs as well as 300+ futures contracts – not to mention access to liquid markets through partnerships such as Saxo Bank.
The top brokers offer customers a selection of execution methods such as ECN, STP and market maker trading platforms. Furthermore, they should offer access to Tier 1 liquidity providers and multiple PoP pools; possess the latest technology for fast execution and post trade clarity; offer customers their native language e-currency accounts as well as having dedicated telephone customer service teams available 24×7;
Trading Platforms
Not only should the best forex brokers offer competitive trading spreads, they should also offer a user-friendly trading platform which enables clients to trade across asset classes without much difficulty. Furthermore, traders should have access to an impressive assortment of trading tools and educational materials.
Oanda forex broker stands out from its competition with several features that set it apart, including free demo accounts and an expansive selection of trading instruments; clients include both novice and seasoned traders; it is highly regulated with competitive fees;
eToro is an outstanding forex broker, which allows traders to easily copy trades of other users. Their user-friendly platform provides over 1900 trading instruments, such as CFDs on popular cryptocurrencies. Their excellent customer service team and extensive educational materials, as well as comprehensive FAQ sections on its website make this broker one to consider. Their fees, mobile trading capabilities, inactivity fees and services provided can also be seen here.
Customer Service
Customer support is of utmost importance when selecting a forex broker. Look for brokers with open lines of communication and the capability of quickly answering your questions quickly and accurately, along with 24/7 support services to be sure you can count on someone when needed most. Also consider whether or not the broker offers investment products such as stocks, ETFs or options as this could provide another avenue to diversify your portfolio and potentially generate passive income streams.
