Choosing a Forex broker to trade through can be quite frustrating and hard. It is like choosing your first car – you want it to be functional and to last for a long time.
Luckily, there are more forex brokers available on the market now. And what is more importantly, as the market keeps getting more competitive, the forex brokers are striving to do their best and impress the traders with the services they can provide them with. At the end of the day, Forex brokers desperately need to satisfy users in order to survive.
But still, that does not make the choice any easier. Therefore, why not spend more time now and go for the broker that would satisfy all of your needs.
In order to help you out, we have come up with the points you need to pay attention to while comparing different foreign exchange brokers.
Aspects worth your attention
As already mentioned, choosing a proper Forex broker might be rather tricky and complicated. However, we have prepared several aspects you need to pay your attention to. By doing that, you will be able to make sure that your choice is justified and based on pure facts analysis.
Security and safety
Before investing your money with the Forex brokerage, check how trustworthy it is. That might be done by checking if that particular Forex brokerage is legitimate or not. How that might be done?
Well, you definitely shouldn’t just blindly trust the words of the forex brokerage, as there are higher institutions that will do that for you. Those are the regulators that are issuing licenses for any financial institutions. Those vary from country to country. Notably, you can see what are those in some of the countries below:
- Australian Securities and Investment Commission (ASIC) in Australia
- Investment Information Regulatory Organization of Canada (IIROC) in Canada
- Autorité des Marchés Financiers (AMF) in France
- Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) in Germany
- Swiss Federal Banking Commission (SFBC) in Switzerland
- National Futures Association (NFA) and Commodity Futures Trading Commission (CFTC) in the US
- Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) in the UK
Usually, the forex brokers are the ones who mention the regulations on their websites. However, in case you cant find it on the forex brokers website, you can check the website of the regulatory institution. And if you didn’t find anything in its register, well…that is a clear sign that it is most probably a scam.
Once you made sure the forex brokerage is at least certified by a regulatory institution, it’s time to check the transactions cost and requirements. As at the end of the day you might want to know how expensive would it be for you to trade with that broker, right?
The information is usually provided right on the official website of the forex broker. Or it might be indicated in the review presented by the third party. Like in that case with the KontoFX review. Apart from the transactions cost, you can also find information regarding leverage, spreads, trading platform, etc.
Moreover, reading such reviews might be a good idea in general. As that way, you’ll be able to find a review that isn’t a promotion. Which makes it is more likely to be critical and transparent.
Deposit and withdrawal of funds
Before starting trading with the Forex brokerage, you need to check the conditions of funds deposit and withdrawal. As there might be some nuances you need to consider.
Things like the withdrawal fees, how long it takes and what options you have for those withdrawals. Also, make sure to check whether or not there were malfunctions with the system in the past.
No matter whether you are an experienced or beginner trader, you need to check what forex trading platforms the forex brokerage offers. As that might create a need for you to adapt, or maybe learn from scratch.
Notably, you can expect the majority of forex brokers to provide the option of trading with the MetaTrader 4 platform. As that is the most popular and simple one out there at the moment. However, that is not the most innovative one, as the last upgrade of the platform was done approximately one year ago.
The next aspect you need to consider checking is how the forex trading on the platform is managed. Thus, what are the FX trading pairs available, what is the leverage for each of them, what is the spread, etc.
The last aspect we will mention here will be the performance of the forex brokers’ support team. That is undeniably an important thing to check while deciding which forex broker to go with. As no matter how great your knowledge is, there might still be certain issues and question you won’t be able to deal with yourself. In that case, you will need a professional support team that would assist and guide you during the process.
So, try to contact them in advance, see how fast will they reply to you if at all. Check if the response is helpful, or if its just a way to increase their response rate.
Lastly, I would like to advise you not to rush with the decisions. Take your time, investigate, experiment, and analyse the data obtained before choosing what Forex brokerage to go with.