What to Look for in Your Forex Broker
When selecting a Forex broker, there is a large list of features that one should evaluate. Here are several areas that should be assessed before choosing the broker that is best for you.
The first thing that you need to check is if the broker is reliable. While there is no global regulatory body for Forex markets, several countries or regions have their own financial regulatory organizations that have specific sets of rules and regulations. Check whether the Forex broker you are evaluating is associated with any one of them.
Many investors believe that trading costs are not so important in Forex markets since brokers do not charge any commission or fee. However, this is not entirely true. There are some Forex brokers that operate as a ‘no dealing’ desk. These brokers charge a fee on a regular monthly basis for the services that they provide.
Spreads
Another group of brokers don’t charge a fee but make their profits from the concept of pips. A pip is the difference between the selling price and the buying price of a currency . This is also referred to as the spread and it is the primary form of revenue for the Forex broker. Spreads can be fixed or variable. It is better to opt for fixed spreads even though they tend to be higher at times than the variable, especially if you are just starting out.
All Forex brokers offer Forex trading platforms. These platforms are unique and have a user interface that is generally customized by the Forex broker even though the base application may be similar. You need to ensure the platform you choose is responsive so that you get the trades executed at the price you have chosen. Delays can sometimes mean a difference between profit and loss. In addition, trading platforms should be easy to operate and be user-friendly as well.
A good broker offers a choice of many payment options including bank wires, credit cards etc. In addition, withdrawals should be done easily and within an acceptable time frame. When traders are not able to withdraw their monies easily from the trading account they have set up this is a sure sign that the Forex broker is conducting a fraud or is scamming your account. It is important for you to be well versed in the various withdrawal methods offered by the Forex broker so you can spot any fraudulent activity before it is too late.