One of the biggest decisions that you need to make when trading currencies is choosing a forex broker to trade with.Remember that this is the company you will be entrusting all your trading capital to, hoping that you can access your money whenever you want to execute a trade or to withdraw your profits.
Although there has been a surge in the number of forex brokers in the US in recent years, not all brokers are created equal. To trade successfully, you need to make sure that you choose one who is safe and best fits your trading needs.Here are a few tips on how to choose the best forex broker in the USA:
- Understand your Trading Needs
Before you start looking for a forex broker, we highly recommend that you assess your trading needs.As a trader, you may have a specific platform preference, tools and research needs that need to be met to trade effectively. Taking the time to understand your investment style will help you determine which broker will serve you best.
Make sure to always choose a regulated forex broker so that you have someone to turn to if you are dissatisfied with a trade dispute.In the U.S. Forex brokers are regulated by the National Futures Association (NFA). The broker should also be registered as a Futures Commission Merchant under the Commodity Futures Trading Commission (CFTC).To check FX brokers NFA membership status, and any disciplinary issues, visit NFA’s official website.
Recommended Forex Broker in USA 2020 Regulated CFTC
- Competitive spreads, commissions, and fees
A smart trader should understand that these trading costs can have a significant impact on your profitability. Whenever you trade, you will have to pay for either a spread, commission or other miscellaneous fees. Therefore, look for the most affordable and cheapest rates. Sometimes, however, you may need to forfeit a broker with low transaction costs for one who is more reliable. In the end,you need to be able to find the right balance, reliability and low transaction costs.
- Top quality customer support
This feature is more important when trading forex than in other industries. The lack of customer support can result in major losses. For instance, when you need to open or close a position, and your broker does not respond to your calls or emails in a timely manner, you may lose the chance and end up in losses. Before you start trading with a broker, test their customer support by calling, emailing or chatting with their online representatives.
If they don’t take care of your request as expected, consider looking for a different broker.They should also respond to your requests with minimal delay. The most effective way to verify this is by opening a demo account with the broker. Try trading on the demo for several weeks to make sure that all your orders can dispatch instantly, the platform is stable and the spreads are tight.
- Currency pairs offered
Although there are many currencies on the market, only a few get the majority of attention, thereby trading with the greatest liquidity. Some of these currencies include USD/JPY, EUR/USD, USD/CHF and the GBP/USD.
Even if a forex broker offers a wide range of selection for currency pairs, the most important factor is that they offer pairs that you as a trader or investor is interested in.
- Competitive trading platform technology
The trading platform is where all the trading goes down, making it an important feature to consider when choosing a broker. Even if a broker offers the best spreads and customer support in the world, if their platform is not easy to navigate and has low spreads, you will fail as a trader. Therefore, choose a broker whose platform enables you to fulfill your goals with minimal steps.
Ideally, the platform and any software contained in it should be easy to use, visually appealing and have a variety of technical and fundamental analysis tools. You, as the trader, should be able to enter and exit trades with ease. The platform should have clear buy and sell buttons and if possible, a panic button that closes all open positions.
- Data Security
When opening an account with a forex broker, you are required to transmit a lot of personal and financial data such as copies of your passport, bank account details, credit numbers, and utility bills. A broker with poor internet security practices can lead to your personal financial data being stolen, disrupt your trading activity and put you at risk of identity theft.
- Deposit and withdrawals
A good forex broker should allow you to withdraw your earnings and deposit funds at a moments notice. A broker has no reason to make it hard for you to access your funds since the only reason they hold it is to facilitate smooth trading. Also make sure that their withdrawal process is simple and speedy.
It is crucial and mandatory that your fx broker fills you at the best possible rate for your orders. Under normal market conditions, a broker has no reason to not fill you at or close to the market price you see when you click the buy or sell option. A few pip differences can make it harder for you to win a trade.
Therefore, with a stable internet connection, if you click the buy or sell GBP/USD for 1.250, you should be able to get filled at that price or within micro-pips of it. The speed at which your orders get executed is crucial to successful trading, especially for scalpers.
You can never be too careful when choosing a forex broker in the US to trade with. So take the time to do your due diligence to ensure you trade with a reputable forex broker.