The real challenge in 2018 is not being able to find a forex broker but finding the best broker from the sea of brokers that seem to have flooded the forex market. This becomes a particularly difficult task if you are really not too sure about what kind of broker you want to work with. Read on to find out the qualities you need to look for when wanting to partner with a forex broker.
First and foremost, you should pick up a broker that has a lot of credibility in the market as far as money-keeping is concerned. No one would be interested in investing their hard-earned money with someone who is not honest with the funds entrusted. You can check the credibility of any forex broker easily by finding out if they are registered with regulatory agencies (NFA and CFTC in the USA, FCA in the UK, ASIC in Australia, AMF in France, etc.) in their respective countries.
#2: Transaction Costs
As a trader in the forex market, you will have to pay transaction costs (spread, commission) for the trades that you are placing on the market. Therefore it is in your best financial interests that you look for the broker that offers the cheapest transaction costs in the market. However, you will have to weigh the low costs against reliability and security and make a fair judgment in choosing the best broker in 2018.
#3: Modes of Deposits and Withdrawals
It is important to ascertain the modes of withdrawal of funds and deposits before deciding to work with a specific forex broker. The procedures have to be hassle-free. Any broker holds your funds to help with trading forex. There is no reason to work with a broker who makes these activities difficult for the trader. Ensure to check out and ascertain that the withdrawal of your funds is a smooth and easy procedure and it should not take too long for the funds to reach your account.
#4: Platform for Trading
For the purpose forex trading, the broker should offer a platform that is easy to use, quick and stable. For a newbie trader, it is important to check out the trading platform prior to partnering with the broker. Check out the charting tools that are available, whether the news feeds are free, and whether there is sufficient information provided that allows you to trade with comfort and confidence.
#5: Customer Support
As a new trader, you are likely to have more problems than an experienced one. Therefore it is likely that you will need to contact the broker more often. Therefore you need to pick a broker that offers good customer support. You should be easily able to contact the broker whenever you need to. A good broker will offer round-the-clock support and in many languages.
#6: Personal Data Security
#7: Trading Style
A trader has to pick a broker depending on the trading style that is favored. A short-term trader interested in Scalping should choose a broker that provides a Currenex account and allows scalping trades. Currenex accounts have low spreads and use software that is of an institutional grade. Now, are you a discretionary trader? If yes, then you must work with forex brokers that provide you with good information related to fundamental and technical analyses. If you are a trader that has decided to do part-time trading, your broker should offer automated strategies so that you can suitably trade using that when you are busy. If you are a trader that uses algorithmic trading methods, you must be able to use VPS servers to be able to continue trading even when the Internet has been disconnected. Some brokers offer the facilities of managed accounts by employing skilled professionals to be of service to those customers that want to have managed accounts.
#8: Trading Account Options
Brokers have a lot of differences as far as options offered by them: minimum deposit amounts, methods of trading, terms of service, etc. Some brokers demand low deposit amounts to start a trading account say $5. Brokers outside of the US usually stipulate a minimum of $50 or $100 to start a trading account with them. The amount of facilities on offer for an account is usually dependent on the minimum amount that has been deposited by the customer. The terms are more relaxed for larger deposit accounts. The spreads will become more favorable and the trader will have access to better tools, free VPS services, account managers, etc.
It is a good idea to have the trading account made up of the currency of your home nation. In the first place, you do not have to change the money when you first open a trader’s account. If the currency is different and if the base currency goes down with respect to the home currency, you can lose large amounts of money. Whereas some brokers offer only USD as the base currency, other offer a number of base currencies from which you can choose yours. The size of the lot to be traded varies according to the type of account held by the trader. A majority of entry-level accounts offer lot sizes of 1000 currency units.
This list of factors is not exhaustive. However, these are some pointers that will help you to pick the best broker in 2018 to trade forex with.