Forex Trading is gaining popularity all over France, thanks to the enormous volume of global currency trading, which stands at an estimated $4 trillion per day. However, with the rise in popularity, so are the numbers of complaints against fraudulent brokers. When trading currencies, it is the brokers that hold your money in an account that changes value every single second in reaction to daily profits and losses.
Brokers also handle all the fees, which may include withdrawal requests, commissions and access to expert advice. While some of them are reliable and open about their fee schedules, some hides this information. This means that traders should do their homework on brokers before opening an account with them. To avoid unwelcome surprises, here is an in-depth look at some of the factors that you should take into consideration when choosing a trusted Forex broker in France.
How to Choose Trusted Forex Brokers in France
The Bank of France (Banque de France) is a major influence of the foreign exchange market in France. It is responsible for stabilizing the market, introducing new monetary and foreign exchange rules as and when needed, and generally helping in its development. However, AMF (Autorité des Marchés Financiers) and ACPR (Autorité de ContrôlePrudentiel) are the subsidiary bodies mandated with the responsibility of regulating Forex brokers. The French AMF also oversees regulation of the stock market and safeguarding the investor’s interests. AMF was established in 2003 under the Financial Security Act. It is the main organization responsible for protecting the stability of the French financial markets. Some of the duties of the French AMF include;
- Maintaining order and discipline in the French Financial Markets
- Licensing financial service providers
- Making sure that traders and investors are provided with all the necessary information before investing. The French AMF regularly publishes analysis, guides, and reports on financial services, any risks associated with them and warnings against using unlicensed investment firms. In fact, it maintains a list of all officially blacklisted Forex companies in France. This list is continually updated to make sure that the French citizens and investors are up to date.
- Protecting investments in financial institutions, including other forms of investment and savings vehicles
Trading Platforms and Software
The trading platform a broker uses when trading Forex is a crucial factor to consider when choosing a broker. A broker should adopt a trading platform that offers convenience in terms of time to allow the placing of orders 24hours a day. Most of the Forex brokers in France are members of local branches of Forex brokerage firms, which obtained their legal authorization from the CySEC (Cyprus Securities Exchange Commission). According to MiFID regulations, these brokers are legally allowed to operate in France as soon as they register with the AMF and establish a local office.
Since the main aim of any brokerage firms is to get clients from across the globe, they tend to adopt trading platforms that have the biggest appeal to traders. The most popular trading platform in France is the Meta Trader Platform. Other trading platforms that are gaining popularity include Sirix Web Trader and cTrader.
Commissions and Spreads
When trading currencies, it is crucial that you understand the costs involved. One standard practice of the Forex industry is not charging traders commissions on the trades they make. Hence, as a substitute for commission charges, Forex brokers widen the spreads that traders are expected to pay for the asset they choose to trade. Spreads can be fixed or floating. Typically, they range from 0.1 pips to 3 pips for the regularly traded currency pairs.
A trader will only be expected to pay a small commission for each trade made if they are dealing with Forex brokers operating with a Non-Dealing Desk (NDD) business model. Since the Forex market is a global market, French currency traders are highly likely to encounter the same trading conditions as traders from other parts of the world.
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Account Types and Deposit Methods
Forex brokers catering to the Forex market typically offer 3 types of trading accounts to their clients. These accounts are distinguished by the lowest lot size a trader can make.
- The Mini/Micro Account: These accounts allow traders to make smaller than the standard lot size of 100,000 units
- Standard Account: These accounts require traders to make trades based on the standard lot size
- VIP Account: This account is geared towards high net worth traders and professional traders. They come with a wide range of benefits, which normal traders are not able to access
Funding of any of these accounts can be done with eWallets, Bank Wire Transfer and Credit Cards
When choosing a trading platform, make sure that funding and withdrawing your funds from an account can be done easily and in the shortest time possible. Different brokers have different payment options. To know a potential broker’s payment option, visit their websites for more information. Also, when looking for a trusted broker to trade with, it is crucial that you find out if they allow the withdrawal of Francs from your trading account. A good FX trader should have withdrawal option that includes Euros and most especially Francs.
One of the most important factors to take into consideration as a French FX trader is the level of customer service provided by a broker. First and foremost, their website should be available in French, and the customer service representatives should be able to converse fluently in French. Also, make sure that they have provided a localized telephone number to avoid high phone charges.
Seeing that the Forex trading industry is extremely competitive, FX brokers are always trying to add value to their products by providing additional services like VPS and free signal service. While often times these services are not essential, they can prove to be helpful at times.
Choosing the right Forex broker in France is not easy. Take all the time you need to review the different brokers available to you to choose a reliable one. Choosing a trusted FX broker is crucial as it ensures your money and trades are handled appropriately.
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