Beginning Forex trading carries with it several important decisions that we must make as we go about investing our money. One of the most essential factors that we must consider is the forex broker since to operate in the forex market we must use a forex broker.
A broker to be reliable must provide a sense of absolute security so you can operate online with total comfort that our money is in good hands. In this sense, it does not serve a middle ground since it is our money that is at stake, and to make trading with total confidence we must ensure that the forex broker we use is legal and reliable.
Signs that a forex broker is reliable
To verify if a broker is reliable we must investigate and look at the following aspects:
- Offer everything you need to start trading safely
In a world as versatile as the trading world, immediacy is essential. In Forex, things can change in just a few seconds, and that can be a determining factor in whether a trade is successful for us or not.
However, unreliable brokers take advantage of this need for immediacy to encourage you to rush into investing without considering that you have the necessary guarantees to trade properly.
A reliable broker aims to provide you with the best possible environment so that you feel comfortable and secure in every trade you make. To do this, it should be simple and easy to open an account as well as have access to a demo account to practice and test all the tools before trading with our money. Besides, legitimate brokers also provide expert advice to guide you in which account type is best for you.
Clarity from minute zero and throughout the process.
- It has customer support and trading support tools
This is an aspect we should not take lightly. Every good broker who prides himself on being one should have the ability to address the doubts that traders have, concerning aspects such as the management of their platform, mobilization of funds, account types, among other things.
Certain brokers, especially those who are just starting in the market, neglect customer service, with respect to not offering various resources available to provide support service (they only offer live chat, for example), or are slow to respond when it comes to email queries.
A good forex broker should offer 24/7 customer service, or close to it, and also have as many resources available to traders (video chat, email, traditional telephone consultation, among others) and such resources should be available in languages that represent the majority of the Forex market.
Be assured that dubious and fraudulent brokers care little or nothing about having really efficient customer support. We should get away from them as soon as we can.
On the other hand, a trader owes it to his tools, to his sources of consultation, and visualization of the investments that allow him to manage his operations effectively. A broker cannot be considered reliable if it does not have the best tools, as is the case with the Metatrader 4 (MT4) platform, which is by far the most widely used by global investment professionals.
- Maintains tight spreads and fast ECN execution
A forex broker is little or not at all useful even if it is legitimate and reliable if at the time of starting a trade that we believe can leave us a good profit, is spoiled or change the values by a delay in execution which can cause us to lose a great opportunity.
This type of execution problem does not have a great impact on cryptocurrency investment tools such as bitcoin since its high valuation ensures that its value will not change volatile in seconds while we perform the operation until it becomes effective.
However, delays in execution can affect our operations in more volatile instruments that can change the value in a short time, causing our profits to be lower or even causing us to have losses. Therefore, do not trust or use a broker that does not guarantee fast and efficient execution.
- To strictly follow Forex regulations
Several entities regulate the operations of brokers and ensure that they are legitimate, reliable, and secure. Trading with a broker who is not regulated or whose situation is irregular is a high risk for our money since there is no guarantee that our money is safe. Besides, it is also advisable to avoid those brokers whose physical headquarters are located in countries known as tax havens because if there is any inconvenience with our capital, the chances of recovering our money are very low.
Therefore, brokers adjusted to Forex regulations are the best option. To know if a broker is properly regulated you can investigate on their website, commonly in the section “about us” is this information. Also, the most recognized brokers publish their registration number, address, and telephone contact, so investors can know all the information about the company. In case this information does not appear on the website, you can contact customer support and ask about whether they are regulated, and by whom.
The regulatory entities are:
- CySEC (Cyprus)
- FCA (United Kingdom)
- NFA and CFTC (United States)
- ASIC (Australia)
- CNMV (Spain)
- BaFin (Germany)
- BAPPEBTI (Indonesia)
- Absolute Transparency
Above all, a reliable broker will never hide information about how he operates, his contact information, registration number, regulatory certificates, let alone the opinion of his users.
If you enter the broker’s website and do not get this information, it is a sign that something is not right. The main thing to trust a company that will have our money is that it is transparent with us and does not hide information from us.
- Personal recommendations
Nowadays, many people are interested in this world of Forex because some friend or relative is a trader and has told them about it, and what better way to ensure that a broker is reliable than the recommendation of a relative/friend who already has experience in this market. Without a doubt, he/she will be able to guide you and recommend a reliable and secure broker.
Conclusion
The points we have mentioned in this article are essential factors that a broker must have to be reliable and legitimate. If there are faults or irregularities in any or several of these elements, it is recommended that you look for another forex broker that provides you with all the guarantees and tools necessary to operate with total peace of mind.