Reliable Forex Broker
Are you baffled by the sheer number of options there is out there for choosing a forex broker?
There are dozens of major forex brokers to choose from and it can be very difficult to decide which one you want and which you should trust. A foreign exchange broker will affect every trade you make — and some brokers simply aren’t trustworthy or even legitimate.
Here are a few things that you can do to find the best and most reliable forex broker available…
Analyse Your Options: Reviews and Comparisons
How do you find a forex broker? A simple web search will give you a list of some of the larger foreign exchange brokers, but that doesn’t tell you about their quality and reliability. You need to look for reviews, comparisons, forum posts, and other third-party information regarding those brokers; don’t just trust the information that is presented on their website.
Searching for “forex broker comparisons” or “forex broker reviews” will give you a thorough overview of the different brokerages available and what their benefits and drawbacks are.
Always look at sources and those who leave the reviews/comments/comparisons with a skeptical eye. Many of the less legitimate foreign exchange brokers (and recognised brokers for that matter!) will put up fake reviews in an attempt to draw people in and put out positive PR. Some brokerage firms will even hire people to write reviews all over the Internet that appear to be honest.
You can usually determine a fake review in a few ways: they will all be fairly similar, the reviewers will have only posted one review on the site, and they won’t mention anything negative about the particular forex broker at all. By the same token, remember that unhappy or inexperienced traders can write bad reviews just because they themselves had a negative trading experience. Bad reviews in and of themselves don’t necessarily indicate a bad broker.
What to Look For in a Reliable Broker
Nearly every reputable forex broker out there will let you open an demo account to test and practice on. This lets you see whether that broker is the right one for you. Here are a few other things that you should be looking for:
- Currency Pairs. Most reliable brokers will carry all major currency pairs. However there are strategies that bank on trading less common currency pairs. If so, you need a broker that supports them. Only some bigger brokers support the more exotic pairings.
- Spreads. The lower the spread you can get, the better. Spreads are essentially the fees that you’re going to need to pay on a per transaction basis; it’s an amount added on to the current trading value of the currency. This should be a major factor in your decision making to choosing a broker.
- Leverage. Leverage is the amount of power your money has. A 10:1 leverage means that each dollar is worth ten. You don’t necessarily need the highest leverage: high leverage accounts can even be dangerous for a new investor. Nevertheless, it’s something to think about — having that leverage available is extremely useful.
- Minimum Deposit. How much money do you need to get started? Different forex brokers will have different minimum deposit requirements, so you need to make sure that the broker you’re selecting will let you open an account.
- Latency. The forex market moves incredibly fast. Is your broker able to keep up? Test a brokerage with a practice account to see how quickly trading is actually initiated. For certain trading strategies this can be extremely important. You need a broker who can offer you a reliably fast trading experience.
- Technology. Your broker should support multiple platforms for trading. Many of the leading brokerage firms have apps in addition to web-based platforms. You’ll have to access your brokerage from a variety of locations, so trading with a broker who caters to you technologically, is essential. The MetaTrader 4 is a very popular and super flexible platform to get started with.
- Support. How can you contact support? When is support available? Ideally you should have 24/7 support available and should be able to contact them directly via phone, email, or instant live chat. Additionally, thorough documentation should be available, for everyone from beginners to more advanced traders. The level of support, and quality of support they offer will play a big factor in your trading.
Avoiding Bad Forex Brokers: Signs to Look out For
Some brokerages are just bad. They’re designed to drain money from you from every trade, which can ultimately sabotage even the most successful of strategies. These brokerages could also potentially disappear from the scene entirely.
Here are a few things you should look out for to avoid bad brokers:
- New brokers. New brokers aren’t necessarily scams but they have less activity to judge them upon. A reliable/good broker should have at least a couple of years of experience within the industry. It’s better for those new to forex to stay with more established brokers.
- Scam reports. Search for the name of the broker plus the word “scam” or “review”. If you see a lot of scam reports and bad reviews, you may be dealing with a bad broker. Do remain skeptical though, because some reputable brokers can have their reputation damaged by competitors.
- Hidden fees. If you’re going through a sign up process and you see the fees accruing, you know that the broker is simply trying to get additional money from you. This isn’t going to stop; you’ll be seeing more fees down the line.
- Urgent deals. Is the brokerage offering you more leverage if you sign up in the next 24 hours? Is everything on their site geared towards getting you to sign up immediately? Brokers only use these tactics if they are trying to hook you before you’ve done your research: for instance, sending you a pop-up ad once you leave their site. Good brokers simply don’t need to resort to these tactics because they get their customers through word of mouth and quality of service.
- Bad support. If customer support is slow to respond or rude to you, you already know that you aren’t valued as a trader. If you run into serious issues down the line, it’s likely that you won’t have anyone to turn to. It’s better to go with a better supported broker even if fees are slightly more expensive. Try to contact support when signing up for an account to test out how well they support you.
Finding a Reliable Broker is Essential
Finding the right broker is absolutely essential to your success as a trader. Your choice of forex broker will have an impact on every trade you open and close, and will be able to contribute to your financial gains through technology, support, and low overheads. The good news is that there are many reputable and responsible brokerages available, you just need to find the right one for you.
Try reading: Why Forex Trading is Ever-Growing in Popularity
Remember that in all things, if it’s too good to be true, it usually is. Brokerage scams tend to bring in new investors by offering “too good to be true” promotions and deals. In trading, it’s good to be greedy — but only to a certain extent. Do your research and you should be able to protect yourself on this vital first step towards a profitable trading venture with a reliable forex broker.