How to choose the best forex broker?
If you are actively trying to find or choose the best forex brokers in the market, you must already know it’s not easy to find the best forex broker. Because ‘Best’ in Forex is defined by its own terms and not necessarily by the quality of service which almost every so-called “top forex brokers” willingly provide.
What makes the situation even worse is that a majority of novice forex traders don’t even know the consequences of trading with supposedly the “best forex broker”, who eventually turns out to be just a reverse market trader. Do you know what that means? It means many novice traders are running a race they can never win.
Now you want to know how to make a shortlist of best forex brokers. Dealing desk brokers act as another entity between your trades and the actual market. So, dealing desk brokers have full control over your positions.
Unlike other financial markets, forex does not have a central body to regulate rates and data. This makes forex a truly dynamic market which provides talented investors a nice opportunity to thrive. But, and this is a huge ‘BUT’, this very nature of the forex market is being heavily exploited by few greedy brokers to profit at the expense of unsuspecting innocent traders.
Just because a broker claims to be a non-dealing desk, does not necessarily mean the broker actually operates in a non-dealing desk environment. Do everything within your reach to verify that your list of best forex brokers includes only non-dealing desk brokers.
Do you need a simpler solution? Use ECN forex brokers. If you are still in the phase of choosing the best forex broker, then you probably are new to forex trading. Top forex brokers who offer genuine ECN forex accounts may demand relatively higher initial deposits for ECN accounts. So smaller forex accounts in ‘micro’ or even ‘standard’ sizes, usually will not be offered as ECN accounts, even if the broker is an ECN forex broker.
There are many sorts of Forex brokers, sometimes it is a bit difficult to choose from. How to find the perfect one for you is the big question. Depending on the requirements, there may be different forex brokers suitable for different people. So let’s find out
MOST IMPORTANT FACTORS TO CHOOSE THE BEST BROKER
Forex broker regulation provides trust to entire them. The reputable forex broker will be regulated with trustable organizations to provide good service and security.
It is very important to choose the best broker. If a forex broker offers modern trading platform then a trader can start trading easily and could make some profit. The trading platform like software, software update version obviously offers an update and new features? So a modern forex trading platform is important.
Forex trader faces a lot of problems and can be confused for harder terms and conditions. So traders need good customer service.
If you are looking to trade with the best forex broker, you must consider of payment method when you chose a broker. Among other things, you must give some thought on funding and withdrawal options they have to offer. Is possible to link to a local bank account directly, or other common payment methods has or not for funding purposes. You might want to browse through forex brokers who offer VISA, DEBIT, CREDIT and MasterCard, Skrill, Netteler, PayPal, etc.
It’s one of require option to choose a good forex broker. What things you need to trade? Of course a trading account and good platform. You have to look what accounts the broker is offering, trading opportunities with the account, trading fees, services, funding time, trade execution time etc.
OTHER CRITERIA TO CHOOSE THE BEST FOREX BROKERS
Most forex traders, trade only a handful of currency pairs. Over a certain period of time traders tend to stick to one or two pairs they are most comfortable with. Also, each trader will have unique comfort zones with regard to minimum deposit, leverage, minimum lot size and spread amount, etc.
Minimum Deposit Amount – This does not indicate anything about the broker. It’s totally a personal thing, but there is no point in trading with a forex account with less than $1000 as an initial deposit. If you have traded a similar account first up, you will know why.
Maximum Leverage – When it comes to leverage, less is more. Because low leverage reduces the losses when you lose trades. Again, this has nothing to do when you decide upon the best forex broker for you to trade with.
Spread – Real non-dealing desk and ECN forex brokers simply cannot operate with fixed spreads, because fixed spreads by nature are against the philosophy of non-dealing desk environment.
A number of pairs – Number of instruments or currency-pairs supported, do not say anything about the integrity of the forex broker. Instead it’s just a reminder that you are choosing a forex broker with long term trading plans in mind. So make sure all top forex brokers in your shortlist support all the instruments you want or you may want to trade in the future.
Knowing how to distinguish the best forex brokers is one thing. But when you actually go about doing it, there are many difficulties faced by new traders. There is no such entity as a perfect forex broker. In other words, best forex brokers don’t exist. So, you’ll have to stick with the next best choice for a better brokers.
Last but not least, top forex brokers have the approval from financial regulators from major countries, in order to be able to operate in those countries.
All in all hunting for the best forex broker is no easy task. One thing you should avoid though is to open a dozen demo accounts with every top forex broker who made it into your shortlist. Because if you do, it will only complicate things even more.