Monday, December 11, 2023
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How to select a forex broker

Dominic Lill ,  ,  ,  , 

Currently, the foreign exchange market totals $4 trillion in average, which represents the daily traded value.

If you think about the fact that there is no central marketplace for this forex market, then you can tell that traders need a forex broker to guide them in trading. However, the catch here is to find an excellent professional. But how can you choose the best forex brokers UK?

forex broker

Regulatory compliance

If we’re talking about the US, you know that a forex broker is good if he is registered with the US Commodity Future Trading Commission (CFTC). As such, he is a Futures Commission Merchant, as well as a Retail Foreign Exchange Dealer. Moreover, he is also a member of the NFA (National Futures Association). You can check the NFA number on the broker’s website.

Account details

There is an entire list of things you have to pay attention to when choosing a broker. Each of them offers various things, and you have to keep an eye on all of them:

  • Leverage and Margin – You have access to various leverage amounts, depending on what broker you choose.
  • Commissions and Spreads – See what percentage of the spread does the broker charge and what is the difference between the bid and the price of the forex pair. Moreover, ask if they charge any commissions.
  • Initial Deposit – Lots of brokers offer standard, micro and mini accounts, which have various initial deposit requirements.
  • Ease of Deposits and Withdrawals – There are specific such policies for each broker, so you have to be informed beforehand.

Currency pairs offered

There are indeed various currencies available for trading, but only a few of them get most of the attention and are most liquid for trading, such as USD – JPY, EUR – USD, USD – CHF, GBP – USD.

Customer service

Trading with Forex takes place 24/7, so you should enjoy support all the time. What’s more important though is to have access to a real life person, and not an automated machine, since people can react faster and make decisions that are appropriate for the situation you are encountering. Just give your broker a call to see how do they manage a situation, if they are really interested to help you and what is their general attitude.

Trading platform

This refers to the portal the investor has to the markets. Consequently, you should make sure that their platform or the software they use are quite easy to understand and to use overall. Moreover, check if you can easily enter and exit the trades or if you are familiar with the fundamental analysis tools. Normally, any platform should offer obvious buttons for buying and selling. Some of them even have a panic button, which closes all open positions.