Sorting through and choosing from a wide array of options isn’t easy, especially when you have no clear idea of what you really need. This is all the more true when it comes to zeroing in on a suitable broker for trading in forex. Here we’ll attempt to arm you with a few tips regarding what to watch out for while hunting a broker forex trading:
1. Security Offered
The first and foremost concern of yours should be security. In other words, check if the broker you’re hiring is really worthy of your trust. In order to avoid being defrauded out of your valuable money, do a thorough background check on your broker, especially whether they’re a member of the market regulating agency of your country, e.g., the CFTC in the United States and PRA of the UK.
2. Cost of Transaction
Transaction costs are a given in forex trade. You have to spend on forex spread, or you have to spend on a commission. So you would without a doubt look for cheaper rates and might sometimes end up foregoing lucrative offers of low rates to pursue a trustworthy broker.
However, this is something you cannot afford if tight spreads are a necessity for your trade. Therefore, you should keep that in mind while evaluating broker costs.
3. Ease of transaction
A genuine broker will make the depositing and withdrawal processes hassle-free for you. That’s one of the hallmarks by which you would recognize a genuine broker and differentiate it from a fraudulent or greedy one.
4. Convenience of the platform
The online trading platform of the broker is another place to watch out for while taking a call regarding a brokering choice. Make it a point to check if it has options such as free and live market news feed, easy to use charts and tools, and if the ‘stop loss’ options are well-specified. In short, see whether it is comprehensible, hassle-free and convenient for you to use.
Your broker should always fix you for the best possible price that can be mustered under normal market conditions. That is, he should peg your trade for a price that is closest to the price displayed when you clicked the ‘buy’ or ‘sell’ button. E.g., if you click “buy” on an amount of denomination USD 2.500, then that’s the price you should get filled at, or at least very close to it (assuming no major change, events or announcements have taken place which can affect the market). Also, the speed at which your orders get filled is something you should watch out for.