CHOOSING A BROKER
When looking to trade the financial market a new trader is often overwhelmed with excessive advertisement, or recommendation from online forums as regards to a broker to choose. In this article, we are going to highlight the most important things to consider when choosing a forex broker. So, we expect you to pay attention as this will really help you in starting out your journey.
1.ARE THEY REGULATED?
This is the most important thing to put into consideration as this gives trader a feeling of protection. Forex broker regulations are measures taken by different governmental agencies in the respective countries where these brokers are located to pay close attention to what these brokers are doing with their clients’ money, hence establishing stringent policies upon which these brokers must obey before they can be issued a license of operation.
However, it is important for all new traders to consider if the broker they are willing to use is regulated or not to ensure proper safety and handling of their money by the broker. Perhaps, it is important for us to mention some of the countries with the stringent forex regulation policies,theseinclude; the UK, United states, EU, Australia and Japan. UK for example goes as much as offering deposit protection insurance meaning that even if your broker goes bankrupt the government will refund your account balance.
2.ARE THEY ECN OR DEALING DESK?
Electronic communication network brokers often referred as the ECN brokers allows retail traders connect directly to market liquidity upon execution of their trades giving traders a fair and more transparent dealing. Dealing desk brokers on the other hand employs the service of a middle man which often lags trader’s execution. Generally, every trader wants a fast, transparent and fair execution of their orders without any lag thus prefers a broker that offers them the opportunity to which is the ECN brokers.Typically, the ECN broker charges lesser spread, with a commission charge upon every trade execution and in return give traders confidence of no manipulation upon their trade execution.
3.PRODUCTS THEY OFFER:
You need to know if the brokers you are willing to sign up with offers the market you need to trade. Some brokers offer just only few currencies while some others offer a wide range of currencies or exotic pairs to trade. So, it’s ideal for you to figure if they offer the market you are willing to trade before signing up with them.
4. CFD’S THEY OFFER:
It is important to know if the forex broker you are willing to sign up with allows CFD. CFD’s such as indices or crude oil are good market opportunities for traders to earn from as well, however some countries like the United States don’t allow small margin CFD’S trading except you trade with an entire contract so if you wish to trade the CFD’s it’s ideal to consider a broker that allows it.
As a general rule you should feel more comfortable with a broker that has been around for a whileas thisindicates they have successfully been ticking the boxes of their regulators and haven’t been found breaking rules or manipulating their operations to the detriment of their client capital. So, it is essential to go online and search for reviews and people’s opinion on their experiences with them.
6. CUSTOMER SERVICE RESPONSIVENESS:
This is a key thing to consider before signing up with a broker. You don’t want to sign up with a broker which takes forever to reply to your queries or enquires as there are going to be days in which you have issues as regarding the broker services and you want to rectify as fast as possible, so before you sign up and deposit into a broker, check out for reviews on their customer service response and sign up with the one that responds swiftly to their clients and attend to their clients urgency.
Extras such as free webinar, free education, deposit bonuses may be considered as well if you are looking out for that. Some brokers offer free webinars to help their clients understand the financial market better also some brokers offer very good free educational contents with the aim of helping their clients trade better. Some brokers also offer deposit bonuses to provide leverage for their clients so if you are considering features like this then you should pay attention as regards to if they offer this before you sign up into the broker.
In conclusion, before choosing to sign up and deposit with a forex broker, the ultimate need for any trader is to know if their money is safe with the broker, and allow if the broker allows them access into a wide range of market and of course good customer service relation. So before you sign up to deposit into a broker make sure you consider this key things highlighted above as its really going to help you choose the right broker that works perfectly for you.