What It Takes To Identify A Good Forex Broker

Currencies / Forex Trading Jan 07, 2018 - 02:20 PM GMT

The retail forex market is extremely competitive and therefore the task of identifying the right broker is not an easy job to say the least. If you use the keyword and do a search on Google, you will most certainly come across scores of forex brokers. Each one of them would look the same and therefore you will often be confused and also be in a state of indecision as to whom to choose over the other. Unless you do your research properly and go through the right due diligence processes, it is likely that you will end up making the wrong choice. Choosing a wrong forex broker could be a nightmare for you and you could end up losing big money especially if you are new entrant without the best of knowledge about forex trading. Hence, we have put together certain important points and tips which if followed in letter and spirit could help you to make the right choice and avoid falling into a trip. We are sure the next few lines will go a long way in making a correct choice and will help fulfill the objective for which you have entered into this market. Though it may not be foolproof and complete in all respects, it certainly will cover the most important points and attributes to be kept in mind while hiring these professionals. So, without wasting too much of time, let us get started in having a look at some important characteristics and things which a good forex broker should have.

Are They Secure and Reliable

Since you will be staking your hard earned money when going in for forex trading, the onus lies on you to be sure that you are dealing with a broker who is reliable and has the required security attributes which are expected of him. They must certainly have good security level because each day thousands of traders could be parting with thousands or even millions of dollars with these trading brokers. There are many simple ways and means by which the credentials and security of the forex brokers can be found out. Each major country has a forex and commodity regular body. Hence, before signing up and opening a forex account with a broker, you must make sure that the broker is a part of the government regulatory body. Before even contemplating becoming a member, you must be 100% sure that the broker is a member of the various regulatory bodies of the countries concerned. Just by visiting the website of the regulatory bodies, you will be able to find out whether a broker is a member or not. If his not a member, you must immediately walk out of them and should not have any second thoughts on this matter.

Cost Of Transaction

Forex traders are there to make money by bringing traders under one platforms and helping them to buy and sell on foreign exchange currencies. Hence, they will certainly charge a transaction cost. Each occasion you enter into a trade; you will have to pay either a commission for the transaction or for the spread which you earn. Hence, it goes without saying that you must try and identify the right brokers who offer the best of rates at all points of time. At times you may have to sacrifice on transaction cost so that you are able to identify the right broker who is reliable and trustworthy. Further you also must be sure as to which sort of cost you would like to bear, commission based or spread based. It is a tightrope walk and you must try to find the right balance amount that is available. It comes with experience and expertise and of course by gathering as much knowledge as you possibly can.

Withdrawal and Deposit

When you choose good forex brokers they will allow you to do any kind of transaction easily and you will face very little or no problems at all. You must therefore always look for brokers who go out of the way and offer you the most convenient withdrawal and deposit options. They have no reason to make things tough for traders because they hold your funds only for the purpose of ease of trading. You must be sure that the brokers should make the entire withdrawal and deposit process very easy because time is an important attribute when it comes to successful trading in the forex market.

Trading Platform

The kind of trading platform which the broker offers is also of great importance. The software must be good and he must also offer useful tools to assist traders in their trading. For example most reputed and well known brokers offer something known as currency strength meter. This is a very useful and time tested tool. This is a single window information avenue from where it is possible for the trader to have a clear idea as to what is happening in the market at any given point of time. You must look for meters which offer live feeds instead of going in for feeds which could be even a few minutes late. As mentioned, timing is extremely important and therefore the strength meters which they offer must also be live as far as the information is concerned.

Execution

It is critical and even mandatory that the broker whom you choose helps you to trade at the best possible prices whether it is buying or selling. When the market conditions are normal there is hardly any reason for the brokers not to fill you at the closest possible market price as far as buying and selling is concerned. This would however, depend on certain factors like good internet connection because a few seconds difference could make or break the trading for the day. Therefore, this is a very important point which always must be kept in mind when choosing these professionals.

Customer Service

The kind of customer services offered by forex brokers often leaves much to be desired. Therefore, as a trader you must do the right research and only then choose a broker who can easily be contacted whenever needed.

By Kavinesh

© 2017 Kavinesh - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

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