Business • Forex
How To Choose A Forex Broker In 2020
Given the current situation of financial instability, people are increasingly trying their hands on the foreign exchange market to make good money. Forex is by far the largest financial market in the entire world, but there is no central exchange where Forex traders can carry out trading activities. That is the reason why Forex brokers like Avatrade are there as an intermediary platform where they can trade.
However, it is not that easy to choose the right Forex broker because there are at least more than a dozen of them available today. But, you primarily need to choose the right broker who has their rules and regulations in place to make trading an easy and transparent affair for you.
Wondering how to find a reliable forex broker?
Well, here are some of the most vital aspects to guide you for a proper selection.
A broker has to be a regulated body and that too by a competent and authorized agency. When you deal with a broker who is regulated, you can rest assured that the broker ought to follow the standardized rules and regulations laid down by the regulatory agency. The standard rules include: having required capitalization and maintaining separate safe accounts to safeguard the fund of the clients. Some additional benefits are there such as, if the firm is at the risk of getting bankrupt, then the broker is responsible for providing total fund protection for the client. So, a regulated broker is not going to turn out to be a fraud, in fact, your investments will be safe with them as they ensure stringent technical security through end to end encryptions and so on. Countries with financial regulatory agencies having the backing of strict regulatory enforcement are; Australia (ASIC), India (SEBI), Japan (FSA and JSDA), USA (CFTC and SEC), Eurozone (Mifid and local regulators), Switzerland (FINMA), Canada (IIROC and CIPF) and UK (FCA). To be on the safe side, read genuine customer reviews on reputable portals because these portals ensure real customer reviews with proper information backed with evidence such as screenshots or links, and so on.
Different brokers have different rates, some deduct a hefty amount on the net profit that you make including the transaction fee, while some deduct less. Before choosing a broker, you must find out the rates and see trading with which agency will be more profitable for you. If need be, you must compare the brokers and their trading terms and conditions critically to make the right decision. Some vital factors that you must look for are: – the rate of commission, fees, account types, spreads and swaps, rollover fees, how fast the order is getting executed along with the policies, different margins, and so on. These factors are so crucial that they can either be very profitable for you in the future or can eat away a large part of your profit. Thus, take these matters into serious consideration.
You need to choose a reliable platform. Mostly, third party trading solutions like MetaQuotes Software control these trading platforms. A reliable broker must provide its clients with a range of trustworthy platforms to choose from. Always go for a broker who will provide platforms like MetaTrader 4 and MetaTrader 5, and the web version of the platform needs to be available too to make sure that you can easily handle it on a browser. The specialty of these well-known terminals is that they are easy to handle, safe, and have tools, indicators, expert advisors, etc. so that you can carry out a range of functionalities using different tools or programs, etc.
Some brokers don’t use third-party trading solutions. As a matter of fact, they design their proprietary platforms. Most of the time, these proprietary platforms can turn out to be the best ones for those who trade because these are designed specifically for the client base of the broker. The proprietary platforms also allow traders, who are always on the go, to trade from any given device just the internet connection is needed.
Then again, there are social or copy trading platforms, the concept of which is just like the social media model. This model will allow you to follow and see the activities of your favorite traders. Some believe that this way, you are actually using the wisdom of other experienced traders to improve your trading. Copying the moves and following the trading tactics can help you achieve a lot because several trading platforms provide room for strategy analysis and so on. The knowledge and the insights facilitate you to cultivate the ace trader in you, and you save money by not having to enroll in professional courses. New traders these days like social trading platforms quite a lot.
Resources for Traders
If you are a beginner, you will need a lot of knowledge and education. Some brokers provide helpful study materials for free so that you can enhance your skills and depth of knowledge. These might include chapters, videos, webinars, semi-live events, guides, articles, and several invaluable courses on different topics on trading.
You will find some brokers who will also provide demo-accounts for you so that you can hone your skills by doing paper trading as much as possible.
Customer service is a vital factor that you mustn’t ignore. Check whether or not you can contact the customer service team via mail, phone, live chat, and so on because, god forbid, if you face a technical problem, you must be able to get hold of them. You don’t have to spend days and nights worrying about whether your problem is solvable or not.
When the world of trading opens up to you, you will find hundreds of brokers, and you might get confused, but as a novice trader, you must always look for less complicated ones. By less complicated, we mean a platform that is user-friendly and comes with less complicated strategies. Later on, you can upgrade yourself based on your rate of development, but for starters, it is better to stick to platforms that are simple to handle.