The retail forex market is so competitive that just thinking about having to sift through all the available brokers can give you a major headache. Choosing which forex broker to trade forex Broker can be a very overwhelming task especially if you don’t know what you should be looking for. In this section, we will discuss the qualities you should look for when picking a forex broker. Security The first and foremost characteristic that a good broker must have is a high level of security.
Fortunately, checking the credibility of a forex broker isn’t very hard. There are regulatory agencies all over the world that separate the trustworthy from the fraudulent. Before even THINKING of putting your money in a broker, make sure that the broker is a member of the regulatory bodies mentioned above. Transaction Costs No matter what kind of currency trader you are, like it or not, you will always be subject to transaction costs. Every single time you enter a trade, you will have to pay for either the spread or a commission so it is only natural to look for the most affordable and cheapest rates. Sometimes you may need to sacrifice low transaction for a more reliable broker. Make sure you know if you need tight spreads for your type of trading, and then review your available options.
It’s all about finding the correct balance between security and low transaction costs. Deposit and Withdrawal Good FX brokers will allow you to deposit funds and withdraw your earnings hassle-free. Brokers really have no reason to make it hard for you to withdraw your profits because the only reason they hold your funds is to facilitate trading. Your broker only holds your money to make trading easier so there is no reason for you to have a hard time getting the profits you have earned. Your broker should make sure that the withdrawal process is speedy and smooth. Trading Platform In online forex trading, most trading activity happens through the brokers’ trading platform. This means that the trading platform of your broker must be user-friendly and stable.
When looking for a broker, always check what its trading platform has to offer. Does it offer free news feed? How about easy-to-use technical and charting tools? Does it present you with all the information you will need to trade properly? Execution It is mandatory that your broker fills you at the best possible price for your orders. 3000, you should get filled at that price or within micro-pips of it.
The speed at which your orders get filled is very important, especially if you’re a scalper. A few pips difference in price can make that much harder on you to win that trade. Customer Service Brokers aren’t perfect, and therefore you must pick a broker that you could easily contact when problems arise. The competence of brokers when dealing with account or technical support issues is just as important as their performance on executing trades.
What is a Spread in Forex Trading? Which Type of Analysis for Forex Trading is Best? Victory belongs to the most persevering. We introduce people to the world of currency trading, and provide educational content to help them learn how to become profitable traders. We’re also a community of traders that support each other on our daily trading journey. The first step in choosing a forex broker is finding out what your choices are. You don’t just walk into a restaurant, knowing what to order right away, do you?
Not unless you’re a frequent customer there, of course. More often than not, you check out their menu first to see what they have to offer. Dealing Desk brokers are also called Market Makers. What is a Dealing Desk Broker? Dealing Desk brokers literally create a market for their clients, meaning they often take the other side of a clients trade.
While you may think that there is a conflict of interest, there really isn’t. Also, clients of dealing desk brokers do not see the real interbank market rates. The competition among brokers is so stiff that the rates offered by Dealing Desks brokers are close, if not the same, to the interbank rates. USD for 100,000 units with your Dealing Desk broker. To fill you, your broker will first try to find a matching sell order from its other clients or pass your trades on to its liquidity provider, i.
By doing this, they minimize risk, as they earn from the spread without taking the opposite side of your trade. However, in the event that there are no matching orders, they will have to take the opposite side of your trade. Take note that different forex brokers have different risk management policies, so make sure to check with your own broker regarding this. What is a No Dealing Desk Broker? NOT pass their clients’ orders through a Dealing Desk. This means that they do not take the other side of their clients’ trade as they simply link two parties together.