How to choose a trusted & reliable Forex broker?
A Forex Broker acts as a mediator between you and the Forex market which is why you need to be very cautious about choosing the right broker. There are many Forex Brokers out there, more so than before, due to the ever-growing nature of Forex. When you decide to go with a certain Forex broker, the reliability and trustworthiness of that broker should be at the top of your checklist. A Reliable Forex Broker ought to be qualified from several perspectives, as listed below:
Is your Forex Broker fully regulated?
The regulation is one of the key factors to consider before anything else. You cannot entrust your funds to any random Forex Broker that you come across. It is imperative to thoroughly investigate the FX Broker of your choice in terms of safety, security, and reliability by simply taking into account which supervisory authority oversees their overall financial activities i.e., an administrative body which regulates Forex brokers in the interest of the public. Regulated Forex Brokers are required to be financially stable, provide segregated accounts for their customers, offer proper pricing, quality order execution, and most importantly ethical and fair business methods.
It's better to make sure that the chosen Forex Broker is headquartered in a country where a certain regulatory body enforces laws and regulations; for instance, the CySEC of Cyprus, FCA of the UK, ASIC of Australia, IFSC of Belize and other relevant authorities. Working with a Forex Broker that is not regulated and answers to no authority could put you at financial risks. A non-regulated Forex Broker is not under any obligation to process your transactions, give you the correct required charts or data, or support you in any way. Additionally, if you choose to work with an unauthorized broker, you do so at your own risk, and can't redeem your losses or officially complain to authorities since they are not members of a compensation fund scheme or any organization of that kind.
Forex Broker's Customer Support
The quality of a Forex Broker's Customer Support says a lot about them. The services that you require from a Forex Broker need to be available at all hours (24/5) considering the level of activities in the FX Market. Customer support should be within your reach via various methods including email, live chat, and phone calls just to make you more comfortable. The support staff has to be well-informed and well-mannered to answer all your questions and guide you to the best of their knowledge, so you'd know if you can count on them when a real problem occurs. You can check their overall response time and effort through live chat to see how they approach your questions about spreads, leverage, regulations, or any other details that you want to know. They should listen to your concerns patiently and offer their support to address your needs. Otherwise, you need to go to another Forex Broker whose support department would help to make your trading experience all the more rewarding.
An active Forex Broker in your region that offers support in your local language could be very helpful, especially if you are not very good at English. This also means that you will receive the best support to face your problems faster.
Various Trading Accounts and Conditions
Forex Brokers that offer different trading conditions and trading accounts such as Standard, Micro, Mini, ECN, and Demo (for practice) do not limit you to a few choices, and with them, you can select an account type that fits your trading needs. So you can choose a trading account based on the trade volume, spread, commission or any other aspect that you're comfortable with. New traders and low depositors usually go with a Micro Forex Account in which they can trade in smaller sizes. Those who can afford to invest more capital, particularly skilled traders, choose the Standard Account. In Micro and Standard accounts, the traders are only required to pay a spread fee which is either fixed or floating depending on the Forex Broker. ECN Forex Brokers provide their customers with the best buy and sell prices which they have acquired directly from the interbank market. ECN accounts come with low and floating spreads but for every transaction that you make a commission will be charged.
Spread, Commission, Leverage, and Order Execution
Forex traders are required to pay a spread - the difference between the Bid and Ask prices - to their Forex Brokers. The spread is offered either as fixed or floating which can be chosen according to your trading requirements. The fixed spread, as the name suggests, stays the same regardless of the size of your trade. The floating spread, however, changes with the market movements and is usually offered as low as 1 pip. So you need to consider which spread type fits your trading strategies and choose accordingly. Forex Brokers earn a profit by charging a spread for the clients' transactions. Some Brokers charge higher spreads to earn more money while others offer lower fees for their services to attract more customers. Dealing Desk Brokers (Market Makers) set the spread price for every currency pair ranging from 2-3 pips. Forex traders are always looking for the lowest spread Forex Brokers in order to reduce their own trading costs.
Forex is known for its high leverage, and there are Forex Brokers who offer high leverage ranging from 1:50, 1:100 or even as high as 1:3000. Aggressive traders tend to use leverage at its maximum level and take bigger risks, cautious traders, on the other hand, might want to approach leverage more carefully to stay on the safe side.
Another important issue is the speed and quality of order execution, especially for scalpers, EA users, and those who trade more often. Moreover, Scalpers are more interested in ECN Forex Brokers through which they can receive better and friendlier trading conditions including the lowest spreads, no re-quotes, and ultra-fast order execution.
Offered Trading Platforms
The offered platforms come in various forms such as desktop, web-based, and mobile-based. Traders can choose a suitable platform according to their trading requirements. The most commonly used trading platform in Forex is MetaTrader 4. You should be able to depend on your trading platform not to lag or completely crash during your trades, particularly when an important event happens, or a global economic surge hits the news. A reliable trading platform guarantees that you won't miss your chance to make a trade because of some unexpected errors. A trading platform must be easy to use so you can trade or close an order within seconds without any difficulties. A reliable trading platform should have the necessary features such as one-click trading, stop-loss management, setting limits, and handling various order types.
Forex Broker's Deposit and Withdrawal Methods
Every Forex Broker offers somewhat different deposit and withdrawal methods to its clients. Ideally, you need a broker whose payment systems are user-friendly, fast, and secure. Traders can now fund their accounts via Bank Wire and Credit Cards (Visa, Mastercard, etc.) at many Forex Brokers. Forex Brokers also accept online payment systems including WebMoney, Skrill, Neteller, FasaPay, Bitcoin and PerfectMoney because of their speed, ease of access, and worldwide popularity. Funding time in Bank Wire transactions is usually up to a few business days, while with online payment systems, deposits and withdrawals are processed very quickly (Deposits are made instantly and withdrawals in few hours or within a working day).
Moreover, Forex brokers that are active in specific regions may accept funding via local banks. For example, the clients from Malaysia are able to use their accounts with the local Malaysian banks as a depositing method directly from their personal cabinet. In this way, traders can fund their Forex account faster and easier withdraw the funds (e.g., any earned profits) to their local bank account (in Ringgit).
