The most important step before start forex trading is to choose best forex broker that is fully regulated and well reputed in the world of forex. If you are facing difficulties to find best broker then don’t worry you are at right place, here you will get complete guidance for choosing the broker. There are different types of forex brokers like dealing desk, non dealing desk, ECN and STP but you have to choose one of them that is best for you and your capital. The selection of best broker may be hard and it may take time but it is important for you because you are going to invest your hard earned money. To make is easy we are sharing some tips that can help you to find top rated forex brokers.
Table of Contents
Key Steps to Choose Best Forex Broker
These are some key points that you should keep in mind when you are going to choose best forex broker.
Regulation and Security
Because you are going to invest your capital and you need security of your funds so stunning and animated beautiful website is not a guarantee of good broker. Broker that you are going to choose should be regulated with any well reputed authority. Some major and well known regulatory authorities are: FCA, NFA, CFTC, ASIC, SFBC, PRA, AMF, IIROC etc. You can find these information’s in ‘about us’ page of broker’s website. If you are trading in US then broker should be a member of NFA (National Futures Association) and and registered with CFTC (Commodity Future Trading Commission)
Funds Deposit and Withdrawal
You should see which type of payment methods are offered by broker that you are going to choose. Payment method should be available in your country to avoid any difficulties in future. Deposit and withdraw of funds should be instant and easy. Transaction fee for withdraw should be low and affordable.
Type of Broker
What kind of broker you are going to choose for forex trading? There are different types of brokers like dealing desk and non dealing desk. Non dealing desk brokers with ECN account are real brokerage house because trader can trade in interbank market through ‘Electronic Communications Network’. You should market maker brokers and try true ECN Broker. Non dealing desk brokers earn their profit from commission only. You can read full detail about dealing desk and non dealing desk brokers here.
Different brokers offer different account type when you register your trading account. Open account carefully after reading your broker’s terms and conditions because some of the account types may have some restrictions. It also depends on your initial deposit and account size. Mostly you will find different initial deposit requirement in different account types. These account types differ from each other according to initial deposit, spread, commission and leverage, depends on brokers. Most of the retail traders use mini accounts and ECN (Electronic Communication Network) accounts mostly used by those who want to trade in direct interbank market.
Leverage and Margin
All Forex brokers offer different leverage to their clients so traders can trade with higher margin. For example if you have $100 in your trading account and your broker offer you leverage of 1:100 then you have margin of buying or selling $10,000. But you should be careful and don’t select higher leverage because higher leverage can be dangerous for your account. With higher leverage you can place order with big lot size, in this case you have higher chance of both profit and loss. In simple words when you are looking to choose best forex broker you should notice what leverage is offered by broker. Recommended leverage is 1:100 to 1:200 with $1000 balance, higher leverage is not recommended for account safety.
Trading platform means trading software of terminal that use for buying or selling currencies. Trading terminal also known as metatrader 4, It should be easy to use and user friendly for all type of traders. There are many types of platforms that widely use in trading are: metatrader 4, metatrader 5, mobile trading app, c-Trader, web terminal and social trading. Platform provided by broker should have all necessary and basic tools for analysis.
Very important step in choosing best forex broker is that your broker should be with you in any difficulty. If you face any issue regarding your account, terminal or any other and you contact with your broker regarding your issues, broker should quickly response and resolve your issue. Some time it is experienced that many brokers contact traders and make different offers and assure that they will provide better services than others. But when trader registers account with that broker and face any issue broker doesn’t give good response. Broker should be professional, responsible and their services should available 24/7 for clients.
To choose best forex broker you should see some key points in broker. Broker that you are going to select should be fully regulated and well reputed. Whenever any client has issue and makes complain to broker then they should response quickly and solve the issues. Deposit and withdrawal of funds should be quick and fast. Order should be executed instantly; commission and spread should be average and affordable.