Forex trading has grown into a massive industry with investors and retailers interested in making more money. A broker like Exness must act as an intermediary between you and the interbank system to access the trading platform. The forex market is flooded with broker companies, and finding the best can be challenging. New traders should do their due diligence to get the best in the market. In this extract, we discuss how to choose a forex broker.
Factors to Consider When Choosing a Forex Broker
Many brokers in the market are waiting and willing to work with all interested persons, but a percentage of them are not genuine. They are scammers and take money from unknowing customers or those who understand little about forex trading. Read the qualities below to improve your broker selection process.
When most people opt to invest in forex, usually a lot of money is at risk. That hard-earned money can all disappear if proper caution is not taken. A broker company must be trustworthy and honest, based on other customers’ reviews. Visit their site and check whether any regulatory body regulates them if licensed and authorized before partnering with them.
Using an unauthorized broker means you cannot take any legal action against them if anything goes wrong. The regulatory bodies include Australian Securities and Investments Commission (ASIC), Financial Conduct Authority (FCA), Federal Financial Markets Service (FFMS), Financial Services Agency (FSA), International Financial Services Commission (IFSC), and many others.
2. Account Options
Brokers differ in many ways based on how they run their trading platforms. The trading methods, terms, and conditions, deposit requirements are all different. Some forex brokers ask for a particular percentage of money before agreeing to open a trading account for you. The deposit amount varies, from as low as 5 dollars to a high of 100 dollars.
Understand what you’re getting in return before paying, like the features you can access on the trading site. Go for brokers with multiple account options to cater to your needs. For example, an account that uses your home currency for easier transactions or an Islamic account can be used without breaking Sharia laws.
3. Cost of Transactions
For every trade placed in the market, a transaction fee must be paid. The cost differs from one broker platform to the other. Typically, we tend to lean towards the broker with the cheapest transaction cost in the forex market. However, the low cost is only great if you are sure of the broker’s security and reliability. Never compromise some qualities due to the cheapness of the platform.
4. Deposit and Withdrawal Modes
It’s important to find out how you can withdraw or deposit your money before choosing to work with a broker. The process should be easy and stress-free. It can be done using credit cards, PayPal, ACH payment, wire transfer, or bank checks.
5. Paired Currency
Currencies used for trading are so many, but those with the highest liquidity get the most attention. A broker offers several forex pairs like EUR/USD, USD/JPY. GBP/USD and many others. Select the one that interests you most as a forex trader.
It’s advisable to research extensively on a broker before committing to them. It reduces your chances of being scammed, and you can identify trading platforms with the best deals and benefits. Confirm their credibility and nature of operation beforehand.