HappyHamster

How to Choose a Forex Broker

How to Choose a Forex Broker
To start trading in the international exchange market Forex, you need a professional intermediary – a broker. However, its choice can be hard. Good advertising is not a guarantee of a company’s honesty and reliability. What should we pay prior attention to when choosing an intermediary? Let’s discuss how to choose a broker and not lose your savings.

Availability of license


The pursuit of a legal broker activity is impossible without a license. As a rule, information on the document is publicly available on the company’s site. The license is issued by official regulators. It may be Central Bank, for example. Also, there are private regulators, which specialize in the issue of licenses too.

To obtain a license, a broker has to meet a number of requirements. Above all, it should have its own capital. Moreover, having obtained the license, a broker is regularly inspected by regulatory bodies. If a company fails to comply with at least one criterion, the permit may be withdrawn, and the broker’s activity – be suspended.

The license is issued to legal entities only – banks or other financial organizations. An individual cannot take out this document. That’s why, if you come across an ad on the internet advertising the services of a private licensed broker, you may rest assured that it’s a fraud.

Lifetime


The company’s lifetime is yet another reliability criterion. The first broker agencies emerged on the market in 1997-1998. They are considered to be the most proven and reliable. Nonetheless, there are younger brokers one should pay attention to. If you doubt a candidate, consider its ‘age’. The older the broker, the better. The perfect option is when a company has been operating in the market for 5-10 years.

Broker’s security level


Before you open your trading account, make sure the company is safe. When registering, a client always passes verification, confirms their identity. If a broker does not require the confirmation of your phone number, the copies of ID documents, it makes sense to give its reliability some thought. Trusting the wrong company may cost you your funds.
Also, to check the company’s reliability you can use information placed elsewhere except on the company’s site. If a broker hides some data, you’d better withdraw from cooperation with it.

The following information is necessarily subject to disclosure:

  • data on license;
  • financial statements;
  • data on judicial disputes and proceedings;
  • a list of credit organizations where the client's funds are booked, etc.

The analysis of all data can help to form a clear picture of the company’s activity.

Trading platforms and app availability


Trading platforms and app availability


Before you give preference to a specific organization and open your real trading account, find out what platforms you’ll be able to trade on. Learn whether a broker has application browsers, which do not require downloading, as well as apps for smartphones or laptops. The success of your cooperation depends on that. You can get all necessary information on the broker’s site.
Make sure that a company provides a demo account. That’s a mandatory condition for a beginner. This way you’ll be able to learn the ropes of Forex trading keeping real money. If you have real trading experience, you may pay attention to more conservative organizations, which do not provide demo accounts.

Trading terms


After the organization’s reliability assessment, you need to assess the conditions it offers. First of all, you need to consider your own trading preferences and be focused on yourself. Maybe, some of them will play a crucial part for you. So, what trading conditions you need to pay careful attention to?

Terms of money replenishment and withdrawal


Terms of money replenishment and withdrawal to a trading account may be different in different brokers. All related information should be presented on the company’s official site. Consider what banks and payment systems the company cooperates with. Yet another important criterion is the size of the commission for making transactions. The best thing is when a broker affords ground for currency conversion.
Take note of the number of payment systems. The convenience of trading account replenishment, as well as profit withdrawal, depends on it. There are the next payment systems:

  • money transfers;
  • transfers from one banking account to another;
  • transfers using a bank card number;
  • using electronic systems.

Major brokers provide the opportunity of making transactions with all the above-listed methods.

Instructions Happy Hamster Trading Bot
Instructions Happy Hamster Trading Bot

Minimum deposit


That’s an important criterion for a beginner. Sometimes the deposit size may be crucial in the selection of a broker. Some major companies set a high barrier of entry, which many people cannot afford. Make sure the set threshold fits you and you can risk this money without causing damage to your budget. Moreover, it’s worth specifying what currency is used to open a trading account.

Fees, spreads, leverages


Large organizations often provide several types of trading accounts, which differ in fees, currencies, and other parameters. Take a close look at the conditions of each of them. Choose the variant, which meets your requirements best. The great advantage is the opportunity of choosing the size of credit leveraging on your own, and fees and spreads should not be too high. Focus on average market indicators.

Financial instruments and trading platforms


Financial instruments and trading platforms


Check out which trading instruments the chosen company provides. The more options are offered, the better. This way you’ll always have the opportunity to choose. Also, a good trader provides its clients with several trading platforms. You can choose the option, which fits you best.  Make sure mobile applications operate properly.

Customer support


Not only a beginner but an experienced trader too may need a specialist’s help. It is highly important that a company provides this kind of help. The best thing is when support operates 24/7. The promptness of the response to a client request is also important. Large organizations offer the possibility of phone communication with an advisor. Smaller ones communicate via email or special chat.

Do a broker analysis


So as not to make a wrong choice and look back on the decision made, it’s better to compare several organizations at the same time. To this end, you can use special apps, lists, ratings or carry out an analysis on your own. This way you can rule out doubtful companies leaving the ones, which fully meet your requirements.

TOP Forex broker selection criteria


There are parameters one needs to take notice of above all. They are:

  • Length of experience +5 years and excellent reputation.
  • Availability of license and compliance with the requirements of the country’s regulator.
  • Large client base.
  • Opportunity to get the support at any convenient time.
  • High ratings, availability of real positive feedback.
  • Using up-to-date software.
  • Profitable and open cooperation conditions.
  • Ensuring trader’s personal data safety.

A broker’s reputation is being built for years, that’s why reliable organizations set a high value on it. Make sure to give attention to the firm’s reputation, try to study the feedback of real clients, do not hesitate to ask questions. The safety of your funds will depend on how responsibly you approach the choice of a broker.

Instructions Happy Hamster Trading Bot
Instructions Happy Hamster Trading Bot


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