The first move you should make when you join foreign exchange trading (Forex) is to find a reliable online platform or broker you can trade with. A Forex broker is any company that gives you access and platform for online Forex trading.
There are many Forex companies in the financial market, and that means you should be smart enough to choose the best one based on your preferences.
However, as a beginner, it may be challenging to choose the right Forex broker or trading platform. That is why you should take some time to go through this guide on choosing the best Forex platform to trade.
1. Levels of spreads
Online Forex brokers are compensated in the form of spreads. A spread is a difference between the buying and selling price of a currency pair.
When choosing the online Forex broker you should look out for the number of spreads they have and the marketing techniques they apply. MT4 trading platform is one of the many platforms you can begin your Forex journey.
Check if the spreads and commissions that the company will be charging you are fixed or non-fixed. Note that the amount of commission charged will normally vary based on the size of the financial transaction and the financial product.
Photo: Search for more information about a Forex broker before you register
2. Fees charged
As a beginner in online Forex trading, you want to ensure you maximize your profits. Therefore, you must confirm the brokerage fees that the Forex broker is charging before you create an account.
The brokerage fees that you have to part with will depend on the type of broker. For instance, an ECN broker will charge commissions and spreads while a Dealing Desk Broker will only charge for the spreads. Also, the type of trading service you sign up for will determine how much commission the broker takes from you.
A typical online Forex platform should not take much commission from you, especially if you join the platform as a retail trader.
3. Regulations and compliance
Before joining a trading platform, you should confirm if it has met all the regulations set by the government. For instance, in the United States, the online broker must be a member of the National Futures Association (NFA). It should also register with the CFTC.
NFA and CFTC are important regulatory bodies in the Forex market. They set the rules that protect traders from exploitation and ensure all stakeholders in the industry are held liable for any financial misconduct like fraud and manipulation.
Check out the company’s about page for more details about their compliance before registering with them.
4. Safety of your funds
As a Forex trader, you must partner with a financially sound broker. Find out the financial portfolio of the broker before you can sign up for their services. All legitimate and regulated online brokers must maintain a certain amount of capital in liquid form, as specified in the Net Capital Rule.
Also, the law requires that the broker keeps the traders or their client’s funds in a segregated account and ensure it is only used for trading and nothing else. You should also confirm that the broker is insured. This way, you can rest assured your funds are in safe hands.
Photo: The best Forex trading platform should keep you updated with current market trends
5. Initial deposit
How much should you deposit to start trading differs from one broker to another? Some mini Forex brokers will demand that you deposit as little as $25 before you can begin trading.
The first deposit you make with the broker is subject to the type of broker you are partnering with and the special rewards they provide, such as welcome bonuses.
A top broker should be willing to offer you some bonus as a first-timer. Confirm if the broker is offering any incentives for new members before you can join. That is a great way of knowing whether the broker is an established brand in the industry.
6. Availability of funds
When you deposit funds in your account using third-party checks, it should not take long to reflect.
The amount of time it takes for your funds to reflect in your account and become available for trading is an important factor that you must consider before joining any Forex trading platform.
Lastly, consider the deposit and withdrawal options the broker is offering. It should be much easier to deposit or withdraw funds from the platform at any time.
7. Customer service
Online Forex trading takes place round the clock. Therefore, when you subscribe to an online trading platform, you should find out if they have a reliable customer care desk.
That is, customer care should be easy to reach at any time when you have some urgent issues that you would like the company to address. The customer care should be there to help you out whenever you have issues with the broker.
As a newbie in Forex trading, there is a lot that you must learn before you invest your money. Research widely to find a reputable broker you can partner with.
When you choose the right broker, you can boost your chances of succeeding as a full-time or part-time trader. Use this guide the next time you are choosing the best Forex trading platform.