If you’re thinking of starting to trade in Forex you’ll need a broker you can rely on. Here’s our short guide to finding the right Forex Broker that suits you.
Choosing a forex broker that is regulated is your number one consideration. In the UK, look for one regulated and supervised by the FCA (Financial Conduct Authority) and who adheres to its strict code of conduct. It may also be beneficial to investigate the company’s financial accounts and its credit rating, both of which should be easily available. In addition, firms with a high turnover are legally required to hold client monies in a separate account, maintain a clearly-defined level of capital and that their owners, board members and managers have all been subject to the ‘fit and proper person’ test.
Keep The Spreads Low
Spread is simply the difference between the bid price and the ask price of a pair of currencies. If the broker you’re considering offers high spreads, they could be making a profit at your expense. Choose a broker with low spreads to enable you to make the most of your forex money.
Keep The Leverage High
High leverage gives you the ability to use a small deposit amount to trade larger amounts, boosting your trading power to a level which you would not have had otherwise. Leverage is expressed as a ratio 1:1,000 means that the trading power you have is increased by 500 times. Expressing this monetarily means that if you deposit 1,000 with your broker, they will match it and increase it to 500,000. It’s useful for small forex traders with low amounts of ready capital to increase their profits.
Forex is a fast and furious place to trade so it’s vital that your broker can keep up with transactions and trades in a timely manner without the delay which could mean you lose money. Ask about their speed of execution and how they maintain it.
Which Type Of Account?
Each forex trader will have their own financial aptitude, requirements and ambitions and your broker must be able to cater for your individual and unique set of trading needs. Ask potential firms what kinds of accounts they offer to understand any internal limitations they may have and to plan ahead for the future.
A Demo Account
The best forex brokers will offer you a demo account to try their system before you trade ‘live’. This is a method of ensuring that they firm you choose is the right one for you. You will encounter real-life trading conditions but you won’t be risking any of your money it’s based on virtual reality so you can try out your trading style in a risk-averse environment until you are ready to move on to the real thing.
Depositing And Withdrawing Money
The speed at which you can deposit money with which to trade can mean the difference in a substantial profit or a spectacular loss. Choose a broker who offers speedy and simple methods of depositing money to enable you to take advantage of sudden changes in the market from which you can make a profit. Withdrawing your funds should be equally as easy so make sure their processes offer you quick access to your own money.
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