It’s utterly important that you select an honest forex broker to start with the trade as there is no dearth of legal as well as illegal brokers. And not all brokers facilitate their customers the same way.
As a trader, you must be in a situation for understanding and selecting a broker that would offer suitable and trustworthy forex services depending on your need. Here are the different factors to be considered while selecting a broker for forex trading.
- Broker types – Usually there are two different types of forex brokers – Dealing desk brokers and ECN brokers. The former is also known as market makers. They take the rival position during your trade. On the other hand, the ECN (electronic communications network) brokers keep your orders matching trade. They don’t take the rival position while your orders don’t match with others’ trade.
- Regulated or non-regulated – You should be attentive about regulation while choosing your forex broker. There are different problems associated with the brokers without regulation. For any problem you face during fund deposit or withdrawals, you can’t seek legal help and so you can’t lodge any complaints against the unregulated brokers.
- Account types – Types of forex accounts offered by the brokers are many in number. The types of accounts depend on various aspects such as the features you require from your broker and the investment range. Usually brokers like easymarkets.com offer accounts like micro, mini, demo and standard to their customers. You must be careful about choosing an account; your account type should strictly comply with your first deposit amount, risk tolerance capacity and your trading strategy.
- Trading platforms – These are interfaces that help you understand what and how the trade is taking place in the market. Besides, these are generally available with pictorial representations like graphs, charts as well as features and packages that would help you assessing the market trend. You can also fix a platform for trading first and then look for a reliable broker that offers such a platform as well as fulfils other criteria.
- Deposit and withdrawal methods – Depositing and withdrawing funds from your forex account are two of the most important things in regards to trading in the foreign exchange market. You must be attentive regarding these factors while choosing a broker. Some brokers impose restrictions on the amount of funds can be deposited or withdrawn. This mostly happens with the regulated brokers while unregulated brokers hardly impose any restriction for deposit and withdrawal funds. Any dispute during the withdrawal of the funds has a proper response from a regulated broker while that facility is not available with a non-regulated one. Therefore, it is always advised to work with a regulated broker only.
- Commissions and other charges – All brokers charge a certain amount as fee for any and every trade occurs from their traders. Some brokers charge interest on transaction held overnight while there are few who work out their fees as some hidden charges and so they gain profit without risking. Even if you can’t make profit, they never forget to charge you.
Apart from the aforementioned factors, you should be choosy about the customer service you can expect from a broker. After your account is setup and you need to contact your broker over phone, live chat or email, they must be available and should get back to you quickly and gently. Some brokers occasionally roll out promotional services, rebates and other offers. They can come handy for you in many ways.
Whatever it is, make sure you don’t fall as prey to a wrong broker and drain your hard-earned money.