One of the most important determinants of a Forex trader’s success is the forex trading brokers they choose. Excellent and reliable Forex trading brokers can offer you stable and easy to use trading platform to trade Forex with, and also give you better guarantee to the security of your fund and customer services. However, if you browse some Forex trading brokers’ websites, you would find all kinds of attractive advertising with huge profits temptations and different kinds of features that you might not familiar with. With so many shady brokers and conflicting reviews out there, it’s not always easy for Forex beginners to know who to trust and what to look for.
To help you to find a reliable Forex trading broker more efficiently, I have summarized a list of Top 10 things you should know before choosing among Forex trading brokers.
- Are the Forex trading brokers regulated?
Being regulated by authority is the most important criteria to evaluate the qualification of Forex trading brokers. Choosing a Forex trading broker that is under the regulation and supervision of the appropriate authorities doesn’t guarantee that they are legitimate and your funds are safe, however it is a good precondition. Since the Forex market is loosely regulated and full of scammers, being registered tells you that Forex trading brokers are serious about their business and has made an effort to align themselves with the regulations.
Here is a partial list of some of the most respected Forex regulating institutions:
NFA (US): NFA - National Futures Association ; CFTC(US):U.S. Commodity Futures Trading Commission
FSA(UK): FSA Register site unavailable
ARIF(Switzerland): ASSOCIATION ROMANDE DES INTERMEDIAIRES FINANCIERS
ASIC (Australia): Australian Securities and Investments Commission
SFC(Hong Kong): http://www.sfc.hk/sfc/html/EN/
For example, IKON Group are heavily regulated by various Governmental Financial Authorities, such as NFA, CFTC, FSA, RAK, FSP, etc, upholding strict financial Compliance and Regulations worldwide.
- Are your Forex trading brokers well capitalized?
You should choose those Forex trading brokers with large capital and transaction volume. This typically makes them more stable and less likely to go bankruptcy, which means your funds are safer.
- Do your Forex trading brokers offer reasonable spreads?
The spread is the difference between the purchased price of a currency and the price at which it can be sold at any point in time. Since there is no commission for the Forex trading brokers, they make their fee off of the spread. Lower spreads can save your money and increase your trading profits.
- What trading platform your Forex trading brokers provide?
There are simple trading platform in the form of a web-based or desktop trading platform. You should make sure the trading platform is stable, simple to use, and can react rapidly. If you want to use advanced trading tools, like Expert Advisors, you should use a broker that offer the popular Meta Trader trading software. Meta Trader 4 is a very stable version. It’s a good idea to first open a demo account to see if the trading platform meets your need.
- Do the Forex trading brokers offer practical margin/leverage?
The amount of margin is important. Margin is used to leverage your money. A Forex trading broker that allows you 500:1 leverage is more valuable than one who only allows 100:1.
- How is your Forex trading brokers’ customer service?
Customer service is as important as all the other criteria since it related to your Forex trading and funds’ security. Their customer service should be easily accessible via phone, email, and/or live chat with English or your home language. Brokers with poor customer support should always be avoided.
- Do your Forex trading brokers provide real time quotes?
Especially for scalpers, every second counts for the success of Forex trading and your Forex strategy rely on the accuracy of the price data. Therefore, it is important to make sure your Forex trading brokers offering real time quotes.
- Do your Forex trading brokers offer a demo account?
A demo account offers you a chance to try out the broker’s trading platform to see if you like it and allow you to learn to trade Forex before risking any real money. IKON offers a 30 days free demo account that you can try with.
- What is the capital requirement to open a real money trading account?
Account types differ a lot between Forex trading brokers. For Forex beginners, they can open a mini account because of the low initial capital requirement to get started. Some only requires a few hundred dollars to start with.
- What is the Forex trading brokers’ reputation?
The best way to find out more about a potential Forex trading broker is to find out what other traders are saying about them. You can visit online Forex blogs, forums and read customer reviews.
Choosing a perfect Forex trading broker is not easy. Before you choose any brokers, make sure you have known the 10 things about your potential Forex trading brokers. By following that, I believe you can find the most suitable and reliable Forex trading broker for you.