THINGS TO CONSIDER WHEN CHOOSING A BROKER?

Fundamental Analysis

Fundamental analysis is an analysis methodology for forecasting the direction of the prices by relying on the economic, social, political and other qualitative and quantitative factors that may affect the supply and demand in the market.


Slippage

In forex, slippage occurs when an order is executed, often without a limit order, or a stop loss occurs at a less favorable rate than originally set in the order. Slippage is more likely to occur when volatility is high, perhaps due to news events, resulting in an order being impossible to execute at the desired price.


Leverage 

Borrowing Capital from your broker to open bigger positions than you would otherwise be able to.


Ask

Ask price is the lowest price the broker will pay to sell the instrument.


Bid 

Bid price is the highest price the broker will pay to purchase the instrument.


Spread

The difference between the Ask price and Bid price is broker’s profit that is called spread.

The recent regulatory relaxation on brokerage businesses has reduced entry barriers for online forex brokers. However, there has been tremendous growth in the number of forex brokers in recent years, and choosing the right one requires cautiously sifting through an overwhelming number of sources that could be time-consuming and frustrating. 

Due to this rapid growth, one must be cautious when it comes to choosing the right broker. 

Therefore, We have provided you with a tailored list of regulated Forex brokers that we are trading or have traded with in the past to ease the path. It is extremely important to do business with a regulated broker, and we highly recommend you do your research before choosing one.

Besides that, you also have to consider which types of brokers suit your needs and trading style. 

 

Therefore in this topic, we will cover a few important things that one has to consider before choosing a broker. 

 

Regulatory Compliance

 

One of the main factors distinguishing reputable, trustworthy brokers from fraudulent ones is broker compliance with guidelines and regulations set by regulatory agencies worldwide. Below is the list of some of the regulatory agencies:

 

HONG KONG: Securities and Future Commissions (SFC

SINGAPORE: The Monetary Authority of Singapore (MAS)

AUSTRALIA: Australian Securities and Investment Commission (ASIC)

SWITZERLAND: Swiss Federal Banking Commission (SFBC)

GERMANY: Bundesanstalt für Finanzdienstleistungsaufsicht (BaFIN)

FRANCE: Autorité des Marchés Financiers (AMF)

CANADA:  Investment Information Regulatory Organization of Canada (IIROC)

UNITED STATES: National Futures Association (NFA) and Commodity Futures Trading Commission (CFTC)

UNITED KINGDOM: Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA)

CYPRUS: Cyprus Securities and Exchange Commission (CySEC)

 

 

Trading Conditions

 

Besides regulations, it is also important to check the broker's account details and trading conditions, such as offered leverage, fees like commission and spread, minimum initial deposit, deposit and withdrawal policies, and options. It is also important to check what trading activities the broker allows, as some of the brokers prohibit some trading activities like hedging and scalping. Trade execution quality and speed are also other important things to look for when choosing a broker. 

 

Platform

 

When choosing a broker, it is important to make sure that the trading platform the broker offers is easy to use, well designed, has adequate technical indicatorsfundamental analysis (News Feed), and most importantly, trades can be entered exited with ease. Conversely, a lagging and poorly designed platform could cost you significantly, as it could increase the probability of errors due to its poor design when placing orders.

Besides that, the platform downtime could affect your trading performance since you will not monitor your floating trades or place new ones. Most of the brokers offer Metatrader 4 and 5 as a platform. However, some brokers have their own built platforms. 

Generally speaking, Metatrader is the most common platform used by traders due to its user-friendly nature.

 

 

Customer Service 

 

In our more than 15 years of experience in trading forex, we found it very hard to find a broker with fast, efficient, and quality customer service. Before opening an account, we all experience fairly good customer service. Still, once the account is opened and the fund has been deposited, we often experienced a sudden drop in the efficiency and quality of customer service provided. Therefore, selecting a broker with a good and responsive customer service and support team is important to respond to your inquiries, complaints, and problems effectively and efficiently. 

Since forex trading occurs 24 hours a day, the broker's customer support should be available at any time. When considering a broker, a quick call or a quick inquiry through Email or a live Chat can give you an idea of the type of customer service they provide.

 

Bottom line, it is important to examine, research, and check all the mentioned factors above when searching for a broker. Also, we strongly recommend you to look through the terms and conditions of any particular broker that you plan to engage even though it's boring and time-consuming but trust us, it is worth it. 

We speak from our collective experience over the past 15 years with many brokers out there, that how the behavior of some of them suddenly changed once, we started generating profit. Some of them started sending us Emails once we made much profit that our account has been terminated, red-flagged, and all sorts of excuses to make it hard for us to continue and discontinue them. 

 

In the end, regardless of your trading result, a reputable and honest broker should provide you with the promised services hassle-free and without interruption. Brokers really have no reason to make it hard for you to withdraw your profits because the only reason they hold your funds is to facilitate trading.

Thus, whether you are generating a great return or you are constantly blowing up your account, they must stay indifferent and offer you all the services as they promised. They should facilitate your withdrawal request hassle-free without asking their sales team to annoy you by calling and begging you to stay constantly. They should keep their platform running smoothly at all times, and they should try their best to keep their spread within the range they promised in the first place.