Some Major Points To Consider When Choosing A Broker

When you are seeking to choose a Forex broker, there are certain things for which you should look out. The fact is that there are so many brokers out there, and the market is so competitive, that you may find it something of a nightmare trying to choose between them.

Here are half a dozen of the major points that you should look at in order to find a broker to suit your requirements.

Possibly the most important thing to consider is Security. You could be handing over a considerable amount of your hard-earned to your broker, and you want to ensure that he is legitimate before you do so.

As luck would have it, checking out a broker is not too difficult, because there are many regulatory bodies in existence. The short answer is that, if the broker you are considering is NOT a member of a recognized regulatory body, then run a mile.

Here are the regulatory bodies for the various countries:

In the USA, there is the CFTC – Commodity Futures Trading Commission, and the NFA – National Futures Association.

The UK has the FCA – Financial Conduct Authority, and PRA – Prudential Regulation Authority.

For Australia, it’s the ASIC – Australian Securities and Investment Commission.

In Canada, it’s the AMF – Autorite des Marches (Financiers), and it is the same name in France.

Germany has the BaFIN – Bundesanstalt fur Finanzdienstleistungsaufsicht.

In Switzerland, it’s the SFBC – Swiss Federal Banking Commission.

The next thing to look at is the Transaction Cost.

It is a sad fact of forex life that every time you enter a trade you are going to be saddled with a transaction cost by way of the spread, or a commission. The thing that most people do is to look for the lowest possible rates, but you should note that, as with many things in life, the cheapest is not always the best. If your type of trading means that you need to search for tight spreads, you need to find a happy medium between low costs and security.

The Trading Platform. You need the trading platform of your broker to be user friendly, and also stable. It is no good to you if your broker’s platform crashes while you are in the middle of a trade. It also needs to be easy for you to understand and operate.

Check that you get free up-to-date news feeds, charting tools, and more. Most brokers offer these, and they are a useful addition to your armory. 

Is Withdrawing Your Funds hassle free? Most brokers will make it very easy for you to deposit funds, but check out their system for withdrawal. Can you get paid in the way in which you choose?

What about Execution? When market conditions are normal (i.e. assuming World War III has not broken out) your broker should fill you at, or within, micro pips of the price that you are looking at when you click to buy or sell. The speed at which your order gets filled is important, and can make the difference between making a good profit or a small one, or even a loss.

The last thing is Customer Service. How does your broker handle this? Does he have live chat, and if so is it in the language of your choice? Can you contact him in the way that you want, when you want? You’ll find that every broker will seem to have stellar service when you want to open an account, but is it still stellar when you are actively trading?