There are a large number of brokers on the market offering a wide variety of offers. When clients start looking for a broker, they are likely to be completely immune to the situation and have a huge amount of information.
What is a Forex broker?
A Forex broker is the financial intermediary with which customers will open a trading account to place their orders on the foreign exchange market. A reliable Forex broker is a regulated entity because, to be active in this field, he must have a license and be under the supervision of the competent financial authorities.
How clients choose a Forex broker for their needs
If a client is a beginner and does not have much knowledge of the financial markets, it is advisable to take a Forex trading course in order to have a general idea of how it works and how it can benefit from this activity.
To choose the right broker, clients can take into account several aspects, namely:
The broker must be regulated. It is very important that the broker is approved and appears on the list of suppliers in order to avoid any surprise that the broker disappears with the client’s money or that the clients can no longer withdraw their money of the trading account.
Security of deposited funds. Clients should verify that the broker they are considering has segregated accounts (that is, the broker’s accounts as an economic entity are separate from client accounts – thus, in the event of financial problems, client accounts are not affected) and opened in a prestigious banking institution.
The trading platform provided by the broker. Customers must have a reliable and robust platform available to them. ETFinance is the platform most used by brokers around the world.
Spreads and trading commissions. It is necessary to check the spread of the targeted trading instruments, the commissions, the swap and the quality of execution. It is a mix and customers must have competitive costs at their disposal. Of course, choosing the lowest spread is tempting, but keep in mind that the average spread is not always guaranteed when you have market orders.
Ratings and quality of execution of orders. It is important for the broker to place orders on the market at the target price level and not to re-position their positions at other price levels.
The strategies that the Forex broker allows. Clients should choose a broker that does not limit their choices in terms of trading style. For example, if they are interested in scalping, they will not have a minimum number of pips between the current price and the stop-loss, or between the current price and profit.
The execution model you need. Traders must choose between a Forex broker with dealing desk or without dealing desk. They can choose an ECN, No Dealing Desk or STP broker depending on the desired strategy.
Variant types of accounts for trading – The broker should provide clients with the types of accounts they need or want: ECN, STP accounts, or offer discounts or bonuses for large deposits.
Number of markets offered. It is desirable to have access to as many markets as possible in order to be able to choose and identify as many trading opportunities as possible. You have to check if the broker you are studying has access to stock market indices, commodities, stocks, cryptocurrencies, ETFs, bonds, etc.
Ability to adjust leverage. Forex is most often traded with leverage, which can be a huge advantage, but also a major drawback when the market moves against you. This is the reason it is vital to modify the level of leverage as needed.