The Forex market (foreign currency exchange market) is currently the largest financial market in the world, generating around five trillion US dollars daily. The number of participants in this trade is also growing, which makes it possible to carry out negotiations without having to leave home. All you need is a computer with internet access.
With the growing success of the Forex market, hundreds of brokerages have emerged, which are nothing more than intermediaries between the trader (dealer) and the market. However, like almost everything that involves money, there are many frauds, that is, companies with dubious credibility in the market. Getting a regulated broker can help you avoid any fraudulent dealings. For example, you can use UK brokers regulated by FCA if you wish to trade in the UK.
Choosing the best Forex broker is certainly one of the first steps a novice trader should take before starting his trades. Here are the main characteristics that make a Forex broker really reliable and efficient in terms of the services provided.
Is the brokerage that piqued your interest reliable or credible? How can you know? One of the most basic criteria for having a superficial understanding of the reliability of a broker is the way it exposes information about its services and their values. For example, is there transparency regarding the cost of each service the broker offers, or does it appear to be hiding extra fees? A simple way to access the answers to these questions is to search for former and current broker users to find out their respective opinions. Transparency is one of the pillars for you to trust a broker, although it is not the most important.
Regulation is undoubtedly one of the most important points when choosing a Forex Broker. The regulated broker usually has to pay a fee to receive a license, as this service is not usually free. This fact already points out the following: In most cases, only renowned brokerages with a positive image to uphold will be subject to this cost since it is not usually cheap. Furthermore, to start the regulatory process, brokers must meet a series of requirements that will make them considered regulated.
Unregulated brokers can do whatever they want with their traders’ funds, so you need to be highly cautious with unregulated Forex brokers. The best Forex brokers will certainly be those with a license or accreditation from a regulatory entity, preferably from the country where their headquarters are located.
In addition to regulation, the capital held by a brokerage firm can also say a lot about it. The broker needs to separate their capital from the money invested by their clients. However, this is not all. It is advisable to look for brokerages with a security capital, that is, a considerable value. It’s not easy to access this type of information because most brokers do not make it available on their official websites. However, it is possible to analyze other data leading to an average estimate. For example, you can find out how many employees work for the broker and if it has regulations.
You can come across doubts at some point in your negotiations. Whether technical or more fundamental questions, you will require help from professionals. As a result, you should always look for brokers with good customer service. The best brokers will have 24-hour customer service via email, chat, and telephone. In addition, you need to know the available languages.
The trading platform is how the trader can access the market. That is, it is where the trades are carried out. The best Forex brokers will also have the main platforms available to their clients. One of the most recommended is the “MetaTrader” system (versions 4 and 5). A proper, simple, and user-friendly trading platform is critical to successful trading. But how do I know if the platform offered by the broker meets my needs as a trader? The best option is to open a demo account.