If you’re just commencing as a Forex trader or even casually pondering the idea of Forex trading, working with a broker can be especially helpful. It also concerns some risks. It can be challenging to compute where to look for a Forex trading broker. You would be interested in a brokerage that offers Forex trading services. You have to be prepared to make sure the broker or brokerage is honorable and satisfies your needs.
Which forex broker is best for trading in India? Or How do I choose a Forex broker?
Ask yourself the sort of company you would call should you have a trade dispute. The objective of this question is twofold. First, is it an honorable company that will truthfully examine a trade in which you feel that you’ve been done harm? Two-are its instruments available to the public, and are they regulated?
Financial transparency and Regulation are of crucial importance regarding the ease your broker can inspire in you. Since volatility has picked up in the Forex market, we see under capitalized brokers shutting down shop without warning. This can leave traders in a substantial mess. If you are in the loop regarding the financial positioning of your broker, you can judge whether he’ll be able to survive the coming storms and volatility in FX.
How important is Regulation for brokers?
Whether a brokerage is regulated will decide who you can turn to if you’re discontented with a trade dispute resolution. Consider it a type of insurance. Naturally, you are hopeful that you’ll never have to use the policy. However, you’ll certainly be happy when it’s offered to you on a rainy day.
Some of the most pitiful calls come from FX traders trucking with unregulated brokers who are apt to shut down overnight or refuse to process withdrawals. When the unregulated broker refuses to honor his side of the agreement, the trader has nowhere else to turn.
Open a demo account to try him out when you’ve found a broker you’re interested in working with.
Forex Broker Reviews
Look at Forex broker reviews. Be sure to read reviews from numerous sources.
You can do Google searches to discover Forex brokers. However, this method might not tell you all that much about brokers themselves. Ensure that you read all the reviews and try demo accounts to form an informed opinion about a broker. Only then ought you commit a large sum of money to a brokerage account.
Visit some Forex forums to get input from practicing traders. There’s a wealth of information in Forex trading forums. It’s one place where you can research experiences with diverse Forex brokers.
The number of foreign exchange brokers has plunged since late 2007. As a result, a lot of the “weak hands” have been flooded out of the market. However, due diligence is still necessary when you’re determining who to partner with for trading.
Consider Your Needs
Assess your own needs before looking at brokers. Here are some things to consider:
- Are you going to do lots of day trading – or just a little?
- Trade very small moves, or seize bigger moves?
Consider an ECN broker if you day trade a lot and capture small moves. You’ll pay a commission on trades. However, the spreads are much tighter, which counts when trading small moves. Search for “ECN Forex Brokers.”
You still have a big pool of brokers left if you don’t think you’ll need an ECN broker.
Also check: Forex trading course
You’ll need an ECN broker if you’re going to do “scalp” trading.
How much capital have you? You have to trade micro-lots with a small amount of capital. You can start day trading mini lots if you have over $5,000. Open a standard lot account only if you have at least $50,000.
Pick a broker and account type (lot size) that corresponds to your capital.
When you mull depositing /withdrawing funds from your account, diverse brokers offer miscellaneous methods. Select a broker that aligns with your needs.
What the broker must Offer
Desirable features in a Forex broker:
No “dealing desk.” If you’re a day trader you seek interaction directly with the market. Your purpose will not be served when your order is sent to a trading desk that initiates it in the market. That consumes time, frequently resulting in “re-quotes.” This is when the price has adjusted since you placed your order, and the broker invites you if you wish to proceed. Given the time delay, your trade opportunity is in all likelihood gone.
Ensure your broker is regulated in a country with a well-established financial system. A Forex broker regulated in St Vincent & the Grenadines, for example, is better than no regulation.However, you could still have difficulties. For instance, pick brokers regulated by CySEC, FCA, ASIC.
You’re a day trader. Therefore, you ask for competitive spreads. For instance, if day trading the EUR/USD during a major session you can expect the spread to be close to one pip (point in percentage) with a non-ECN account. Two pips are too high. Ditch that broker as an option. With an ECN account, the spread ought to be half a pip or less during major sessions.
Go for a broker that’s there when you require them. Open a demo account with worthwhile brokers you are considering. Pelt them with lots of emails and questions. Monitor how snappily and exhaustively they respond. Eliminate that broker from your potentials’ list in case the customer service isn’t good.
Be cautious about “Losing Trader” Reviews
Part of your research in picking a broker ought to be looking at written reviews of the broker besides discussion forums.
Be wary of these though. You’re to find fake reviews, positive and negative,if the information does not come from a credible source – the forums are not credible sources.
Most day traders will lose money. Given that most traders can’t recognize that to themselves, they blame others when it happens to them. Although the writer may blame the broker, just because someone complains about losing money doesn’t make the broker they were using bad.
Maintain objectivity, even as you look up what people are saying. With no credible reference, lots of false information still gets published.
Personally Sound out the Broker
Your list of potential brokers becomes narrower. Don’t make a decision yet, with so much false information out there. Rather, test out the brokers you are most interested in.
- First, open a demo account and take notice of the trading conditions. Your orders ought to execute immediately. Spreads ought to be tight , the platform stable.
- If the demo works well for some weeks, open a live account with a fraction of the capital you intend to deposit. For instance, start by only putting in $1,000 if you have $10,000 to deposit.
- Trade the live account with the partial deposit for a minimum two weeks. During this time, keep testing customer support, pelting them with questions , evaluating how fast they respond.
- Start a withdrawal for some of the funds in your account. Depending on your withdrawal method, this might be worth some money. However, it’s worth it to know if withdrawals can be done easily.
- Finally, if everything seems okay, you’ve accomplished your due diligence. Deposit the rest of your capital – start trading .
When you open a live account, bypass any and all “bonuses” the Forex broker may present.
Nothing is for free. If you accept a bonus, it could interfere with withdrawals. In addition, some of the funds in your account are now the broker’s money. Submit with your account application explicitly stating you don’t wish to participate in any bonuses they offer.
When you have confidence in your Forex broker – like we do with PrimeFin– you would be at sufficient ease to devote more time and energy to technicalities. Learn to be at your best, by trading with the best. Only when the foundations are sound, do you stand on firm ground.
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