With several Forex brokers to choose from, selecting the right one can be both testing and tedious. To facilitate and ease these decisions, we've tried and reviewed many of the best Forex brokers and shared our findings. So we would be looking at each feedback from real traders, and the key things all the best brokers have in common.
Most reputable online forex brokers take the step of submitting to regulation by one of the main financial regulatory agencies operating in their home country. Sometimes, they will even be regulated by more than one agency. Such regulation provides you with the security of knowing the broker's operations are being overseen by an independent authority with the goal of keeping the business honest.
2. DATA SECURITY:
When you either enter or store vital or personal information online, it can be subject to falling into unfriendly hands that may use it for their own personal gain. Accordingly, a top priority when choosing a broker is that they encrypt all data entered into online forms using industry standard SSL-encryption or better.
Another key issue involves the safe storage of data so that it will not be lost in case of disaster. Many online forex brokers use duplicate data farms with high security to assure the safety of your account information
3. DEALING SPREADS:
Intraday trading strategies become unsuccessful over the long term if the spreads from your broker are not competitive. The spread is simply the difference between the bid price and the offer price for a particular currency pair and should be no greater than five pips in the majors and major crosses.
4. COMMISSIONS AND FEES:
Sometimes brokers are not satisfied with investors just dealing on their spread thus, sometimes might charge a commission or fee for each transaction. Sometimes these are calculated on a per transaction basis or on a volume dealt basis. Additional fees might be involved in making withdrawals or deposits, so be sure to check that information to minimize your transaction costs
5. CURRENCY PAIRS:
The more currency pairs you deal with the more opportunities to profit, you will want to make sure that your forex brokers offer all of the pairs you might be interested in trading.
6. DEPOSIT REQUIRED:
Forex broker will usually require a minimum deposit to be made for you to get started trading forex unless you are only interested in a demo account. Often, the more money you place on deposit, the more features you have access to or the tighter your dealing spreads become.
Leverage refers to how much of a position you can control with a certain amount of funds allocated to it. Some brokers currently offer leverage rates of as high as 500 to 1 where there is no leverage limit. This implies that with just $100 allocated from your portfolio you can control $50,000 trading position. Note that in the U.S. the maximum leverage is 50:1 for majors and 20:1 for minors.
8. MARGIN REQUIREMENTS:
Most forex brokers require that their clients place a certain amount of funds on deposit to cover such potential losses.
9. TRADING PLATFORMS:
Most of the better forex brokers offer their own proprietary trading platforms for you to use to execute forex transactions with and to keep track of the market.
The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.