In January, 2012, the foreign exchange market accounted for more than $4 trillion in average traded daily value thus, making it one of the largest financial markets in the world. Since no central marketplace exists for the forex market, all the traders must all conduct their trading activities through a forex broker. With the increase in the total number of forex brokers in the market, all there is need for the traders to research, evaluate and compare the options available to them before coming to a valid conclusion on which one to trade with.
This article will serve as a guide on the way to identify the best platforms for trading forex by putting various important factors into consideration
The factors to consider includes the following.
1. TRADING PLATFORM
Trading platforms serves as the trader’s portal to the markets. By bearing this in mind, traders should ensure that the platform and any other software is very easy to use and navigate, visually pleasing and should also have a technical and/or fundamental analysis tool. The trading platforms should also offer avenues through which trades should be easily entered and exited.
2. NUMBER OF PAIRS OFFERED
The next factor to be considered should be the number of currency pairs available for trading. This is because only a few get the needed attention and therefore, trade with the highest degree of liquidity. The major currency pairs are; USD/JPY, EUR/USD, USD/CHF, and GBP/USD. These currency pairs tend to trade in more predictable movements and ranges; however, many more currency pairs are traded.
3. PROVISION OF DEMO ACCOUNT
Most of the brokers usually offer a free demo account so that traders can test run the trading platform before creating and funding the real account. This gives the traders the opportunity of using the platform to determine if it is intuitive, robust and user-friendly or even complicated.
a good forex broker should be governed by rules and regulations, programs or services to protect the integrity of the market. They should be able to protect the public fraud, manipulation and abusive practices which are related to the sale of futures and options and to encourage open competitive and stable futures and options markets.
this is a very important factor since the location of a forex broker to a large extent influences the regulation and potential educational opportunities present. A broker operating in a country that provides little or no regulation may be a riskier place to open an account than one located where regulatory compliance and enforcement have a strong presence.
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.