Return on Investment (ROI) - a much sought after term which lays the foundations of temptations when investing in stocks, mutual funds or currencies. Considering the volatility of the Forex market and opportunities it offers for exploiting profitable openings; this trade arena is sure to attract a host of investors. However, traders cannot invest on their own. They require the guidance of currency trading companies and the expertise of brokers.
So, before a trader chooses to un-turn his or her pockets into this volatile globe, he/she must tick the following check boxes as an assurance to get the perfect broker at disposal.
- Transactional currency pairs
The currency market consists of eight major currencies namely, - USD, GBP, EUR, JPY, CHF, CAD, AUD/NZD and ZAR. Any reliable currency trader must provide trading possibilities in all these currencies. He must also ensure that investments are possible in all sessions; thereby allowing traders to make maximum profits.
- Security is the key
It is an obvious fact that no trader will like to hand over thousands of dollars to a trading firm without assuring their authenticity. In fact, the best way to do so is through one of many regulatory agencies that exist in every country.
Here is a list of agencies responsible for checking the credibility of currency trading companies in major nations.
UK – Prudential Regulation Authority (PRA) & Financial Conduct Authority (FCA).
The USA – National Futures Association.
Switzerland – SFBC or Swiss Federal Banking Commission.
Australia - Australian Securities and Investment Commission (ASIC).
- Withdrawals & Deposits
Authentic FX brokers will uphold certain conditions in case of money withdrawals. Your withdrawal eligibility will also vary depending on the type of welcome bonus you have opted.
For instance, traders choosing a no deposit bonus will have to earn a significant amount before being able to extract their profits. Deposit forex brokers, on the other hand, do not require passing through such hassles.
- Efficacies of trading platforms
Often brokers may ask you to opt for their personalized investment software vouching for their efficiency over others. However, legit and reliable currency trading companies, in contrast, will also encourage to sign up with platforms such as MetaTrader or Bloomberg. They will even ask you to try your skills with a demo account before making actual investments from your pocket.
- Leverages on offer
Leverages often emerge to be the silver lining of profitable trades. It allows you to escalate your investment opportunities manifold. Suppose, a trader has $500 at stake but desires to invest more considering present market situations.
So, he leverages his $500 in the ratio of 50:1; thereby securing a total profit margin of $25,000. This, in turn, helps him to open a larger position and secure a greater profit margin.
Having said everything; the above facts exhibit a clear demonstration of the checklist that one should consider before choosing from a plethora of currency trading companies. So, stack your pockets, fire up your trading platforms and make your first investment in Forex today.
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.