The number of online forex brokers has significantly increased over the last decade and all of them claim to offer quality services to their esteem customer. However, the truth is that not all brokers do stand by their world. There are some that are only interested to make profits at the expense of the customer and there are others who are committed to render quality services to customers. Before you make your final decision when choosing an online forex broker, there are several critical factors that you need to consider in order to get a broker who will meet your trading needs. Below are 9 Factors to consider when choosing a Forex Broker.
1. Ensure that the broker is regulated
Regulation is a very critical factor that many people usually overlook when choosing an online forex broker. Proper regulation helps to ensure that the forex broker is well capitalized in the unfortunate event of a trading loss. It also ensu-[''[[re that the broker maintains standard practices as well as keep your money safe. If you want to be on the safe side, then it is recommended that you choose an online forex broker who has a clean regulatory record, like Gain Capital (NYSE: GCAP).
This way, you can be sure that your hard earned funds are in safe hands. Most developed countries usually regulate online forex traders. However, the regulatory standards usually differ. Ensure that the broker that you choose shows you the regulatory that proves he/she has been licensed to as well as the registration number.
2. Ensure that your data security is guaranteed
You will be required to submit very important financial and personal data when opening an account with an online forex broker. For instance, you will be required to submit copies of your utility bills, passport as well as your credit card numbers and bank account information. If the online broker has not integrated proper security features, then your personal financial information can be stolen, trading disrupted and you will be also at risk of identity theft. It is therefore very important to conduct due diligence to ensure that the broker uses excellent security features.
3. Good trade execution
If you want to get the best deal, then you must choose a broker who employs good trade execution practices. This will ensure that your trades are actually filled at the best market rates and also in a timely manner. Basically, there are two types of brokers that you can choose from. They include those with dealing desks and those who pass clients orders to the interbank market. For instance, if you choose dealing desk brokers, then the broker will be your direct counterparty meaning that they will make loss from your trade when it makes any gains and vice versa.
4. Consider Area of product coverage
Unlike the past where you could only trade currency, nowadays brokers are allowed to trade in over capital market via a single forex account. It is therefore very important to choose a broker who offers broad coverage such as venturing in stock indices, precious metals, commodities, Bitcoin, bonds among many other, to increase your chances of making profits from your hard earned money.
5. Consider trading costs
Trading costs are quite expensive and can have a huge impact on your overall profitably as a trader. This factor is specifically important for high volume traders. Quality does not have to be expensive. Take your time and search for an online broker who is committed to offering quality services but at a fee that you can comfortably afford. However, you should not comprise the quality of service just because you want to save money. Sometimes cheap can end up being expensive.
6. Consider trading platforms
When choosing a trading platform, it is very important to choose one that has powerful features that are easy to use. It needs to have everything that you need to meet your trading needs. Most reputable online trading brokers usually offer demo accounts to give you a taste of what you should expect when you finally sign up for the real account. Before you make your final decision, take your time and test the demo account to see if it will meet your trading needs. There are many online trading platforms that you can choose from including social trading, web-based trading, mobile trading and Meta Trader.
7. Consider trading style
The trading style that you implement will determine the type of forex broker that you will attract. For instance, if you are a short time trader, it is important to choose a broker who provides currenex account and also allows scalping. On the other hand, if you are a long-term trader, you will be less concerned with trade execution speed. However, you will more interested in overnight interest rates that your broker offers. This means that you need to pay close attention to the broker’s oversight policies and rates before you make your final decision.
8. Quality of customer service rendered
It is very important to choose an online forex broker who offered quality customer service to all clients. Quality customer care services will help make things easy when it comes to opening new accounts, helping you understand how forex trading works and also in helping you choose the right trading software. Choose online forex broker who offers excellent customer service to all customers.
9. Consider trading tools and educational materials
Another crucial factor to consider when choosing online trading broker is educational materials and trading tools that the broker provides. Many reputable online brokers usually provide educational materials including videos, article, webinars, e-courses, and seminars at no extra charge. However, the quality of these materials usually varies depending on the broker that you choose. It is therefore very important to choose a trader who offers quality trading tools and educational materials to all clients.