THE DIFFICULTY OF SELECTING THE BEST BROKER FOR FOREX TRADING.
Only yesterday I had a conversation with a woman who was on the verge of a nervous breakdown, and all because of the fact that she “fused” more than 15 thousand dollars with the help of an “honest” broker!
70% of all newcomers lose their money with a “help” of brokers in the foreign exchange market. But do not think that only beginners have a problem of a choice. Many experienced forex traders, who have already been trading for a long time, find themselves in a similar trap, because they simply do not know how to choose a good company.
And it’s not surprising, if you look at the number of companies and their methods of getting new clients.
|Number of Forex brokers||Methods of attracting customers|
|There are more than 1000 forex brokers in the world! 95% of them are offshore!||
These factors and aggressive advertising make the question – which is the best forex broker very urgent. In this article we will consider the basic principles of choosing the best company for trading.
15 TIPS OF HOW TO SELECT THE BEST FOREIGN EXCHANGE BROKER:
1. YEAR OF FOUNDATION.
The older the firm is, the more likely that it is reliable, plays “by the rules” and monitors its reputation. The most reliable forex brokers work in the market for 10 years;
It is desirable to judge about a reputation by reading authoritative sources: large and famous magazines, websites or ratings which are difficult to bribe. Many companies have people or even departments, who completely control and “clean” a plenty of forums, websites and blogs;
3. COUNTRY OF REGISTRATION.
Surprising when people ask the question: “Andrew, what about the broker ***?”. I open a website of this company and see the offshore registration. Well, what can I say? If you do not pity your money, then you can open an account with such a company, but I highly recommend considering only best regulated forex brokers;
Remember, reliable companies are located in the US, Canada, Japan, UK, Switzerland. If your broker is registered elsewhere, you are at risk;
One of the most important conditions for the reliability and transparency of the company.
5. ECN/STP/NDD ACCOUNTS.
Do you still trade against the company? Then we go to you!
Remember, the best brokers for forex do not have a dealing desks so that there is no conflict of interests with the client. Only this guarantees you honesty and comfort in trading (to take into account only together with par. 3 and 4);
6. TRADING CONDITIONS, ESPECIALLY THE SIZE OF THE SPREAD.
Forget about the huge (from 2+ points for EUR/USD) or fixed spread, it’s savagery. Top forex brokers should offer spreads from 0.2 to 1.2 points (majors). Also there is no fixed spread on the real market at all. There should be no restrictions for trading, for example, on the time, size or number of deals;
7. OPENING AN ACCOUNT.
Opening an account should not consist only of filling out a simple online form. You are seriously ready to put your own money into a company that does not even care who you are?
It is desirable that a forex broker would require, at least, to send scanned copies of documents for your identification and a proof of residence;
8. SEVERAL AVAILABLE TERMINALS.
Of course, MT4 is great, but it is desirable if a broker offers, at least, 1 more another terminal, especially if it’s their own development. Very often such platforms are more functional and provide better execution speed of transactions;
9. ABSENCE OF A DOZEN WAYS OF DEPOSITING MONEY.
Seriously, where did you see a self-respecting btoker that works with low-grade e-wallets? Bank transfer and cards – yes, Skrill and Neteller – good, all the rest – no (see par. 2).
10. SECURITY OF FUNDS.
The best brokers on forex work only with A-class banks. Send a request to support team to give you a bank transfer details and find out where a company has an account.
It is also important that your funds are stored on a segregated account.
A lot of advertising is bad! An honest forex broker simply does not have so much money to spam it on all sorts of resources. This is the destiny of the “bucket shops”, who live off the “plums” of their customers.
I Want to Highlight the Factors That Are Not Particularly Important When Choosing a Reliable Broker:
Remember, no one will ever teach you trading (read, qualitatively) for free. And not all paid courses will give you a real knowledge necessary for a successful career. Usually, they will teach the only one – how to lose your deposit quickly by trading during the news :);
13. BONUSES, PROMO, ETC.
Really? Only if it’s a no deposit bonus, and you want to play or it’s a margin bonus that you want to win it back. But even here everything is not so smooth because of the presence of many “points”.
Remember, if you get a bonus, you trade against the company with all the ensuing circumstances;
14. ANALYTICS AND SIGNALS.
Having worked in a European forex broker, I can say with a confidence that no client has earned using analytics and signals from our “experts”. If you want a high-quality market analysis, you need to look for independent resources and forget about free signals. I will say one thing, it is difficult to find a quality forex analytics and trading signals now;
Did you ask yourselves why is the leverage limited to the 1:50 in the US and Japan, when offshore companies offer incredible conditions? Forget about 1: 888 or 1: 1000. Licensed forex brokers will never give such conditions, a maximum is 1: 400, but many offer only 1: 100 or 1:50.
The Bottom Line
After all that has been said, I want to sum up: it does not matter whether you are just going to open an account or already trading, take the time and check your broker for all the parameters described. This will help you to save millions of nerve cells and thousands of dollars.
In this article you can find information about the signs of really honest companies.
In the comments write:
- forex brokers with whom you work
- why did you chose them
- estimate their performance
- share your impressions of trading with them.
If you need help on how to choose a forex broker, doubting about your choice, or want to know more about your current company, add me in Skype – vovkfx or leave a request on the site. I will always be happy to help!
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