So you finally decided to jump into forex trading. But to actually begin trading, you should have a forex broker to do your buying and selling of currencies. There are thousands of forex brokers out there. Some of them legit, some of them scams. So how do you know which brokers to choose?
Personal Preference Comes First
How I choose my forex broker is a personal preference. I would like to have the option to deposit and withdraw the money with either Paypal or Wire Transfer. So I search for brokers with those feature. On our top broker’s list, eToro has a Paypal feature which is great. Disclaimer: 75% of retail investor accounts lose money.
Why Paypal? Because its easy and its good for people starting out with little capital. But don’t be complacent in using Paypal for deposit and withdrawals for long term. Because they are easy, they have the highest cost in fees. If you would like to save money, wire transfer is still the best option, especially for large withdrawals.
Is the Company Regulated?
Is it regulated? Is it legitimate? Is your money protected? Is your money in a separate account than that of the broker? Ask these questions to the brokers and if all the answers are yes. Then you are in safe hands. We already did the search for you on our forex broker’s list.
Do they have Metatrader?
Metatrader is the most popular trading platform for forex and for a reason. They have a lot of features that caters both retail traders and bot makers. You can automate transactions, manage different accounts on different brokers in just one application. Large presets of indicators and strategies built it and programmed in the platform. Plus, you can add your own. If they don’t offer metatrader, then I think you’ll have a hard time managing accounts.
Brokers that scam people usually have leverage that are too high so they can milk money out of your account faster. Search for brokers that offer just enough leverage to let you earn money and lesser risk. Don’t be tempted to sign up with brokers that has insane amount of leverage. Its kind of like investment scams, double your money kind of thing. Don’t be fooled.
Fast and Reliable Support
From time to time, even with legit forex brokers, you’ll encounter some “misunderstanding”. You want a broker that would talk to you and respond to your queries and questions. Scam brokers usually good at the beginning and started to fade into the shadows once you have deposited your money. Try their demo account first and then ask them questions. If you like how they respond to you, then that is great. Its always great to have a good relationship with your forex brokers.
Because of the frequency of the trades that happen in forex trading, you don’t want to “bleed out” money each and everytime you fill in a transaction. Each spread save, is money earned. Brokers with high spreads usually will not last long. Because of tight business competition in this market, tight spreads are abundant, just be diligent enough to look for them. Spreads for majors that range from 0.5 to 2.0 pips are good spreads in my opinion.
The best thing to do when choosing a forex broker is to try their demo first. If you feel comfortable in their platform, their support and their overall service, then you found yourself a good broker. Provided that they are legit of course.
If you have reviews about a broker, good or bad, please email them to me so I could make a review for them.