When entering the forex business, you should always be very careful while choosing a forex broker. A quick search on the internet would reveal that there are several forex brokers who probably have the malicious intent to overtake your business. It will be wise to thoroughly research financial websites and forums to make sure your money does not land in the wrong hands. You must pick your forex broker as per your own financial requirements. The right broker can be crucial for your success in trading.
First, you should determine your financial goals and understand what kind of investor you want to be when you start trading currencies. You will discover that every broker who allows access to the forex market, has their own set of pros and cons. Regulation, security, transaction fees and commissions are a few things you must consider when choosing a broker.
Benefits of choosing a regulated broker
- Your Trading Funds Are Safe, Secure & Segregated
If you open a trading account with a regulated Forex broker, your account as a client must be separate from that of your broker’s funds. It is one of the key requirements that a regulated broker has to meet as it keeps the investor’s funds secure. In case the broker faces a tumultuous situation, investors must have the option to safely withdraw their funds.
- High Credibility & Adherence To Guidelines
Because of the strict guidelines, regulated brokers are also required to adhere to proper bookkeeping and accounting practices to ensure that their business transactions do not overlap with any movement of their clients’ money.
Regulated brokers must be in compliance with a series of strict guidelines that ensure that their client's money is safe. They must have proper bookkeeping and accounting practices that have a clear record of all transactions. This ensures that investors’ funds are safe and also easily accessible. It builds trust and faith among investors who simply wish for a hassle-free trading experience.
- Transparent & Honest Trading Operations
Your broker must offer complete transparency. This is absolutely non-negotiable because it involves your hard-earned money. This implies that your broker should remain transparent about your trades, commissions, and listings. It also means that your broker must be very clear about all the trading activities they undertake on your behalf such as margins or leverages.
Transparent operations would not be limited to traders’ transactions. Even the broker’s business practices have to be clear so that clients are not misled.
Security check
One cannot emphasize enough the importance of a user-friendly and interactive trading platform. A properly designed forex trading platform will have visible and amply clear buttons to buy or sell assets. In some superior designs, there may even be a panic button. Generally, it is used to immediately close all open positions when there are unprecedented losses.
Most if not all brokers offer a forex demo account for free where one can test out all strategies before actually putting them to use in the forex market. You should also check how the broker is charging you for their services. Are they charging a percentage of the spreads or is there an additional commission or fees per trade?
References:
https://www.jointium.com/read-blog/6612_5-trading-forums-traders-need-to-know-about.html
https://www.itsmypost.com/why-you-need-top-forex-brokers-to-flourish-in-forex-trading/