Forex brokers such as Skilling or eToro, provide access to dozens of currency pairs for retail traders.
After checking the internet, we found thousands of regulated forex brokers to choose from.
All of them provide the same service – forex trading – so how do you choose the right one?
Below are some simple guidelines to pick the perfect broker for you:
Regulation is basically financial laws that a broker must adhere to in order to be able to operate.
Without regulation, a broker can in theory do what he pleases. Slipp your orders? Freeze your platform? Deny you withdrawal?
Yes, unregulated brokers do what they want, and is a massive risk for you.
Avoid unregulated brokers at all costs and only choose properly regulated brokers.
Regulators that provides good security for you, includes, but are not limited to:
-EU (MiFID II/ESMA)
– ASIC (Australia)
– SEC (USA)
– FCA (UK)
Choosing a broker regulated by one of the above will ensure regulatory standards that will give you good protection.
The industry standard spread for EURUSD is 1 pip. If a broker offers you let’s say 3 pips, they are ripping you off (if not providing a service).
The broker should have no fees for deposit and withdrawal.
Customer support should be available through telephone / live chat – not only email.
If something happens with your account, you should be able to get help instantly – without any hassle.
Most forex brokers offer the MetaTrader 4 platform. which offer great flexibility and customization.
If you are looking for more advanced features (and up to date), you should also check out the cTrader platform.
A broker can be regulated but still use bad practices and provide bad service.
Searching for reviews and user experiences can help you avoid the really bad ones.
Trustpilot and Forex Peace Army are good places to start.
If you like in the United Kingdom and choose a broker who only offers accounts in USD, your bank might charge you a conversion fee.
In some cases, the broker actually charges you if you send money to them in another currency.
The conversion fee might be as high as 2 percent – which will of course eat into your profits.
Try to choose a broker which offers accounts in your local currencies or use methods to avoid paying high conversion fees!
Services such as Revolut might be of great assistance in such cases…
Choosing the right forex broker for you is easier than you might think. Look for good regulation, low costs, and good customer support, and you will find a good broker.
Also, check out user reviews to ensure that you choose a broker that other traders have had a good experience with!