If you’re thinking about getting into forex trading, you need to learn a few things about the currency brokers to trust. Trusting your broker blindly is never a good thing. You’ll want to take time to learn as much as you can about these forex traders and their services before deciding if you can trust them. It may take some time, but you’ll find that the more you know, the better decisions you’ll be able to make. Here are some of the things you should look for in currency brokers to trust:
Accreditation – There are currency brokers who have formalized educational backgrounds and accreditations. This shows that they have completed formal training and that they’re expected to be able to help you out in your trading ventures. Look for brokers with this type of accreditation. Also, check their client list to see how many of these they’ve helped before.
Education and Experience – A lot of people would assume that experience is more important than education when it comes to becoming a broker. However, you shouldn’t think this way. There are plenty of experienced brokers who got their start without any schooling or prior training. Education and experience do not necessarily go hand-in-hand. If you can get a broker with both, it’s even better.
Money Management Techniques – Forex trading is high-risk and volatile. For this reason, you need to have money management techniques in place. This doesn’t mean you have to be a financial genius. Just make sure your money management techniques are sound.
Communication Style – Most brokers take phone calls. Some take chat calls. The most effective brokers encourage interaction between their clients and themselves. They encourage questions and give advice if asked. If the broker doesn’t respond well, you should probably move on.
Platforms and Service Level Agreement – You should never rely solely on a forex broker’s platform to make your trades. The best platforms offer support for multiple currencies and provide great reporting tools. Some even offer forex robots to trade for you! These robots do all of the market analysis for you and trade the way you specify. You can trust forex brokers that respect your privacy and give you the tools you need and expect from your trading platform.
Risk Factor – This factor has to be one of the most serious considerations you can make when choosing between forex brokers. Forex is highly speculative. No matter what your investing goals are, there is a risk of losing your cash. The same is true of forex brokers. Currency brokers bear some risk but their potential profit is also much higher than with other investments. Always consider the risk factor when choosing a forex broker.
Offers – All currency brokers have different ways of promoting themselves. Find out what they are offering. If they are simply a referral service, find another broker. If they have a high minimum or commission, don’t even consider them. The best brokers will be the ones that offer excellent customer support, low minimums, and great commissions and fees.
Trades – You should be able to see at least three trades every week. This should include both winning and losing trades. Also, look to see if the trades are being displayed on the screen in real time. Some brokers will allow you to select various screens so you can see real-time trades. While this isn’t always possible in all brokers, it is something to keep in mind when choosing brokers.
Ease of Use – This factor might seem obvious, but keep in mind that not all currency brokers are created equal. Some will be easier to use than others. Some brokers will have to do all the work for you. Choose one that doesn’t require too much work on your end and you should be fine.
Platform – What kind of platform do they have? This is a very important consideration. Do they have a free demo account? How do you access the platform? There should be easy to use interfaces for both customers and brokers.
Cost – Finally, consider the cost of doing business with the broker. Depending on how involved you are with trading, you may not want to pay the highest commission. Look at how many trades a month they perform and how much they cost. Compare prices and consider if the cost is justified by the services they offer. While many currency brokers charge high commissions, there are also a number of low-cost providers out there. It’s a good idea to do your research and choose a broker who offers low-cost trades.
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