Brokers can choose from different online brokerages nowadays and they are offering very enticing terms. Some accept low initial deposits while others boast their very user-friendly platforms. They may also have a wide range of analysis tools. But nothing is the same even amidst the tight competition of online forex brokers.
These brokerages are different in design and the manner of welcoming new traders while others are more welcoming to veteran traders.
What is a Forex Broker?
FX brokers are financial institutions that are providing access to buy and sell to FX traders online. Way back years ago, there are no retail or individual FX traders. The FX market is ruled by big banks, huge firms, and hedge funds. The reason for this was that capital investment goes up to $1 million.
But over a course of time, the FX market has become more popular, thanks to the grant given to investors with a much smaller minimum capital. Then, the liquidity gap which was created by those retail investors with a smaller capital and the large requirement for trading was then filled by those market makers.
Nowadays, what we have now is an overwhelming number of FX brokers who are operating from different countries all around the globe. Individual investors can start for as small as $1 initial investment and they can access the market very comfortably inside their homes.
Important Factors To Be Considered When Choosing A Forex Broker
The Minimum Deposit
The first thing that you should ask a broker is the minimum deposit required to be able to open an account. This is very important as this will determine the amount that you should spare to start trading. Most of the time, brokers advice traders to start with a demo account before transitioning into a small live account before going into a larger FX account.
What’s so fascinating now is the fact that the minimum deposit required to open an account has been lowered to as low as $10 or even much lower. This is very useful for traders who are new to the market and has budgetary constraints.
The Spreads and Commissions
Compare the spreads and commission of one platform to the other. These two are the business costs of traders, therefore, you need to know more about it before joining a platform. Without a doubt, it is so much better to choose a broker charging low costs.
The Swap-Free Accounts
For Muslim traders, you may want a swap-free account that can comply with your tenets of faith. You may have to ask your broker about this.
A Regulated Forex Broker
Is the broker regulated? Regulation is very important for Forex brokers because it spells protection. Make sure that your broker is a regulated one.
The Experience Of Other Forex Traders
If you still have doubts even after getting answers from the things mentioned above, then you may want to ask previous or ongoing clients regarding their comments and reviews on their experience with the brokerage firm.
When things get awry, you will need good customer support. Make sure that the broker you will choose can satisfy you with that.