The market where the valuable metals like oil, currencies and indices are traded is known as the foreign exchange (forex market). Today the daily turnover of the forex market is $3 trillion. There are several forex broker houses whose works are to help make good and profitable investments decisions on behalf of their customers. They actually allow small-scale trade among the financial companies and hedge fund managers. There are hundreds of online forex brokers for help but not everyone is good. Legality has always been a question in choosing the online brokers.
Very few primary factors are as important as the forex brokers select ion for a successful forex trading experience. Several elements are there as the tools to evaluate the forex brokers. Among them some are so critical that you may not be able to find out their features until you being with them. Here I will try to provide you all required basic factors that can help you choose a broker.
History and Background
When you search for a retail forex broker you need to look through their historical backgrounds. In their history you can have close look to their account types offered, trading software, deposits and withdrawals, customer support, and safety of funds. These parts will be described in detail bellow.
Although there are number of regulations on this Industry, it is still a ‘buyer –beware’ industry.Alexa rating shows traffic ranking and this information can be helpful too.
Financial Regulation Authority
Whenever the one want to join the forex broker’s legality is the first factor, which knock at the mind first. In this case visiting the online local government financial regulation office is the good idea. Check whether the broker house you are interested in is listed or not. If not, just keep yourself from them as they will be good for nothing and will certainly collapse making you bankrupted. So checking the legality should be given the utmost priority.
Giving safety to the customer’s funds is the sign of a real forex broker. In case of the safety of the client’s fund the rigorous firewalls and SSL technology can be an additional benefit for the customers.
The legality is a major factor, which needed to be considered. While choosing a broker firm, check whether it is regulated and registered with the authorized firms or not. For instance, if you have chosen a firm belongs to the USA then check whether it is a member of the CFTC and the NFA of not. The UK-based firms should be a member of the FSA. Any firm devoid of the membership of these institutions is to be avoided.
If you do not have $30,000 you have to look for brokers offering mini or micro accounts. Even if you have that much amount, you can do so to increase your knowledge and experience before starting in a full steam. This will also make you acquainted with the platform of brokers and individuals.Micro accounts are very important for new traders and brokers should offer that as well.
The good brokers are always concerned to make your money safe. Therefore, they will offer you a demon account that is actually a software program. This is a replica of the real trading where you will play with ‘toy moneys’ for having a feeling of real market situation without the risk of losing money. This software has a platform like a real account providing real life situations and information with real-time price. Don’t worries if you don’t want waste your time playing with this don’t worry. It is not mandatory. Just look for the other broker’s software these are totally free.
Majority of the forex brokers offer several platforms for their customers. In this regard, the MetaTrader (MT4 )is the most useful platform in this industry.
With the passage of time, the most experienced traders have enriched the MT4 platform by using different forms of it. For instance, the use of forex signal guide named the ‘ signal-copy’ helps to deliver automated signals to its end-user subscribers.
Another characteristic of the best broker is to offer the mobile access and such functions that will be helpful for further trading with the account. The term mobile trading has become much common affair in this new era of technology.
The numbers that come as the successor of the decimal point is known as the PIP. It is also called the fractional number. Though in real life PIPs are not counted, it has a great influence on forex trading. This is the point which can help to make of loose profit. The fall or rise of the market is often expressed by the PIP numbers.
Registration system is another factor to be considered, it is not important though. Often the bogus broker firms offer a long, time-consuming registration process that is certainly annoying. A good and reliable broker houses always try to reduce your sufferings. Therefore, they offer a form that consumes tem minutes of your time. You need your bank and credit card or pay-pal details at hand for that. You will be able to trade in the market within few minutes after registration.
Deposits and Withdrawals
Having flexibility in account deposits and withdrawals is an important element you should consider. For being a good broker the credit transferability through Visa, MasterCard, along with wire transfers for both deposits and withdrawals is just basic offer. Another offer are wallet such as Skrill, paypal, neteller, webmoney etc.
The forex broker account fee can be varied from $10 (cent accounts) to $1000 or $100.000. There is nothing to be worried about. An old proverb goes, “only put as much in, as you can afford to lose”. The world of forex market is very much volatile and flexible enough to make you a looser within a day.
The thing that you should give the utmost priority is their customer support service. Before selecting a broker firm, make sure the firm has a well-developed system of supporting their customers 24 hours a day and seven days a week. Having a local phone number and email address is a must to differentiate the departments. Live chat offer is a plus point to contact them any time of the day or night.
Real Time Prices
Today the many of the firms are seen to promise to trade with the best price, which is actually not good. It is nothing but a fake statement to attract customers. A good broker house always offers the real-time price rather offering the best price. The task of a broker is to make it easy for their customers to deal in the products and services according to the price mentioned on the screen.
Charts and Graphs
Dealing in forex depends on the information. Sometimes, the market shows the same behavior as before. Therefore the past information analysis is an essential element for taking decision. Providing graphs and charts of 20 years of so is one of the most important characteristics of a good broker house which actually allows one to take right decision from the past. Moreover, the cross referenced graphs form a particular pattern to judge.
Having the current news bulletin has a great significance. This section helps to take immediate action according to the situation. For example, Japan has just had a catastrophe. Now suppose someone has lots of money invested in Japan currency. With the help of the current news bulletin section the person just learned about the disaster and converted his investment into other currency to reduce its risk of price falling.
In fine, your chosen forex broker should be friendly with the beginner and can make lower initial deposits. If you are able enough to start trading with full size lots, still you should start with the mini account. This will give you a clear concept about the broker you are going to deal with about their guidelines, procedures before starting full trade with them.
The broker needs to be well-regulated. They must have an image of competence as well.