Top 4 Characteristics to Look for in Your Forex Broker
With the emergence of the online Forex markets there are many new Forex brokers to choose from. While a large number of them are reliable and dependable, there are some that do not really do justice to the services that a Forex broker is supposed to perform. When choosing a Forex broker, there is a large list of characteristics that one must evaluate. However, these four are the main ones that need to be assessed before anything else.
- Reliability – Irrespective of anything else the first thing that you need to check with regards to the brokers that you are considering is the reliability factor. While there is no global regulatory body for Forex markets, each country has its own financial institutions that have a specific set of rules and regulations. Check whether the Forex broker you are evaluating is associated with any one of them.
- Trading costs – A large number of people feel that trading costs are not so important in Forex markets since brokers do not charge any commission or fee. However, this is not entirely true. There are some Forex brokers like FXCM that operate as a” no dealing” desk. These brokers charge a fee on a regular monthly basis for the services that they provide. On the other hand, there are some brokers that do not charge a fee but make their profits from the concept of pips. A pip is the difference between the selling price and the buying price of a currency at a specific broker at a given time. This is also referred to as the spread and it is the primary form of revenue for the Forex broker. Spreads offered by different brokers can be fixed or variable. It is better to opt for fixed spreads even though they tend to be higher at times than the variable, especially if you are a new Forex trader.
- Trading platform – All Forex brokers offer Forex trading platforms. These platforms are unique and have a user interface that is generally customized for the Forex broker, even though the base application may be similar. You need to ensure the platform you choose is responsive so that you get the trades executed at the price you have chosen.. Delays can sometimes mean a difference between profit and loss. In addition, trading platforms should be easy to operate and be user--friendly as well.
- Payment options – Some of the most common frauds and scams with Forex brokers are the ones in which traders are not able to withdraw their monies easily from the trading account they have set up. In some cases, there is a long delay by the time you can get your hands on your money. This is why it is important that you be well versed in the various withdrawal methods that the Forex broker allows.