How to Choose a Forex Broker

How to Choose a Forex Broker

In forex trading, just like in any other form of investing, success boils down to making the right decisions consistently. For forex traders, the first-ever decision you will need to make is choosing a brokerage partner. A good broker is as interested in your trading success as you are, and they will provide the best possible environment for you to realize your trading goals and ambitions. In contrast, a bad broker will hinder your success, no matter your trading experience, knowledge or skills. This is why it is essential to take your time when choosing a broker – it is a decision that may determine your eventual success or failure in the forex market.

Here are the factors to consider when choosing a forex broker:

Reliability

A forex broker is essentially your partner in the financial markets. As such, it is vital that you have a reliable partner. Some of the features that mark out a reliable forex broker include:

Regulation

Regulation is usually the first sign of a trustworthy and reliable broker. Regulated brokers are obligated to keep client money in segregated bank accounts, separate from their working capital. They also commit to random platform checks to ensure that their trading services are fair and transparent at all times. Additionally, when trading with a regulated broker, you are assured of fair arbitration in case of a conflict.

Time in the Market

Experience and track record is a vital quality in any field, just as it is in forex. An experienced brokerage company demonstrates professionalism and competence, as well as confidence among investors it has served over the years. It is always better to trade with an experienced broker as opposed to a new one just starting.

Industry Awards

Awards are a special recognition for a brokerage company. They increase the credibility of a broker and speak volumes about their overall trading services in comparison to other firms. They serve as a validator of the quality service to investors and traders.

Reviews

Reviews are contemporary infomercials, and they can help you to understand what to expect when dealing with your preferred broker. Still, it is invaluable to get reviews from real clients and not the company or marketing affiliates. Positive reviews are an attestation to a broker’s reliability, whereas negative reviews serve as a red light and can signal a forex scam. All in all, real clients’ reviews are very revealing and can help you to determine whether a broker is reliable or not. You can check out the reviews posted by our customers to get an impression of how people express their views.

Security

Every investor will want to ensure they are working in a safe and secure environment. That is the very essence of trading forex – to make money, and not to be at risk of losing it. It is important to trade with a broker that ensures your funds and confidential information are at no risk of compromise. The broker must employ the latest security protocols and encryption technologies to protect your funds, as well as your private data.

Trading Conditions

Trading conditions are the terms within which you will be speculating on your preferred financial assets in the forex market. Good trading conditions will boost your chances to make money in of the markets, whereas bad trading conditions will inherently make you vulnerable to market risks. Here are trading conditions you should consider when selecting a broker:

Account Currencies

When you open a trading account, you will need to make deposits and withdrawals from time to time. A good broker will support multiple safe, secure and convenient payment methods, as well as several account currencies available for deposits and withdrawals to serve clients in different countries. This means not having to pay additional commission charges for converting your base currency. There should also be a minimum deposit that is comfortable for you, and the broker should have a withdrawal process that is smooth and hassle-free, ideally that you aren’t charged for using.

Trading Costs

Forex trading is like any other business, and you should really mind your costs. When trading financial assets online, investors incur costs such as spreads, commissions and swaps. It is imperative to always to consider the underlying trading costs because they have a direct impact on your overall profitability.

Account Types

Different traders have different trading needs and goals. A good broker understands this, and will offer different account types that meet the individual needs of their traders. There are different forex account types, such as standard, mini, micro and managed accounts, that are designed to meet the personalized needs of individual traders. It is important to sign up with a broker that offers multiple, flexible account types that will continually meet your trading needs. If you are not sure which account is best suited to your objectives, speak to your account manager directly.

Tradable Assets

While more tradable assets may equal more trading opportunities, it is essential to check out the trading instruments offered by your broker and if they will meet your trading objectives. A good broker will have a wide range of assets that fall into categories, such as currency pairs, stock, commodities, indices, and even cryptocurrencies, where allowed by regulations.

Execution Speed and Policy

Execution is particularly important in the fast and dynamic forex market. A good strategy can easily be undone by bad execution. Good execution speeds and policies of a broker can help investors reap the maximum benefits of opportunities in the market. Be sure to sign up with a broker that values execution quality. In addition to fast real-time execution, the broker must ensure that there are no slippages, re-quotes, or price rejections at all possible times.

Leveraged Trading

Leverage in forex allows traders to control much larger positions in the market by staking a smaller margin amount. For instance, a 1:50 leverage will allow an investor with $1,000 to control a $50,000 position in the market. Leverage is always described as a double-edged sword. It can deliver amplified returns but can also magnify your losses. A good broker will offer flexible leverage, as well as fixed margin requirements overnight or during weekends. For risk management purposes, a good broker will also offer protection against negative balances.

Trading Platforms

Trading platforms are your portal to the forex markets. They allow you to buy and sell instruments, i.e. the very essence of forex trading. Brokers may run proprietary platforms or operate classics, such as MT4, MT5, or both. MetaTrader (MT4) brokers are particularly attractive because the platform is incredibly popular among investors because of its powerful, yet simple, user interface. In addition to MT4/MT5, a reputable broker may also run its proprietary trading platform that will feature unique resources to enhance your trading activities. Investors must be very careful with less reputable or unregulated brokers that run proprietary trading platforms. Such platforms are sometimes known to be manipulated to work against the investor. Manipulations can be in the form of widening spreads, hitting stop-losses early or failure to hit take-profit orders at the required times.

For flexible and convenient trading, it is especially important to trade with a broker whose trading platform can work efficiently on both mobile and desktop devices, with full functionality. This would mean determining whether the platform supports easy and quick backtesting/forward testing, strategy formulation and optimization, as well as VPS functionality (if needed) for best execution at all times.

Trading Resources

As your partner, the broker you use should provide resources that will allow you to trade with maximum confidence in the inherently risky financial markets. Some of the most important resources to look for in a broker include:

Education

Successful investing always requires ongoing education and knowledge. You are unlikely to make money out of something you do not understand. A good broker should have a comprehensive and regularly updated education centre that will give you access to free learning materials, such as articles, eBooks, videos and webinars. They should also offer market insights and commentaries from experts who will help you make better trading decisions. The essence of education in forex trading is ultimately to empower you to always make the best possible decisions in all market situations, at all times.

Economic Calendar

An economic calendar is an important tool for forex traders. It provides a schedule of news releases as well as the degree of expected impact on underlying financial markets. Economic news releases and events are huge catalysts of price movement in the forex market. Also, the economic calendar helps you stay on top of these events so you can understand as well as anticipate price movements in the forex market.

Customer Service

A good broker must offer responsive and efficient customer service so that you never have to worry about any technical issues, deposit/withdrawal concerns, or any aspects that will hinder smooth trading activities. Ideally, customer support should be multilingual, available 24/7, friendly, professional, and very responsive. A broker with good customer service will definitely make your forex trading experience more enjoyable.

The Friedberg Direct Advantage

Friedberg Direct is a reputable forex broker, having served forex traders since 2003. The company has built an enviable reputation and stands out as one of the best forex brokers in the world. Friedberg Direct fits all the criteria described above and also boasts unique features such as:

Locally Regulated Brand

Friedberg Direct is regulated in Canada, holding regulatory memberships with IIROC and CIPF, ensuring peace of mind for our clients in all trading-related situations.

More Assets, More Opportunities

Friedberg Direct enables its clients to trade a wide range of financial assets ranging from currency pairs, CFDs on stocks, indices and commodities to FXOptions and bonds. Friedberg Direct is a multi-asset broker that offers investors a wide range of opportunities, which aids efficient diversification techniques and help to manage market risks while enhancing overall profitability of their portfolios.

Multiple Trading Platforms

Friedberg Direct supports desktop, tablet and mobile trading through its numerous trading platforms that include MetaTrader 4, MetaTrader 5, and AvaOptions. All these platforms feature superb functionality and help investors to always trade with maximum flexibility and convenience.

Technical Support

At Friedberg Direct, customer support does not end when a customer deposits funds into their trading account – it only gets started. Every trader that signs up at Friedberg Direct and funds a live trading account can address our technical support representatives to help you with deposits/withdrawals, navigating the trading platforms and any other technical concerns.

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