One has to be diligent in their search and choice of a forex broker as it involves putting your information and funds into another person’s hands. Make sure that your choice of location and person are good so that you have legal recourse, if necessary.
Here are a few tips on how to keep in mind while choosing a Forex Broker.
Pick a retail broker with a good reputation before commencing trading. Make sure that they are located in a safe country and ask around for recommendations. Check and see if they have registered with regulatory agencies. They are required to have licenses before they can trade or take on other people. The very fact that they are registering will give you some protection just in case any problems crop up.
A legitimated and qualified broker ensures that you have a reliable platform to trade on, round the clock customer support during trading hours, charts and analytical tools, forex news bulletins, access to commentary, good order execution tools, competitive spreads and a wide choice in currency pairings for trades.
Anything less than the above should not be considered. There are a lot of traders to choose from so don’t get shortchanged. Research broker backgrounds before you start trading. This will save you a lot of money – make this the topmost priority while setting up your business.
Keep in mind that you will get charged a commission by the forex broker. They will take a part of the bid offer spread, so the tighter the spread, the more money saved by the trader and this makes a big difference to active traders. Brokers should freely answer any questions that you have for them. If they fail to do so or avoid you, look for another broker.
Make sure that the forex broker’s policies on the above are agreeable to you. A few may choose to charge fees for bank and wire transfers and some others are willing to use PayPal. Go ahead only if you feel comfortable with the terms and conditions.
Some brokers may give you a new quote after you have entered your order. This may happen so they can charge a fee. When choosing a broker, make sure that they have a no requote policy and then sign up with them.