Your success in currency trading largely depends on the
forex broker you choose. There are many brokers to choose from and selecting a good
one requires an effort, since among the good ones lurk the shady.
How can you find an honest broker that you can rely on with your money and profits? Which one will provide professional services? Will you receive what is promised? The basic features you should pay attention to are listed below.
Regulation
Regulated brokers obey the strict rules of the authority
body. There is more security to your funds, more professionalism towards
handing traders requests, more integrity in trading. When a regulated broker
doesn’t comply, a trader can file a complaint with the regulation authority
and, with a good enough reason, the broker can be stripped off the license.
Fees, Security and Trading Terms
Since we are talking about money here, it is important
to know that your withdrawals and deposits are handled with care, meaning that
your personal information is received and stored safely. This is achieved when
the account details are encrypted. Make sure that your selected broker has a
strong privacy policy.
At the first glance, most brokers offer the same thing –
major currency pair, relatively high leverage options, different account types,
free demo for practice, professional charting, top-notch trading platform etc. If
you dig deeper, however, you may find all kind of terms and conditions
invisible to the naked eye.
For
example, a broker that offers an attractive bonus will apply certain terms of use.
Below are some of the sentences you may encounter:
“In order
to withdraw your free bonus, you will be required to execute a minimum trading
volume of 10,000 base instruments for every $1 bonus within 12 months. 50% of
those volumes need to be traded within the first six months of receiving the
bonus.”
There can
be hidden fees or limits imposed on your deposits or withdrawals. An example of
such terms and conditions are quoted
below:
“… reserves the right to impose deposit limits and
deposit fees in its system.”
“... reserves the right to impose withdrawal limits and
withdrawal fees in its system.”
You definitely don’t want to sign up with the broker
that states the following privacy policy:
“The Company shall bear no liability if third persons
gain access to information, including electronic addresses, electronic
communication and personal data, transmitted between the Client and the Company
or any other party, by use of the Internet or other network communication
facilities, telephone, or any other electronic means.”
Do not be lazy to go over the terms. You may be
surprised to find out just how much is hidden in what you are signing to.
How exactly do you sign to those terms? During
registration you are always asked to mark the checkbox next to “I have read and
agreed to terms and conditions”. This is how to legally agree to the terms of
each broker.
Trading Features based on Deposit Amount
There are brokers that have different account types,
based on deposit requirements and services provided. For example, you may find
difference like this:
Standard Account
Minimum deposit - $1,000
Features - no extra fees; unlimited deposit; 10,000 lot
size; currency, gold, oil, silver trading
Mini Account
Minimum deposit - $100
Features – extra fees applied; maximum deposit $1,000; 1,000
lot size; cannot trade gold, oil or silver.
Make sure you know the differences of the accounts
before you choose one. You don’t want to start trading only to find that you
cannot use this or that feature promoted on the broker’s website.
Technical and Customer Support
One of the most important characteristics that needs
testing is personal support. Whether you have technical issue with the trading
platform or have an enquiry regarding withdrawals, the broker has to provide
decent support online, on the phone and via email. The last thing you need is a
broker whose representatives do not understand your requests, or cannot give an
adequate response.
