Trading foreign exchange currency is becoming a more popular activity. The market is huge, and so are the potential earnings.
The Forex market is the only one that is open 24 hours a day, five days a week, allowing everyone to trade foreign exchange currency as a side gig. Stay-at-home moms, full-time or part-time employees, and even business owners are now also showing interest in trading Forex in their free time to increase their revenue.
It doesn’t take much to trade Forex. As long as you have a computer and a strong Internet connection, you’re set to trade foreign exchange currency on the biggest financial market in the world. Well… almost set. You also need to choose the right broker!
Choosing the right broker is of utmost importance to have good trading experiences and a real chance to earn some significant amounts of money. The tools offered, the platform, support, and many other perks offered by the right broker can make the difference between being successful with trading Forex or not.
Keep reading below to learn what you should pay attention to when selecting a Forex broker!
Look for a demo account
While this may not be the most crucial thing a Forex broker should offer, since this guide is specially made for novice traders like you, the demo account is worth to be mentioned first.
Demo accounts, as the name suggests, allow you to trade in the “demo mode.” In other words, you trade on the broker’s platform but without using any real money. With such an account, you see the trading activity just like you would see it when trading normally, only that there are no real risks involved.
- Why should you look for a demo account? For plenty of reasons, including:
- You can test your trading skills for free.
- The risk of losing money isn’t real.
- You can decide whether or not you really want to trade without losing any money.
- You can gain insights into how the market works and how to trade before investing real money that you can lose.
Choose a reliable one
The reliability of the broker is of utmost importance in the trading world.
Everything from the broker platform’s quality to the support it offers to traders needs to matter a lot for you because all these things can affect your trading experiences positively or negatively.
More precisely, for example, the platform of the broker matters a lot in terms of how it moves. The Forex market involves making quick investment decisions and acting as quickly as possible. If the platform loads slowly or freezes, your investments may be affected, and you may lose money.
Besides that, the broker’s reliability can also be measured in how quickly it handles potential issues such as technical malfunctions or account problems. Problems can arise all the time, and they don’t necessarily mean that the broker isn’t reliable. Lack of or poor customer support, on the other hand, is a sign that you should stay away from that broker.
To find out more about how reliable a broker is, you need to do your research about their reputation. Check what other traders have to say about trading with that particular trader. If other traders are pleased about how well the broker’s platform is working and how fast they manage issues, it means that it is safe to trade with them.
Also, don’t forget to check if the broker is regulated by the regulatory body in your country. This is the only and safest way to determine a Forex broker’s credibility.
Speaking of how safe it is to trade with a broker, the platform’s security is another vital aspect to consider.
Brokers who care about the traders’ security online ensure a high level of protection on their platforms. Since you’ll be investing significant amounts of money in your trades, we’re sure you want to know that your money is well-protected by ill-intentioned cybercriminals.
Do your research to see the security tools the broker uses to keep their platform a safe space.
Another thing to check with the broker is whether or not they offer trading educational resources and tools. Both of these are really essential for novice traders like you.
The broker should provide educational resources that will help you gain insights about the best trading strategies, currency pairs, and how to make informed trading decisions.
As for the tools, a good broker will offer many perks from pip calculators to social or copy trading features and others.
Understand what “the right one” means to you
Understand that the right broker for your trader friends doesn’t necessarily mean the right one for you too. Every trader has different needs and personal preferences. So, you need to identify yours and choose the broker that best suits these needs.
More precisely, while all traders need a reliable and secure trading platform, others may have more specific requirements.
For example, if you are a trader from the US, US traders may not actually be the best ones for you despite what you may think. Instead, the best Forex broker for US clients may be from abroad. In the US, there’s a strict and complicated trading regulatory environment. For this reason, it’s really difficult for Forex brokers to operate in the country and provide their clients with all the perks mentioned in this article. So, a broker from abroad that also accepts US clients may be a better choice.
Don’t fall for the smallest cost
No trader can escape transactional costs, no matter what broker you choose, because this is how brokers get paid for allowing you to trade on their platform.
Now, you may be tempted to look for the most affordable transactional costs. Yet, cheap commissions may only be a sign that the trader isn’t reliable or doesn’t provide quality services.
So, in the long run, paying a higher transactional cost may be a more advantageous choice.
Deposit and withdrawal policies
Depositing and withdrawing your money shouldn’t be any difficult. It’s your money, after all!
So, look for a broker that has simple and straightforward policies for depositing and withdrawing money to and from their platform.