Choosing the right fx broker is really a challenging tasks for some newbie’s; especially now that there are lots of them.
The internet is filled with a lot of sweet mouthed brokers, ready to sweet mouth you to sign up with them.
Now, you’ve found one, and you think it’s the best, but still looking for tips on how to access them thoroughly. Look no further anymore. Here are 6 best guides on how to choose the right forex broker.
#1 Doing some research.
Doing some background research is a sure way to search for the right broker. It’s simply a process that requires you to surf the internet for some vital information.
But the question is –what information should I research about brokers?
Here are two major tips you need to research about them, before making a choice.
- Are they registered? – You have to verify if your broker of choice is registered. If they are registered, then you can consider them. With the help of the National Future Association you can easily verify if the broker is legally registered or not.
- What is their leverage limit? Check out if they offer a high or low leverage. The leverage is a financial support provided by brokers. This enables you to trade high asset with low equity.
For example, Broker X offers a leverage of 1:100. This simply means that your invested $1 stands for $100. With a high leverage, you can be able to trade other asset in the market.
- What is the minimum amount needed to open up with them? Knowing what it takes to open an account with your desired broker is necessary.
- Does the broker provide services, like newsfeeds, news update, analysis etc.
- What kind of spread does the broker offer; do they offer fixed spread or non fixed spread?
Thus, your little research on brokers will save you from signing up with the wrong broker.
#2 Checking out the broker online review.
Checking out for brokers’ online review will expose you on what people have been saying about them. With the internet, you could easily know what people are saying about the broker of choice.
You need to know what people are saying about the broker perhaps it might save your ass from making mistakes. It’s much more advisable not to open an account with a broker having lots of negative reviews.
Definitely, you’ll see both the good and bad reviews, so don’t expect to see a broker with 100percent positive reviews. After, compare their reviews independently to know if it has more of good than bad and vice versa. Knowing their reviews will boost up your confidence when making your choice on who to invest with
#3 Questioning your broker.
Questioning your broker is one of the smartest ways of verifying if the broker is the right one for you. The fact is that majority of new forex investor are scared of building a flowing relationship with their broker.
Think about it. You’re here to invest; if you are scared to question your broker, how can you trust him? Trust they say ‘’is the holy grail of espionage’’.
It is much advisable that you invest on a broker that you are free to interrogate. Even sometimes traders find it challenging to ask the right question.
Here are 10 reasonable questions to hit your broker. Take proper note of their responds. It’ll help you analyze them better than you think.
#4 Offering verities of investment options.
When selecting, you have to consider the one with many investment options. Brokers with many investment options for example- brokers that have a lot of currency pairs to trade on grants access to varieties of currency to trade on, in the market.
For instance, Broker x has EUR/USD, JPY/USD, GBP/USD while broker y also have NZD/USD, JPY/USD, GBP/USD,EUR/USD,AUD/USD.
Looking at both of them, who do you think has more investment options? Of course it’s the broker y. It provides you with the opportunity to trade more currency pairs like: NZD/USD, AUD/USD.
#5 Comparing their effectiveness.
Also, one of the best guides you need to consider when choosing a forex broker is their effectiveness. With the help of the demo account, you can test for effectiveness by comparing the uniqueness between brokers.
Here is how to go about it.
All you have to do is to sign up with the demo account of your choice broker and also with the other broker. Then check out for some specific uniqueness between them. Like:
- How fast or slow do they respond to your execution order.
- The changes in their price actions (are they changing at same frequency?).
A newbie once want to analyze the effectiveness of his chosen broker. He was advised by his tutor to open two demo accounts with his choice broker and other broker.
His choice broker was G and the other was H. After entering the market simultaneously with the two, he noticed that the execution speed of H was faster than G. And also their price actions differ by 0.0001. H tends to respond much faster to the market than G.
Just by implementing this method, he was convinced to see that his choice was not really the best. This is why you have to be much more careful in choosing your broker.
NB: Your first step to successful trading starts by choosing the right broker.
#6 Choosing brokers with active customer support services.
Considering the active customer service, it‘s very much advisable you go for brokers that value you. In other words, broker that value your worth as their customer.
With brokers that have an active customer’s support service, you can easily reach them for your compliance. And also they see to your complaints as soon as possible.
However, brokers of opposite character wouldn’t have your time or might not respond to your need urgently.
This is why you have to be careful and watchful when choosing a broker. Still, don’t choose a broker because you think they are great, choose a broker because you know that they are great.