Getting the right broker for you is one of the major stepping stones in forex trading, it can be seen as a big step and there are so many of them out there, thousands, in fact. It can be pretty hard to work out which one to go for. We have set out some ideas of the things that you should be looking for, to ensure that they suit what you need and to ensure that they are the right broker for you.
One thing to keep in mind, your choice is certainly not final. More than just a few traders have changed their brokers part way through their career, many jump around then quite a lot at the start in order to find the one that is right for them, so don’t worry if you do choose one and then want to change, go for it. Do what you need to do in order to find the one that is right for you. So let’s take a look at some of the different aspects of a broiler that we need to look at.
This is the main thing that makes a broker accessible or not, there are of course after things, but if a broker is requiring an initial deposit of $10,000 then if you do not have that much, you simply won’t be able to join and sign up with that broker. If you are wanting to start with only $500, then you will need to try and find a broker that allows you to start with just that amount or even less. This is becoming less and less an issue as time goes on with many brokers lowering their initial entry requirements to allow more people to trade, trading is far more accessible now than it was a few years ago.
Minimum Trade Size
This has caught a few people out, the minimum trade size available in trading is 0.01 lots on a standard or ECN style account, there are lower of course on cent accounts, but very few people use those sorts of accounts these days. If you are starting with a lower balance under $1,000 then there is no point joining a broker that requires you to trade with a 0.10 lot size or more as a minimum, this will mean that you cannot employ proper risk management. Many brokers now allow for trades as low as 0.01 lots, but it is important that you keep an eye out just so you do not get trapped with a broker or having to pay fees in order to get your money back out.
Traders love to trade with leverage, brokers seem to be offering more and more as time goes on, higher is not necessarily higher, but for certain strategies, you do need slightly higher leverage. If you are planning on using a strategy that requires a larger leverage, then there is no point in joining a broker that only offers 1:10 or 1:20, you may need one offering 1:200 or even higher depending on the strategy. So be sure to check that the brokers offer leverage matches that required of your strategy.
Throughout the internet, you most likely would have seen a lot of people saying that you must have a regulated broker and that all unregulated brokers are scammers. This is certainly not the entire truth. There are many regulated brokers out there that have done some not so nice things to their clients, such as manipulating the markets for stop losses, then there are unregulated ones that have been the perfect broker. Regulations can give you a little bit of protection for your funds, but it certainly doesn’t make the broker perfect. So this is something that you will need to decide for yourself, whether to look for one that is regulated, which comes with certain restrictions, or an unregulated, unrestricted account.
Are you actually able to contact the customer service steam? There are a lot of brokers out there where you can’t actually contact the customer service team, they simply don’t pick up. There are also brokers out there which don’t have a direct line to them, making you jump through hoops, these sorts of brokers you need to avoid. You need a broker that has easy access and quick access to their customer service team, afterall you are calling for help, so it would be good if there was actually someone there to help.
Certain brokers do not let you trade with them if you are from certain countries. Before you decide to join up, look through the site, or get in touch with their support team to find out whether or not people from where you live are allowed to trade with them. The last thing you want is to go through the signup process just to find out that you cannot trade with them. These restrictions are normally set by the regulatory body or sometimes just the broker themselves as a preference.
There are a lot of different reading platforms out there, the majority of brokers will offer the big ones like MetaTrader 4, MetaTrader 5, and cTrader, then there are brokers that only offer their own platforms or a simple WebTrader platform. If you are planning on using a certain robot or expert advisor, then you need to make sure that the broker that you are using is offering the right trading platform for the robot. You should also take note of the features that are available on the ones that have their own platforms, some of them can be really good, while others can lack a lot of basic features. So check that the platform you want is available before signing up.
If you are someone that likes to trade all the time or someone that likes to trade cryptocurrencies, some brokers are now offering 24 hours trading 7 days a week. If you are someone only interested in the currency side of forex, then you don’t really need to look out for this sort of thing.
It is important to check that the broker that you are thinking of using allows you to deposit and withdraw with the method that you wish to use. Most allow for Bank Wire Transfers and for Credit or Debit Card deposits, but if you want to use something else then you will need to double-check. There are some brokers that only allow cryptocurrencies as a deposit option, but whatever you wish to use, there will be a broker out there that is compatible with it.
Deposit / Withdrawal Fees
Fees, not a nice thing at all, check with your broker, some are completely free while others charge for both the deposits and the withdrawals. If a broker is charging to simply deposit then they are most likely best to avoid, there is no reason to charge for this and they are simply just trying to make more money. Many brokers charge for withdrawing, this is fine, just make sure that it is not an extortionate amount which will end up eating into your profits.
Online reviews can be both good and bad, that is the quality of them as well as the ratings. You need to take many reviews with a pinch of salt, there are a lot of people out there giving fake reviews or sites that are affiliated with brokers giving good reviews to that broker, but negative to everyone else. You need to use review sites that are known for being honest and not random sites on the internet. So while these reviews could potentially prove useful, do not take their word as gospel.
Peer reviews are a better form of review, these are coming from someone that you actually know, someone who has used the broker, and someone that you can hopefully trust. These do not come from random people over social media, only people that you personally know. If they have been using a broker for a while and have not had any issues, then the broker must be doing ok, so that is a good sign. Do not jump blindly though, you still need to ensure that it matches your other requirements and that it will provide you with the features that you need, but this personal endorsement is a good sign that there may be a decline break to go for.
Not something that we personally go for, but a lot of people, especially those without larger balances are often on the lookout for bonuses, no deposit bonuses, or deposit bonus, they both work in similar ways. The problem with them is that they often come with pretty hefty terms and conditions, ones that make it very hard to actually withdraw any of the bonus. So if you are looking for bonuses, check the terms, there are some decent ones out there but the majority are not good at all. So again, it is all about doing your research, but many often prefer to work with their own capital rather than a bonus at all.
So those are some of the things that many people look for in a broker. There are of course other things that you may like to see, you just need to remember that you need to do your research before signing up with a broker. There are a lot out there, so it may take a while, but if you find a good one, you will be set for the rest of your trading career.