What You Should be Looking for When Choosing an Ethical Forex Broker
If you are planning to get into the forex trading industry, and this can be a very lucrative activity indeed, then you’ll need to get the right forex broker first. In fact, a good forex broker will make a huge difference to the amount of money you earn via this business. However, it’s not very easy to choose the right broker, given that there are so many confusing options available these days for you to choose from.
You do need to compare the advantages and disadvantages of different forex brokers before choosing one. It’s best to keep the following questions in mind when you are doing so.
What trading style do you follow?
It is very important to choose a trader who suits your individual trading style. There is no ‘one size fits all’ when it comes to forex brokers. Therefore, you need to find a type of broker that suits your trading style perfectly, whether you prefer to hold positions over extended periods or for a few hours or days at most. Your needs will be entirely different if you are a Day Trader or even a Scalper because of the tiny price movements involved.
What kind of trading platform is available?
The ideal forex trader will provide you with a trading platform that isn’t just user-friendly but also features spreads and fees that match your trading style.
How much margin and leverage are you allowed?
A margin account enables you to trade with larger positions than your invested capital allows. There are risks and costs associated with using the broker’s money to do trades, especially when they do not pan out as you intended. Novice traders are advised to not use high leverage accounts. Some traders offer higher leverage than others, but you need to check whether they have procedures to reduce your risk.
Does the broker offer bonuses and promotions?
Many do, in order to attract new customers and sometimes even to retain existing ones. Even so, it’s always a good idea to go through the terms and conditions with a fine-tooth comb to find out whether the bonuses are actually beneficial or not. Also, you should be aware that many of the best brokers do not offer any incentives.
Can you deposit and withdraw money easily?
As a trader, you’ll find it very important to have quick and easy access to your money. The broker should provide you with a wide range of safe, quick and cost effective options to transfer funds to your trading account. Furthermore, the transfer should be cleared quickly so that you can use the funds as soon as possible. You should also be able to withdraw money easily. In the worst cases, it might take you almost a week to withdraw your money from your trading account. On a related note, find out whether you have to maintain a minimum balance in your account, and if so, how much.
What kind of customer service can you expect?
You are sure to need assistance with your trading account from time to time irrespective of whether you are an experienced or novice trader. Therefore you need to work with a forex broker who will give you timely and expert assistance to deal with any problems that are sure to occur.
As you can see, there are many important factors to be considered when you select a forex broker. The process of selecting a good broker might take some time but you will definitely benefit from doing so. If done well, forex trading can become a very lucrative source of revenue to supplement or even replace your existing one!