Forex stands for foreign exchange market where almost more than $4.5 trillion in average is traded daily, which makes it the largest financial market. As it doesn’t have a central market place, the trader needs to use a broker to implement the trading operations. When you want to join the Forex market you must need to choose a broker. But choosing the best one for you is not an easy task if you don’t know what you should look for if you won’t choose a broker. In this article, we are going to talk about key things that are mandatory in the Forex broker so that you can choose the best one for yourself.
When you are looking for Forex broker on the internet then you will find plenty of then with an eye-catchy website and you might become overwhelmed by them. But you should not be overwhelmed so easily instead of you should check there about us. You should check if they are members of the National Futures Association (NFA) and they must have to be registered by the U.S Commodity Futures Trading Commission (CFTC) as a Retail Foreign Exchange Dealer and A Future Commission Merchant. As you are going to invest lots of money to them and will make several transactions daily so you just need to check if they are trusted and have a license for doing that.
Leverage and Margin
Leverage makes the Forex market different than others because it gives you the power to participate in a big amount of trade with small capital. Forex brokers give you a loan which is called leverage according to your account margin. For example, if you are using 50:1 leverage then you can hold a $50,000 position with just $1,000. Leverage gives you a favor when you are in profit in your trades and it can also ruin your account by multiplying the losses you may face. So, you must look for how much leverage and margin a broker is providing before giving a second thought about it. Those who don’t know about Saxo, visit now to see the amazing offers they have for the retail option traders.
Commission and spread
The broker earns from the commission they take from each trade anyone makes. It is called spread it determines by the difference between the “Ask and Bid” price of any currency pair. You will find lots of brokers where you will see that they are offering you trade with no commission whereas they are using wider spread to earn more. So with a wider spread, it will be very hard to make money from this market rather than trading with a lower spread. So before choosing a broker look for what type of spread they are offering and check the spreads if they are matching with other brokers.
A broker must have to allow you to trade with any initial amount rather than fixing up an amount that you must need as an initial deposit. Though we will not encourage you to start trading with a low balance like $50- $100 a trader must have to give an opportunity the start trading with those amounts.
Deposit and withdrawal
A good trader will always give you to deposit and withdrawal very easily without any delay.
So read about their transaction policy if you are suitable for that.
Currency pair offered
Forex is the biggest trading market in the world so your broker must have to give you the power to trade in all types of major and minor currency pairs and there should not have to be any restriction in that. If a broker allows you to trade more than just currency pair that will be best and you might consider that broker.
Brokers must have to give 24/7 authentic customer service and you can contact support any time you want. They just need to provide you solution very quickly if you are facing one. And it is one of the most important things you must need to consider when you are trying to look for a broker.
So, before investing a penny in a broker look these points so that you can have a safe trading experience.