Here’s How to Pick Your Next Forex Broker

Don’t get sucked in by marketing and flashy advertisements when you’re searching for a forex broker. If you want to end up with someone who will take care of your particular needs, it’s imperative to shop around. Just as you’d do when buying a new car or a home, look at the big picture and evaluate all your candidates according to a list of pros and cons. There’s no perfect car or house, and there’s no perfect forex broker either. Your overall goal should be to find one whose offerings are a match for your needs.

Forex Broker

Maybe you don’t trade every day, or perhaps you have a small budget. Additionally, some people like to buy and sell several different instruments, like stocks, bonds, commodities, and foreign exchange pairs. Others simply want to deal with a single instrument. The search is all about knowing what you want and finding a site that gives you as close to 100 percent of those things as possible. Before you decide, get answers to the following questions.

Are There Recurring Fees?

It’s easy enough to snag a new customer special and open an account with zero fees. But it often happens that later on you’ll have to pay fees for all sorts of activities, like withdrawing funds from your account, adding money to the account, engaging in buy or sell transactions, selling short, or not making enough trades within a given time period. Though many of these charges are small, they add up quickly and eat into your profit margin faster than you think.

What is the Broker’s Reputation?

Spend a few hours scanning the reputable review sites to see what people are saying about your candidates. Don’t give too much weight to a single review. It’s wiser to read several dozen and get a general feel for how customers view each of the sites you’re considering. You might read an AvaTrade review or another firm’s review, for instance, that only discusses stock share trading. That information won’t do you much good if your intention is to buy and sell forex only. So, stick to reviews that answer some of the key questions that interest you most.

What Platforms Do Traders Have Access To?

It’s odd that prospective traders often have a love for a single platform. Whether they had a great experience with it in the past, or a friend talked it up in glowing terms, they are focused on using that platform alone for all their activity. This can be a trap because traders’ tastes and preferences change as their expertise grows, and they often decide to switch platforms. For that reason alone, it’s usually a good idea to opt for a brokerage that allows its customers access to multiple platforms.

What Resources are Available?

The word resources in this case can be loosely translated as support. Find out if your prospective service providers give every customer an account manager who can be reached during business hours for inquiries. Plus, it’s nice to have a tech helper you can turn to if you have difficulty placing an order or getting the data feed. Finally, see if the site has an extensive customer education section that lets you read about topics related to profitable techniques, economics, and the securities markets. Regular tutorials hosted by niche experts are another excellent resource to inquire about.

What About Spreads and Other Trading Conditions?

Always check out what kinds of conditions and spreads are offered to clients. For example, some companies include spreads and commissions with every single transaction, include overnight fees based on certain activities. This is one of those areas in which you don’t want to rely on reviews. Contact your short list of candidates and ask them directly about spreads and other conditions. Don’t be scared off by inactivity fees and annual administrative charges because they are commonplace at most of the better brokerage firms and aren’t substantial. The point is that everyone is going to have their own set of conditions, so just make sure the expenses, from your point of view, are reasonable and relatively low.

Is the Instrument Selection Adequate?

Instrument selection is a very personal factor because everyone has their own favorites. But, like the situation with platforms, it’s smart to go with a firm that offers multiple instruments in addition to your sole favorite. That way, if your tastes and strategies change through the years, you can simply switch instruments without having to pack up and move to another service provider. Besides, the brokerage firms with the best reputations usually offer a generous menu of choices for all their customers.


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