How to choose the right broker for Forex trading?
A trader wants to see the broker as a neutral party, if not a real assistant and prompting person, who is not going to throw sand in the wheels, not to make fairy-tale quotations and not to steal clients' capital.
When choosing a brokerage company there are 10 main rules which every trader should know.
1. A broker must have a history.
Those companies which have recently appeared on the market can be divided into two categories::
- Those trying to improve the world of trading and attract clients by extending terms that other companies do not have;
- One-day brokers who often change their name, website and location, etc.
At the initial stage it is difficult to determine the reliability of the broker, so it is recommended to work with reliable companies, studying the reviews of their work published on independent websites.
2. Super great offers that are offered to the client.
This, at the very least, should alert you. You should not believe the fairy tales, remembering that free cheese comes only in a mousetrap.
3. The amount of commission.
You might think that a good broker is one with a low commission. But it's not quite true. The broker will always get his own. Something may be more and something less. And the other one will take the opposite.
The situation here is somewhat reminiscent of the mobile phone operator market. Different tariffs, but you will still spend about the same amount of money.
4. The bigger the broker, the better?
That's what many traders think. And also if it's related to a large state bank, that's perfect. An overseas broker is the top of dreams.
It makes a lot of sense. But a big broker is not always a good thing. Because an individual client is a small grain of sand to him, and he doesn't really care about this small client. Here there are hundreds of clients per manager and you just can't get in touch with them.
A broker's relationship with a bank is not always a guarantee of reliability either.
With foreign brokers there may be a situation where it is very easy to deposit money, but much more difficult to withdraw it. There may also be no Russian-speaking manager, and in general there are difficulties in communication when dealing with various problems.
5. Bonuses, promotions and competitions.
This is always a plus. For example, a bonus when making a deposit.
6. Availability of ECN accounts.
These are accounts with direct access to the interbank. Although not every trader needs them, but it's a good indicator.
7. Availability of MetaTrader 5.
Most of the forex brokers do not offer the possibility to trade on the 5th version of the platform. It should be said that the community of traders is not very enthusiastic about MetaTrader 5. Most of them continue trading in the 4th version. But for beginners it's better to start trading with the new version of MT, because the future is behind it.
8. Participation of the broker in ratings, winning all sorts of nominations.
This indicator is not a guarantee of reliability. After all, any nominations, ratings are commercial projects, where the winner is the one who pays more money.
It is better to pay attention to the participation of a broker in the Center of regulation of currency financial instruments and technologies - SRO NP CRFIN. Its website is at this address: crfin.ru, and the blacklist is here: crfin.ru/ru/blacklist. It is the only organization in the Russian Federation that actually regulates relations between Forex traders and brokers.
You need to pay attention to the level of service provided. For example, whether there is a personal manager who is ready to answer all the questions, convenience of deposit/withdrawal of funds, etc.
10. Availability of dealing, training courses, analytical reviews from professional traders of the company.
It is very important for a brokerage company to have a dealing room (a specially equipped room where traders trade using the broker's communication facilities) where they can come and trade. It is excellent if every trader is provided with a personal manager.