Considering that there are many Forex brokers
, it is hard to make a decision on which one to open your trading account.
All of them have different advantages, desadvantages,weaknesses, capabilities, features.
Here you have a list that can help you decide which broker to choose for your Forex business.
1. Is the broker you want to use Regulated ? You must be sure about this first criteria. Usually, all the regulated brokers must submit financial reports to regulatory authorities
. In case that they don’t do it, the regulatory authorities may terminate their membership. It is a measure to keep transparent the financial reports.
There are local regulatory authorities, for every market. The US based brokers are regulated by the National Futures Association
and Commodity Futures Trading Commission. The Swiss based brokers are regulated by the Swiss Federal Department of Finance and so on.
When a Forex broker
is regulated, this allows investors to dispute any resolution, increasing the investor protection.
2. You must establish the trading platform and the trading conditions with the chosen broker.
The most important factors are:
Platform execution – you must know how fast and how consistent are the execution of the trades. It should be fast and transparent executions during normal market conditions.
Spread- the smaller the spread on currency pairs the better the conditions are for investors and traders.
Safety of funds- you must be sure that your trading funds are kept in a segregated account or at least insured.
Fractional trading- you must ask your broker to allow you to trade on fractional basis. Instead of trading full
lots , they can allow you to trade fractional lots, like “22,458 units”, not “23,000 units”. This is a good measure to avoid trades risking percentage
of the balance on each trade.