These days there’s so much competition in the retail forex market as well as so many brokers to choose from. Rather than becoming bewildered when navigating through all the brokers available, you should look for these 6 essential qualities in a broker.
1. Broker Security
The utmost importance is that your broker has high level of security, especially since you will be giving them control of your money. For your safety, you should ensure that your broker is both legitimate and credible.
Below is a list of countries with their corresponding regulatory bodies:
- United States: National Futures Association (NFA) and Commodity Futures Trading Commission (CFTC)
- United Kingdom: Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA)
- Australia: Australian Securities and Investment Commission (ASIC)
- Switzerland: Swiss Federal Banking Commission (SFBC)
- Germany: Bundesanstalt für Finanzdienstleistungsaufsicht (BaFIN)
- France: Autorité des Marchés Financiers (AMF)
- Canada: Autorité des Marchés Financiers (AMF)
Before you work with any broker, you should make sure that your broker is a member of one of the regulatory bodies mentioned above.
2. Transaction Cost
Regardless of what you do, there will ultimately be transaction costs. Naturally, you will try to find the best deal with the most affordable rates (commissions or forex spreads). However, sometimes you get what you pay for.
By paying a lower transaction fee, you may obtain a less than a reliable broker. It is pivotal to find the equilibrium between the prices you are willing to pay and the quality you deserve.
3. Deposit and Withdrawal
A good broker should allow you to efficiently and comfortably deposit funds and withdraw your earnings whenever you feel like it. There should be no motivation for them to deny you access to your profits unless they need your funds to facilitate more trades.
4. Trading Platform
In the online forex environment, trading occurs through the brokers’ trading systems. So make sure to test out what platform the broker has to offer. As a user, it should be comprehensible, user-friendly and easily navigable.
Some even offer unique tools to make your trading that much simpler.
Your broker should be looking out for your best interests. Consequently, they should be filing your orders at the best prices. This means you should be selling and buying as close to market price as possible.
If you click buy for a certain trade, you should almost instantaneously get filed at that price or within micro pips. This slight pips difference in price can make winning that specific trade quite difficult.
6. Customer Service
Brokers should be there helping with accounts and technical support when you need them the most. If something goes awry, it is fundamental that you can get in contact with them as soon as possible.
Some brokers may try to fool you into trusting them when you open an account, but when you need their support they are nowhere to be found. So be on the lookout for a trustworthy and truly helpful broker.
Risk Warning: Users should be aware that all investment markets carry inherent risks, and past performance does not assure future results. Trading of any kind is a high-risk activity, and you could lose more than you initially deposited. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 73-89% of retail investor accounts lose money when trading CFDs. Please be sure you thoroughly understand the risks involved and do not invest money you cannot afford to lose. Your capital is at risk. Advertiser Disclosure: TopBrokers.Trade is an independent professional comparison site funded by referral fees. The compensation TopBrokers.Trade receives is derived from the companies and advertisements featured on the site. Due to this compensation, we can provide our users with a free comparison tool. Unfortunately we are unable to list every broker or exchange available, however, we do our best to review as many as possible.