Selecting a forex broker isn’t easy. When doing this, you need to be aware of many things:

  • Security and Regulation
  • Trading products
  • Instruments for Trading
  • Trading platforms

Apart from checking these, keep in mind the forex market is uber-competitive. And high competition can offer both advantages and disadvantages. On one hand, you have got brokers lowering their prices to nearly zero just to fetch more customers. On the other hand, not all these forex brokers are trustworthy.

So, is there a way to choose a good broker? We’ll answer that in this article.

There’s no “Perfect Broker.”

Right off the bat, there’s no such thing as a “perfect broker.”

There’s always something. For example, a broker might offer you cheap services. But the same broker has a not-so-good reputation among traders. Maybe it’s not regulated. Or maybe it doesn’t have sufficient fund protection policies. Maybe it’s a scam.

On the other hand, you might find a broker that’s regulated, trusted, and highly popular among traders. Its platforms and trading instruments are excellent. Additionally, customer service is super accommodating and friendly. It has everything you need. But the prices will drain your pockets. Maybe the transaction costs are high. Maybe the trading instruments aren’t cheap.

So, when choosing a forex broker, remember to keep a balance between reasonable prices and excellent services.

Importance of Regulation

Now, you might be looking at hundreds of forex brokers at the moment, and you just can’t choose which one’s right.

To help you narrow down your choices, check their regulatory status. This step is the first and most crucial step you need to take. Regulated brokers typically offer the best policies and security clauses for traders.

But you should not go for just any regulator. There are top tier regulators, and then there are those that just don’t cut.

So, when choosing a forex broker, remember to keep a balance between reasonable prices and excellent services.

Top Forex Regulators Around the World

In the United States:

  • National Futures Association (NFA)
  • Commodity Futures Trading Commission

In the United Kingdom:

  • Financial Conduct Authority (FCA)
  • Prudential Regulation Authority (PRA)

In Australia:

  • Australian Securities and Investment Commission (ASIC)

In Switzerland:

  • Swiss Federal Banking Commission (SFBC)

In Germany:

  • Bundesanstalt für Finanzdienstleistungsaufsicht (BaFIN)

In France:

  • Autorité des Marchés Financiers (AMF)

In Canada:

  • Investment Information Regulatory Organization of Canada (IIROC)

Trading Products

When we say trading products, we mean every asset the broker offers. And since we’re talking about forex brokers, they should provide forex products. Essential forex products include all the major and minor pairs.

If you’re not familiar with the majors yet, here they are:

  • EURUSD
  • USDJPY
  • GBPUSD
  • AUDUSD
  • USDCHF
  • NZDUSD
  • USDCAD

These are the essential pairs you may trade. They get the most significant trading volume in the market, as well as the broadest news coverage. So, it’s easy to buy them and search for information.

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Trading Platforms

After checking out what you can trade with the broker, check out where you can trade those assets. The trading platforms are your portal to the market. They’re the bridge connecting you to the world of currencies and currency pairs.

In the forex market, the most popular trading platform is MetaTrader4.

What is the MetaTrader4 (MT4)?

MetaQuotes developed the MT4 in 2005. Although traders can use it to trade stocks, indices, cryptocurrencies, and commodities, they mainly use it for forex trading.

Most forex brokers offer the MT4 platform to clients as an industry standard. It comes with excellent trading features such as the following:

  • Built-in indicators
  • Timeframes
  • Economic calendars
  • Drawing tools
  • Charting tools

And many more. The MT4 is a useful, high-quality platform every trader needs in forex trading. Also, traders can use them on different devices.

A forex broker can also offer platforms other than the MT4. The newer platform and successor of MT4, the MetaTrader5, is also now available in many brokerages. Other times, forex brokers develop their in-house platform. Such platforms typically fit the more specific needs of the broker’s clients.

Read Broker Reviews

Reading a forex broker review goes a long way.

When you finish checking the broker’s background, products, and platforms, it’s time to read from people with first-hand experience with the broker.

Reviews from websites are usually a treasure trove of information about the broker. They talk about more things other than products, platforms, and regulatory status. You’ll get to know the broker’s customer service. Are they accommodating? Friendly? Are they rude? Unprofessional?

You’ll also know how the broker ranks in comparison with others in the field. Are they popular among traders? Do they receive negative reviews from angry traders?

Moreover, with readily available access to different broker reviews, you will not be dealing with a broker with zero clues on what you’re looking at.

Reviews from websites are usually a treasure trove of information about the broker.

Conclusion

With the advent of retail forex trading comes the emergence of retail forex brokers. You can search for thousands of brokers, and you will see how the industry is booming.As a trader, it’s your responsibility to check the broker information as thoroughly as possible. Never forgo the background check.

Finally, finding the right broker is one of the first crucial steps you’ll take if you’re serious about succeeding in the forex market.