The forex market is one of the fastest-growing financial markets and many people are looking to get into it due to its favorable returns. As a beginner there may be a lot you may not know about forex trading and that is why you may need a forex broker. A forex broker is an intermediary in the form of a trading platform or an individual working for a firm where you can deposit your funds and begin trading in forex markets. The fact that a forex trader cannot trade in the forex market without the use of a forex broker goes to show how the forex brokers are. It follows that a beginner looking to trade in forex would need to select the best forex broker which can fulfill their trading needs. According to SFGate.com, the best forex broker is the one that puts your trading needs first and your best interest. Here are a few guidelines which can get a beginner started when selecting their forex broker.
1. Regulations
This is the first and the most important tip in looking for a forex broker. A regulated broker is one who has met the operations standards set aside by the regulations agency. They abide by those rules from the regulatory body to make sure that their practice is fair and transparent. When you are dealing with a regulated broker you have a sense of assurance that their funds are safe. Another benefit of working with a regulated forex broker is that you have an assurance they have separate accounts which keep your funds safe and also have adequate capitalization. Regulation of forex brokers also means that your funds would be safe if the platform or the forex brokerage firm becomes insolvent.
2. Trading Platforms
Many forex brokers have trading platforms where forex traders can create their accounts. As a beginner, you need to look for a broker who offers a user-friendly trading platform. This makes it easy for you to understand how your money is being invested. In most cases, these platforms are offered by third parties and a forex broker will offer you a variety of platforms to choose from and advise you on the best ones to choose from. It’s important to look for a trading platform that is compatible with most devices and can work well with a mobile phone as well as computers. This gives you the flexibility of accessing it at any time especially if you are constantly on the move.
3. Fees and Commissions
A forex broker charges a certain amount of money as fees for their services. The amount of fees paid will vary depending on the forex brokers and the kind of service they offer. There are charge spreads as well as commission which one is required to pay depending on the forex broker one is dealing with. Another thing you need to look out for as a beginner is whether the fees and commission are fixed or non-fixed. In most cases, commission may vary depending on the delivered financial outcome. Do a comparison of the different charges across the different forex brokers to determine which one meets your trading needs.
4. Ease of Deposit and withdrawals
A good forex broker is one that allows for easy deposit and withdrawal. This means that they have multiple payment methods where traders can deposit their funds and also withdraw when needed. The forex broker should offer payment methods such as wire transfer, credit card, personal or business check, and even online payment methods such as PayPal. The one thing to note is that some fees may be incurred with both the deposit and withdrawal which may vary depending on the payment method. A good forex broker would offer flexibility in the type of currency used. The primary currency in most cases is the US dollar however there are many currencies that different forex brokers work with including the Pound and the Euro. Having the flexibility of using a wide range of currencies for different countries usually saves the trader from conversion charges.
5. Experience
As a beginner, you are looking for a forex broker that has a lot of experience in the market and this means that they have been in the market for a long time. An experienced forex broker knows how to monitor the market and can be able to execute good trades by monitoring and analyzing market trends. An experienced forex broker gives you confidence that your money is in safe hands as compared to a new forex broker.