Choosing the best brokerage partner for your future investment activities can be quite hard. Believe me, it is not a simple process because this market is crowded. It’s still very important to take enough time to do a little research before you sign up for your trading account.
Here are some things you should check for when looking for the best forex brokers to suit your needs.
1. Trading Costs
The best forex brokers shouldn’t charge an upfront fee or commission for trading through their account. Forex brokers are paid by charging you a spread. This is usually represented as a difference in price between the bid/ask price. As you enter the market, the spread is charged. You shouldn’t be charged again when you exit the market.
Always check the spread for each different broker to be sure you aren’t paying too much, as this could impact your total profitability.
2. Customer Service
Check that the broker you’re considering has access to customer service facilities in or near the same location as you, preferably within the same country. If something goes wrong with your account, you want to know you have access to technical support on the same time-zone as you when you need it most.
3. Demo Account
Some companies offer forex broker demo. Always check to see if the broker has a demo account option. This will let you place a few dummy trades using a mock account first to see how the broker’s platform works for you and your trading style.
4. Deposit Amount
The best forex brokers may not always be the right ones for your particular trading style. Those who advertise really low spreads may require high amounts of deposit from you, or may not offer the option of trading with micro- or mini-accounts. Other brokers may require that you place a minimum number of trades, or they may only offer access to high-volume traders. High volume traders are needed especially for PAMM Accounts that are offered for example by HotForex broker.
Be sure you understand how much deposit (some US brokers require higher first deposit over $5k) while Cyprus based brokers like Etoro or Plus500 broker require only $50 – $200 initial deposit which is fine for most small investors. Also be sure you check the regularity of trades expected and what size contracts (e.g standard lots are quite huge and can require higher capital starting from 10k and up) are expected through your broker account before you sign up.
Last but not least do your own due dilligence and check the reputation of the company on internet. Go to forums like ForexPeaceArmy.com and read the stories writtenby real clients who have been trading with that company. You will quickly learn that not all firms are equal. Some are better than the others. Some are stop-loss hounters, some will never return the deposit (aka forex scammers) and some are just average bucket shop companies who are there to make quick bucks without providing serious service. Never forget that also big firms can go bust, which almost happened to FXCM in January 2015, although was saved by another bank just in time.