If you want to start trading in the foreign exchange market, this blog post is for you. We will be discussing how to find the best forex brokers and what things to look out for when choosing a broker. As with any investment opportunity, you must do your research before jumping in head first!
What are some key factors to consider when selecting a Forex Broker?
Minimum Deposit: The minimum deposit amount varies depending on the broker, and we recommend that you invest a percentage of your overall portfolio. Typically, brokers require at least $200 – $500 to start trading with them. If you don’t have enough money for this investment, it’s not recommended that you open an account.
Leverage: Most forex brokers offer leverage which means that you can trade with more capital than you actually have. The amount of money the broker is willing to lend you to make your trades varies between 0 and 200% (you must check with each broker to see how much they will loan).
Spreads & Commission Fees: You must understand the difference between a spread and a commission before choosing the best Forex Broker for you.
The Spread: The “spread” is the amount of money that differs from what price was bought from what price was sold. For example, if EUR/USD were trading at 0.9050 / 9060, this would mean that to purchase 100 Euros, you need $910, but to sell those same 100 Euros, you need only receive $905 in your account.
Commission Fees: Most brokers charge an additional fee on every trade order, no matter how big or small it may be, which can eat into your profits. Make sure to find out about any commissions before opening up an account with them!
Regulation: There are hundreds of forex brokers in the market, and not all of them are reliable or trustworthy. Therefore, we recommend you only do business with a broker regulated by an agency such as ASIC, CySEC, FCA etc.…
Website: Check out their website to see if they have any negative reviews from previous customers who have been scammed into investing money with them.
Customer Service: Another factor we always consider before choosing a Forex broker is how responsive they are when it comes down to customer service issues (e.g., withdrawing funds).
The best option when it comes down to choosing a Forex Broker is going with one that an agency regulates, has no negative reviews from previous customers and offers the minimum deposit requirement.