Guide To Finding The Best Forex Broker In 2022

Regulations, commissions, platforms, account minimums, and fees are simply a few of the many aspects. That one must take into consideration when selecting an online Forex broker. Here is a guide that will help you choose the right broker for your forex trades. Visit multibankfx.com

Regulations

When choosing a forex broker, make sure they are well-regulated under a reliable agency. Working with a regulated broker, you could rest assured that the broker is complying with the operating standards. That have been imposed by the regulatory body. A few typical regulatory requirements are having proper capitalization and maintaining segregated accounts to safeguard customers’ funds. In addition to this, regulation keeps funds secure in case the company. Becomes insolvent and makes sure the broker is keeping up with the standards as a financial service provider.

Platform & Software

Since the trading platform acts as the window to the market, you want to work with only the most trust-worthy trading platforms. A majority of brokers will put forth a number of trading platforms to choose from. Usually, these trading platforms are provided by third-party trading solutions providers. You might even come across a set of brokers who are now focused on creating their own proprietary trading platforms to stand out from the crowd in the industry. It is not surprising that generally, these proprietary platforms turn out to be the perfect platforms to trade as they’ve been exclusively designed by the broker’s customer base.

It is a sign of a good broker if they are able to provide multiple options for the selection of platforms. This is particularly helpful as some traders may choose to trade from their desktop computers while others might want to use their smartphones.

Assess the features offered by the trading platforms and note if they offer the following:

• Comprehensive charting package
• Diverse set of technical indicators
• Single-click trading on the trading platform
• Risk management tools like stop loss order and trailing stops.

Commissions & Spreads

Contrary to traditional financial markets, the forex market operates on spreads rather than commissions. Hence, most brokers promote themselves by claiming that their services are free from any commission. ]In the forex market, you will find 3 types of trading cost structures that brokers may charge:

• Fixed spread – where the spread does not change and you’re already aware of the  spread amount.
• Floating spread – this is a variable spread that keeps changing on the basis of market volatility.
• Commission fee – measured as a percentage of the broker’s spread, this is something you should take into account before you trade.

The kind of spreads you get rely largely on your broker’s business model.

Business Model

If you’ve started hunting for a broker, you may already be familair with terms like “STP”, “ECN”, “NDD” and “Market Maker”. These are used to refer to the business model using which the broker carries out the trading operations.

There are two main kinds of brokers – Dealing Desk and Non-Dealing Desk.

Dealing Desk

Forex dealers or Market Maker processes their customers’ trades via a dealing desk within their organization. A dealing desk broker goes to the other side of the trade on your behalf. This implies that every time you open a position like the EUR/USD, your broker is exposed to the trade and they are the ones who execute it.

Non-Dealing Desk

A Non-Dealing Desk (NDD) broker carries out the trade via a third party. You will find two types of NDD brokers (ECN and STP). Both of them act as a channel between you and the market maker or dealer.

Account Types

A large number of forex brokers in the industry allow traders to choose from a selection of trading accounts:

• Micro Account – Micro trading account is the smallest trading account, where one trading lot equals 1000 units of the instrument traded.
• Mini Account – Higher up the hierarchy is the Mini account that follows the micro account. Here, a lot equals 10,000 units.
• Standard Account – The standard account is the largest account size where one lot is equivalent to 100,000 units.

If you open a Micro and Mini account, the minimum initial investment requirement is relatively low. For a standard account, even though the minimum investment could differ from one broker to another, typically, a higher amount of trading capital is required.

Customer Service

Amateur traders often do not take customer service into consideration when choosing a forex broker. The importance of customer service is often underplayed in the  overall trading experience. Customer service is not about figuring out whether you would ever require assistance but the bigger question is would quality customer service be available when you actually need their assistance? Irrespective of a trader’s knowledge and experience, they may feel the need to reach out to the customer service at some point or another. When that time comes, you should be able to reach the team in a hassle-free manner.

Value-Added Services

Since the online forex trading industry can get very competitive, some brokers would want to stand tall by offering additional value-added services which may include free stock market analysis, real-time news feeds, and trading signals. While a majority of these services are free, certain  brokers might ask for a minimum amount before you can make the most of these services.

Broker for Beginners

If you are just starting out, look for brokers who provide:

• Comprehensive trading education resources – several brokers tend to offer a variety of education materials that traders can use to polish their skills. Generally these include webinars, videos, courses, guides, and articles.
• Unlimited access to the demo account for practice trades – Demo-trading accounts are something you will commonly find with most brokers. If you are new to the world of Forex trading or want to get the hang of the platform’s workings, you can use this demo account to check your trades without actually putting your money in them.
• User-friendly trading platform – there are a number of different trading platforms on the market. While they can be both simple and advanced, as a beginner trader you should stick to a platform that is simple, quick and easy to grasp.

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