Forex trading is becoming a full time profession for millions of traders around the globe. There are also a number of newbies who are looking to enter the forex trading market.
However, to really get into it, one needs to get a good broker. The choice of a forex broker will play a major role in determining whether you end up being successful or a failure.
For those looking to enter the market, here are some key factors that you must consider when selecting a long term forex broker.
Proper Regulation
The first factor that people should check is whether a broker is properly regulated. A regulator broker is a licensed broker that is financially stable, follow all the rules of the market and respects fair trading practices. A broker that does not have a clean regulatory record is most likely to cause problems for those working with them. Most forex brokers list down the regulators that they are licensed with on their website so this should be easy to check.
Trade Approach
There are generally two approaches available and one must choose carefully. There are brokers who are market makers and deal with desks. This format will ensure that whatever a trader gains will end up being a loss for the broker and whatever you lose will be a profit for the broker. The second type of brokers are STP brokers which take a trader’s orders directly to the interbank market, giving them little control over the price.
Security And Safety
Online trading will require you to release both personal and financial information which can make you vulnerable. This is why when you are choosing a long term forex broker, security should be a priority. Find a broker who has installed the latest SSL encryption and has a solid privacy policy to ensure that no private information is shared easily.
Costs and Expenses
Trading is not free. One of the ways a broker profits is by taking a cut of each trade. Some traders take a bigger cut than others. Additionally, they might charge for extra expenses. For prospective traders, it would be a good idea to look at the expenses that a broker may place on their trades. This ensures their profit is not reduced so much.
Multiple Products
Next, the forex trading world handles more than just currencies. Some brokers can handle stocks, commodities, and more. For traders, this flexibility is a bonus since more markets mean more chances to profit. Traders should choose a broker that handles more than just currencies for extra earnings.
Customer Support
Finally, traders will want a broker that works with them to resolve any issues. Ease of contact should also be taken into consideration. A broker should have an e-mail, a telephone number, a contact form on the website, and a live chat option ideally available. Plus, their responses should be friendly and welcoming so that dealing with them is not a pain.
