Top Factors to Look Out for When Choosing the Best Forex Broker

There’s no doubt at all that forex trading is one of the easiest ways to make money online today if it’s not the best. However, when we want to start off with forex trading especially for beginners we are faced with challenges.

Explained below are the top four factors to check out if you want to select the best forex broker in Sydney for beginners in forex trading.

Registration and History:

Of course, no trader would like to deal with “forex scams”. This is why you have to find out whether the broker you’ve chosen is a registered with regulating authorities. Research and find out if the broker is registered with forex regulating authorities like NFA (National Futures Association) for brokers in the United States or Commodities Futures Trading Commission (CFTC) if the broker is based in the United Kingdom.

Check the history of the forex brokers as most brokers that are successful in business have already gained trust and reliability among its Clients. This you would be able to see when you search Online in forums discussing about that particular broker.

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Reasonable Spreads:

As a forex trader, you do not pay your forex broker any dime for their services because they are compensated through Spreads when you begin to trade. Whether you’re in loss or profit your forex broker collects the spreads are collected during trading. Spreads could be as high as 10pips or even as low as 1-2pips depending on the broker. So, to determine the best forex broker in Melbourne it’s necessary to check if your forex broker is one that operates huge spreads on their customers’ accounts.

Simplicity of the Trading Platform:

Most brokers out there are very complicated padded with various instruments of trading. This often leaves the beginner confused because he does not know where and how to start off. In order to make execution of orders easy, quick and neat it is advised to choose brokers with a simple trading platform.

Practice makes perfect:

As a beginner in the forex market, you shouldn’t just jump into live trading with real funds to avoid the risk of losing your money. You would want to practice trading to see how you’ll be able to perform and execute your skills in a real live trading account.

4 Things to Consider When Choosing a Forex Broker

There are a number of factors to consider when you choose a Forex broker and when you select a Forex Broker that will suite you to help you do so here are a list of 10 of the key factors you should consider.

Reputation

This may seem like an obvious place to start but surprisingly this is quite often overlooked in people’s quest for profits. C out several Forex forums to see what other traders have said about their experiences with brokers is a simple place to start and this will help you to get a good idea of the general user experience as well as details about the level of service and support you are likely to get from best Forex broker and probably most importantly, payments.

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Foundation and legitimacy

With the rising number of online Forex brokers there are a number of checks concerning their foundation that should be made although most Forex brokerages are usually either associated with or are part of a bank or large financial organization. Brokerages that are associated with large financial organizations or banks are not only backed up by funds from their Forex trading but also have other income streams and investments which means they don’t have all their eggs in one financial basket.

Having fund insurance against fraud or bankruptcy is good to have as this means you aren’t relying just on being paid from their backup investments which might otherwise mean a longer wait for your money should they be experiencing any financial difficulties.

Note: It is also worthwhile checking out any parent company’s website for any financial information that can assure you that your funds are covered and secure.

Execution

Quite simply this is how they conduct their business.

There are two main business models that best Forex broker in Sydney use, Electronic Communication Network, (ECN), and Market Maker.

Other aspects of the Forex brokers’ execution of their business are:

  • Do they use automatic execution for trades? If they do not have this as part of their model then how fast is their average order execution?
  • How much are you allowed to trade without having to request a quote?
  • Do they offset client trades?