If you want to dive into the world of trading, the retail forex market is one of the most lucrative options available. You can be an active trader, holding positions for a short period of time and adding to your retirement or earning extra income in the process.
Choosing the right broker will be the hardest part of getting started.
The crucial components of choosing a broker are:
1. Start with Security
You need a high level of security. You’ll find that there are a lot of scams and vulnerabilities that hackers are trying to exploit on trading platforms. The high volume of trading and money that passes through these platforms make it a high target for hackers.
Check your country’s regulatory body to ensure that the broker you choose is regulated.
You can better protect yourself by consulting with these regulatory agencies, which include:
- NFA (US)
- CFTC (US)
- FCA (UK)
- PRA (UK)
- ASIC (AUS)
- SFBC (Switzerland)
Any broker you choose should be part of one of the main regulatory bodies. If the broker is not part of these bodies, they have less oversight and security.
2. Strong Underlying Trading Platform
The underlying platform will make a world of difference. You should select Forex & CFD broker with MT5 trading platform. MT5 is the leading platform that brokers use to offer trading. The strong usability, charts and easy usage make MT5 great for beginner and expert traders alike.
Every platform has its own unique features, such as:
- Charting tools
You may even find a few brokers that provide you with educational resources that can help you learn how to trade in forex.
3. Transactions Eat into Profits
Every time you make a trade, you’ll have to pay a transaction fee. Brokers require transaction fees to make their money. You’ll either have to pay a commission or the spread. You’ll want to sit down and research the rates that the broker charges.
Cheaper rates are obviously the best option, but you may be sacrificing reliability.
You’ll want to pay slightly more for a reliable, trustworthy broker that may have higher costs. A balance between transaction costs and security should be found.
If the transaction costs are too low, you may be dealing with a broker that lacks the security to keep all of your information safe.
4. Hassle-Free Deposits and Withdrawals
Good forex brokers will make depositing and withdrawing money a breeze. A lot of fly-by-night brokers will make withdrawals more difficult or impossible. When a broker will not release your funds, there’s a good chance that you’ve become the victim of a scam.
Reviews and ratings can help immensely when it comes to a broker that holds on to your money or releases it like they should.
Funds should only be held onto when you need to initiate a trade. Withdrawing and depositing funds should be smooth and streamlined.
Forex can be a very profitable way to trade. When you choose a broker, you have to conduct your own due diligence to ensure that the broker is qualified and legitimate.