Forex brokers like fxgm offer a range of incentives to attract new traders (e.g. extremely good leverage), and this often makes it a challenge to choose between brokers. But for the sake of minimizing risk, we’ve outlined a few crucial factors every potential trader needs to consider when comparing the services of Forex brokers.
The best Forex brokers
Given that the Forex market operates as a decentralized system without any precise central exchange or clearing house, it makes practical sense for traders to stick with the most reputable Forex brokers. Organizations such as the U.S. Commodity Futures Trading Commission and the National Futures Association provide self-regulation to the market by developing rules and procedures that protect the consumer and the integrity of the market. Membership to such organization goes a long way in building trust among traders.
Account trading package
Forex brokers offer a unique set of options for the trader- such as:
- Margin and leverage: a high leverage (e.g. 400:1) means the trader can make great earnings, but it also magnifies the risk of loss, making it a dangerous strategy for long-term trading. Good brokers understand this, and they offer a more practical scale of leverage.
- Initial deposit: again, this varies with each brokerage firm but generally there are standard ($100,000 range), mini ($10,000 range), and micro accounts (less than $10,000). The higher the trading amount, the more leverage you have.
- Deposits and withdrawals: most new brokers offer several payment options for deposits and withdrawals- e.g. wire transfers, Credit Card, PayPal, checks, etc., and a charge may apply for the service.
- Trading platform: older MT4, MT5 platforms are still in use, but some traders prefer a web-based platform with a host of tools for managing trades. A good trading platform has a good UI, but it also makes it easy to execute and exit trades, and it has clear “buy” and “sell” buttons.
Support is one of the essential components of a goof broker service owing to the volatile nature of Forex trading and the fact that markets are open nearly 24 hours a day. Auto-attendant services are not enough to handle specific trade concerns, which means a serious broker will offer a live assistant to help with any serious issue.
The bottom line
When it comes to finding the best trading partner, it is ultimately an issue of compatibility. Having considered all the obvious factors, you have to decide which broker meets your particular needs, and then you can begin trading.