How to Choose a Forex Broker | A Comprehensive Guide

How to Choose a Forex Broker | A Comprehensive Guide

To choose a Forex broker is as important as the vision to make a profit in Forex. If you get it wrong with the broker, it is expected that you may not succeed in this field. As you read on, we will be showing you what to look out for to get a good broker.

Choose a Forex Broker

How to Choose a Forex Broker

The financial success of investment activities is largely dependent on the broker. A broker company carries out operations on its behalf or on behalf of a client at its expense.

We will consider the main characteristics that you should pay attention to make the most appropriate choice of a brokerage company.

The Main Criteria for Choosing a Broker

You should consider the following:

1. Amount to be operated on. For small turns (less than 200,000 US dollars), an Internet broker is suitable. For impressive turnovers, a full-cycle broker is better.

2. Commission remuneration. On average, the commission that should be paid for brokerage services is 0.01-0.3% of the transaction amount. It depends on the specific intermediary.

3. Broker access to various trading floors. Choose a broker who is a member of the section where you plan to trade, then the commission and processing time of orders will be minimal.

Commissions

There are many different ways of calculating brokers’ commissions. It is recommended that the future participant on the exchange thoroughly study them all.

This will help determine the most profitable tariff plan. For this, you should learn the following:

1. Spread is the difference between buying and selling an asset. The spread depends on liquidity: the more the asset is in demand, the lower the spread.

2. The fee for the lot is % of each transaction.

3. Swap is the commission for the right to transfer the transaction to the next day.

Additional Things to Consider

When choosing a broker, it is also important to consider the following:

1. Company reputation and period of its activity;

2. Exchange activity indicators;

3. Number of registered users;

4. The variety of services provided and the availability of several tariff plans;

5. Whether there is its own depository or the company uses the services of another company;

6. Quality and availability of analytical information

7. Level of technical support.

Nuances of The Contract

When concluding the contract, the person signing the document and representing the broker side should be fixed in the contract.

You can verify your identity with your passport. The second important nuance is the right to use client securities by the broker.

As a rule, the contract of brokerage services in modern practice takes the form of a particular contract of accession to the regulation on the provision of services in the financial market.

The main mistake of many beginner players is that they do not study the rules thoroughly.

Before agreeing, read all of it and pay special attention to the clauses on the broker’s liability, obligations, and rights, as well as on its reporting and conditions for making claims. By acting in this way, you can avoid many pitfalls.

You can check out some other articles that may be of interest to you on this platform.

CSN Team


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