There is already so much to learn when one starts trading forex and choosing a broker shouldn’t be another tough hurdle to scale. Although, it can be quite risky if you are not equipped with the right knowledge, as you will be giving all your trading capital to that broker, hoping to trade with it and withdraw your profits when it is time.
There are so many forex brokers to choose from, and unfortunately so many scammers out there too. This usually begs the question of the legitimacy and reliability of any broker soliciting clients. For example, if you are looking for a forex broker in Australia and you are told about XM, you’d probably ask questions like, is XM legit? Will my investment be safe with them? All understandable and reasonable questions. Knowing how to choose a reliable and legit forex broker is of utmost importance. Although this may seem a bit difficult at first, there are features to look out for in a forex broker to help you make an informed decision.
Follow these 5 important tips to help you choose a reliable and good forex broker:
Determine The Type Of Account to Open
First and foremost, you have to decide what kind of forex account you want to open before registering with a forex broker. The types of accounts are largely based on the amount you have to deposit. Some types of accounts are micro accounts, mini accounts, standard accounts, etc. Each of these accounts has a minimum deposit, along with other requirements. The leverage is also different for each account type. Before registering with a forex broker, outline your needs and/or requirements, see if it matches any of the account types the broker is offering.
Before registering an account with a forex broker, you should consider the quality of the companies’ customer service, how quickly they respond to inquiries, and how polite their customer reps are. Forex is traded all through the 24 hours of a day so your broker should be able to offer you constant or uninterrupted customer service.
License from a regulatory body:
This is important to avoid getting scammed. You have to be sure that your forex broker is accredited and has a license from a regulatory body. Note that the legislation surrounding finance-related registrations vary from country to country, hence, it is wise to check where the company is based.
Mode of payment (deposits and withdrawals)
Other things to look out for include all the available funding methods the broker offers, the fees applied for each method, and whether or not the broker has minimum deposit and withdrawal requirements.
You need to be aware of the margin call requirements of any broker before making orders. This is because the forex broker has the right to issue a margin call when the margin in your trading account becomes insufficient. The rules applied in situations like this may differ between brokers. Some may prefer to close the investor’s deals, others may simply ask the investor to increase the margin.
Before registering an account with any forex broker, assess your own needs first. Then choose a broker that aligns with your needs. There are so many forex brokers to choose from and the tips above will guide you in choosing the most reliable one.