How To Choose A Forex Broker

A reputable and client-friendly broker must provide excellent customer service. Because the forex market is open 24 hours a day, you should look for brokers who provide dedicated customer service around the clock. A trader might seek support at any time, and they might need to find a solution fast. That’s why forex brokers who offer telephone and text customer support are considered as great trading partners by successful traders.

Between 74% and 89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Are you looking to speculate that the Euro (EUR) currency will go up in value against the U.S. To do so, you would trade (or place a spread bet on) the EUR/USD currency pair, which is a forex investment. The forex market is the largest and most liquid market in the world, representing every global currency with trading conducted 24 hours a day, five days a week.

Milan is frequently quoted and mentioned in many financial publications, including Yahoo Finance, Business Insider, Barrons, CNN, Reuters, New York Post, and MarketWatch. Sometimes the only way to find out if a broker is the right one is to try them. However, doing a bit of research first certainly helps narrow the field. At Axi, we have created hundreds of supporting articles to answer the most common frequently asked questions at our Help Centre.

There’s a lot of technical jargon that’s used when describing forex brokers. Some of what you read or hear about are probably outdated, inaccurate, or even misleading. A flashy website does not guarantee that a broker is an NFA member or under CFTC regulation. A broker will typically provide its NFA member number in the “About Us” section of its website. In addition, each country outside of the U.S. has its own regulatory body. Due to potential concerns regarding the safety of deposits and the integrity of the broker, accounts should only be opened with brokers that are duly regulated.

How to Choose a Forex Broker

In certain jurisdictions, the maximum amount of leverage available is set by the local regulator and there will be no differences between brokers. In other jurisdictions with no leverage restrictions, the amount of leverage is flexible to suit the client. Whatever levels are available, it’s very important to remember that the more leverage that is used, the higher the risk.

By trading with a demo account you can trade with real conditions but virtual money, so it is absolutely risk free. This is the best way to get to know the ins and outs of trading and to put your trading strategy to the test. You can discover your strengths and weaknesses as a trader and embark on live trading only when you are confident and ready. Unlike traditional forex brokers, CFD brokers do not take the other side of a trader’s trades, making them suitable for traders who want to execute large volumes of trades in a short period of time. CFD brokers typically charge commission fees and may offer leverage on certain instruments. Choosing a Forex broker is a very personal process and making the decision often requires guidance from others who are more familiar with the available options.

A user-friendly and intuitive trading platform can significantly enhance your trading experience. It should provide real-time market quotes, advanced charting tools, and a wide range of technical indicators to assist you in making informed trading decisions. MetaTrader 4 and MetaTrader 5 are highly regarded trading platforms that are widely used by brokers and traders alike due to their comprehensive features and ease of use. There are different types of forex brokers available in the market, each offering different features and services. Depending on your individual needs as a trader or investor, you can choose from different types of forex brokers.

To trade on leverage, you will need to keep a level of margin in your account that satisfies broker and regulatory requirements. Make sure you are aware of the margin requirements and that you have enough capital to meet them. To access a liquid forex order book, you’ll trade through a forex broker.

How to Choose a Forex Broker

A strong broker should have a variety of trading products available to trade. Even if a trader is primarily focused on currencies, it’s good to know there are other options available. The currency market is decentralised, meaning there’s no single exchange that all transactions go through – unlike, for example, the New York Stock Exchange or London Stock Exchange. Instead, the forex market is built on an interbank system – a global network where financial institutions trade currencies directly between themselves. While there’s no one right way to start forex trading, there are common paths that many traders follow. Our team of industry experts conducted our reviews and developed this best-in-industry methodology for ranking online platforms for users at all levels.

It may be important for a trader to figure these specialties before starting trading on a real money account. Margin call policies should as well be taken into account when choosing a forex broker. There are brokerage firms operating on FIFO (“first in, first out”) basis, and some other companies act on LIFO (“last in, first out”) basis.

Unlike stockbrokers, whose clients’ funds are protected by the Securities Investor Protection Corporation (SIPC) if the brokerage shuts down, U.S. forex brokers provide no account protection. Total trade value determines the credit or debit in this calculation, not just the portion over the account balance. At the simplest level, the trader types of forex brokers will get paid nightly when holding a long position in the higher interest-bearing currency and will pay nightly when holding a long position in the lower interest-bearing currency. We encourage you to test a broker’s customer service efficiency very early in the trading process; you are also free to do so during the demo trading phase.

Bonuses and promotions are marketing tools used by the broker to “sweeten” its offer, and thus to attract more business. You might want to consider whether a really top-quality broker would feel the need to offer such incentives. Choosing a forex broker will be the first crucial decision you’ll make as a new trader. Initial minimum deposits, deposit and withdrawal methods, and funding fees all vary between brokers.

  • All content on is handwritten by a writer, fact-checked by a member of our research team, and edited and published by an editor.
  • Between 74% and 89% of retail investor accounts lose money when trading CFDs.
  • It should be noted that regulators may restrict certain tradable instruments (eg cryptocurrency CFDs are banned by the FCA) limiting what the broker can offer in different regions.
  • If there is a problem that doesn’t have an answer in the Help Center, please contact our support team over live chat (24/5).

It is recommended that the trader checks the efficiency of the broker’s support at an early stage, when trading on a demo account, for the purpose of minimizing money losses. It is optimal to know the level of competence of the broker’s stuff in advance. Fixed price spreads are easier to work with and better for consistency when buying and selling currency pairs. However, some brokers offer a variable spread or a fixed spread, then take the difference between the market spread and their own spread.

Scroll to Top