The foreign exchange market is unique in numerous ways including its rapid growth and 24 hour schedule. However, there is one characteristic that sets it apart from the other financial markets in the world. With over 5 trillion dollars traded each day, the forex market is by far the largest in the world.
Since the foreign exchange has a high trading volume, it makes it easier for anyone to access it, this has resulted in the growth of the forex market as well as forex brokers. Having a large selection to choose from might be a good thing but a large number of forex traders can make it more difficult for you to make a choice.
Choosing which broker for Forex trading to go for is a crucial decision and one that can strongly affect your trading future by determining your success and failures. If you want to choose the right broker, then here are a few things you should be looking for.
Forex Trading Demands a Credible and Professional Website
A good Forex trading broker should have a company website that tells you who they are. The way a website portrays the brokerage firm can give you a clear picture of just who you will be dealing with. This is obviously a very subjective matter but you are allowed to ask some basic questions. Does the website look professional? Does it crash? Is it navigable? These are some of the questions that you need to ask if you want to get more information about a company. It becomes even more crucial if you intend to invest in that particular company.
Regulation of the Firm and Forex Trading
Regulation is one of the key aspects to look for before choosing a broker for forex trading. If the broker company is situated in the US, it must be regulated by the National Futures Association or (NFA). It should also be registered by the FCM which stands for Futures Commission Merchant with the CFCT which stands for the Commodity Futures Trading Commission.
Forex Trading Thrives on Great Customer Support
Customer support is more vital in the foreign exchange market than it is in other industries. If a broker company doesn’t have proper customer care, it can cause a lot of frustrations which can eventually lead to the actual loss of money.
For instance, if the broker company of your choice doesn’t respond to either your emails or calls on time when you request to close or open a position in the market, this might lead to huge losses if a lot of time is taken.
Before you sign up with any broker, test out their customer support by sending emails, chatting or calling and gauge on how quick they are to responding to you. If the response is not satisfactory then think twice before subscribing to their services.
Stop-Loss Protection Provisions
Stop-loss protection for Forex trading is a feature that will enable you to ensure that the losses you incur do not exceed a specific amount. Even though a good number of brokers offer traders this feature, it is essential that you confirm that your broker is offering stop-loss protection before you sign up for their services.
Forex Trading Broker Offers Reasonable Leverage
Generally, it is leverage that gives the foreign exchange market an appeal to retail traders. Most times, the risks involved in high leverage are always just as high as the perks. Professional brokers will offer you leverage ratios that start at 100:1 often rising to 400:1.
The greater the leverage is, the higher the risk is for the broker. If you are being offered a leverage that is too high, then it might want to reconsider your option and go back to the drawing board.
In summary, there are numerous things you need to do if you want to succeed in Forex trading. One of the most important things you need to do is get a broker that is not only professional but also trustworthy.