What to consider when choosing a forex broker?

Before even considering a forex broker, you should go over the most crucial element: their reputation and legitimacy.

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For anyone in the trading business or trying to get familiar with it, a forex broker is a term that you have had to encounter by now. A forex broker might also be known as a retail forex broker or a currency trading broker. Some of the more notable names would be Eightcap, IC Markets, Axi, and Purple Trading, with many more to follow.

So what is essential to consider when choosing a forex broker for yourself. Before even considering one, you should go over the most crucial element: their reputation and legitimacy. You can check and consult with several financial websites that show you which factors you need to pay attention to most. Two websites that you can go through with the rest of the forex trading community that are reputable would be Forex Peace Army and Forex Factory. You can find various threads about brokers and acquire an explanation of which would be the most compatible for yourself respectively. After getting the general knowledge of the forex broker and their legitimacy, there are still many factors to check and compare to choose the broker.

1. Commissions & Spreads

Brokers allow forex traders to participate in the markets. In exchange, they tend to earn through commissions while charging a particular percentage of the entire spread. Some of them don’t charge any commission to forex traders, but rather make money through larger spreads.

2. Account features

Stepping into the world of forex, you will learn that every forex broker has different diverse offerings. Some of the essential areas that must be considered are leverage, margin, spread, commissions, and initial deposit requirements with an additional effort required to deposit & withdraw. Another option is if you lack capital and are interested in depositing cents. In that case, you should focus on finding a forex broker that has an excellent reputation and conditions on forex cent accounts.

3. Deposit & Withdrawal policies

Each forex broker has its deposit & withdrawal policies. Typically the deposit methods include Credit card, PayPal, Skrill, or other payment methods, while withdrawals are generally made through bank wire transfer or a refund to your initial deposit method. Another thing to consider when withdrawing would be the additional fee, depending on the withdrawal method you request the payment through.

An example of deposit methods for Eightcap, TMGM, and Axi can be seen in the two images below:

Deposit methods
Withdrawal methods

4. Regulatory compliances & Licenses

As mentioned at the start of the thread, looking at the reputation of a forex broker is essential before investing. Another thing to consider is the broker rules that can have different rulings depending on which part of the world you are trading from. Always check the regulatory compliances and licenses that the broker has before investing in the company.

5. Trading platforms

A trading platform is another crucial factor when we are talking about forex trading since it is every investor’s insight into the forex market. Every trader should ensure to have the best possible software and trading platform while analyzing the markets. Some of the more popular trading platforms would be MetaTrader4, MetaTrader 5, cPanel, and TradingView.

To end the article off, I would advise everyone to check our Best forex broker article next.

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