Choosing a broker and criteria upon which this broker should be chosen are not less important than identifying a trading strategy and financial instruments on the foreign exchange market. We should point out two main factors and three less significant ones while choosing a broker on Forex.
Reputation of a company
The quality of services and rating of a broker are of key significance. The way trade requests are realized, the level of slippage, technical malfunctions and time for withdrawal and deposit affect on the way of trader’s trade activity and have a direct influence on his earnings.
The way of slippage may decrease the profit of a player by more than one percent, and realization of trade requests is important because execution of orders with a deviation of even one point may turn into serious losses after some time. In fact, it is difficult to notice, if we talk about one deal, but if you have a thousand loss-making deals, you can lose a thousand points.
Other factors, which are the importance of contemporary withdrawal of funds and the absence of malfunctions in the network connection, do not need any comments. In combination, they all identify a reputation of a broker company, that is why, first of all, one should review comments of traders concerning the presence or absence of these problems in the work of the preferred brokers.
It is important to remember, that players lose a lot of their money because of brokerage commissions. We are talking about a spread, a swap and extra costs. Though such condition may seem insignificant, the fact, that conditions in various companies may differ by several times, doesn’t have to be ignored. Brokerage commissions are the main earnings of brokers, and these they may become a great loss for a trader.
For example, at best, the commission is about 30% from the deposit for a hundred of made deals. But that figure may be much bigger. So, when trying to identify, how to choose a broker on Forex, it is better to pay attention to those, who offer medium commissions: not too small, because it questions company integrity, and not to high, because it unfavorably affects a trader’s account.
Some more important things
In addition, one should pay attention to a broker’s:
- Client support.
It may serve as a consultancy for a trader, or it may provide him with solutions to important questions. Either way, the responsiveness of customer supporters and the efficiency in solving problems may tell a lot about the reliability of a brokerage firm. Of course, if it involves emerge of rare malfunctions or incorrectness.
- Programs for trading.
Mobile versions of a trade terminal, user-friendly interface and other features of software are significant, of course. A large selection and an opportunity to trade comfortably using any devices and being non-location-dependent always are the advantages of a broker company, and they help to choose a broker for trade correctly.
- Verification of users.
If a broker points out, that to start trading, they need a copy of a client’s passport, it means, that risk of fraudulent actions made by unverified users is minimized. This is also true with financial transactions with players’ funds. If it implies a transmission to a bank account or with an additional security with a password on a phone, the level of trust towards such companies significantly increases.
Thus, there are factors, which have a huge influence on the process of solving the dilemma concerning how to choose a broker on the foreign exchange market. Besides, you should look at several independent brokerage ratings, which greatly increase your chances to find a safe broker.
Today there are many different representatives of this segment, so, to find trustworthy and safe brokers among unreliable ones is a serious task for every player.