How To Shop for a Forex Broker

One of the primary factors that determine Forex trading success is the Forex broker you do business with. There are many elements to evaluate when determining which Forex broker to employ. Some of these elements you may not discover until you have traded a live account with them. In this article, I will discuss some of the main factors to research before choosing a Forex broker.

History and Background

Some of the items to investigate when looking for a retail Forex broker are: account types offered, trading software, deposits and withdrawals, customer support, and safety of funds. These elements will be discussed in more detail below.

There are a number of other items to investigate, but these will become clearer as you shop around.

A note of caution, this industry is full of fraud, shady characters, and scams. Although it is getting better because of increased regulation, it is still a “buyer-beware” industry.

Account Types

Unless you have a minimum of $30,000 to trade your Forex account with, you need to find a Forex broker that offers mini and micro accounts. This is necessary even if you have a large account so as to experiment and become familiarized with the broker’s individual trading platform before gearing up to full steam.

Trading Software

Most Forex brokers have many types of trading platforms that customers can use to trade their Forex accounts with. However, I would personally avoid a firm that does not offer MetaTrader (MT4). MT4 is the industry’s most popular Forex trading platform because of its state-of-the-art charting and trading indicator tools.

MT4 is also supports expert advisor’s (EA’s) which most experienced Forex traders use in one form or another from time to time. As an example, Forex Signals Guide uses a “signals-copy” EA to deliver its automated Forex signals to end-user subscribers.

Brokers should also provide mobile access and functionality to trade your account. In recent years, with the advancement of technology, mobile trading has becoming increasingly popular.

Deposits and Withdrawals

Forex brokers should be extremely flexible with account deposits and withdrawals. Forex brokers should offer credit card transfers via Visa, MasterCard, along with wire transfers for both deposits and withdrawals. Most "best-rated firms" also allow for various local transfer options.

Customer Support

Customer support should be at the top of the list. The prospective firm should have excellent support and service employees with the ability to respond to calls 24 hours a day during the week. Firms should also have many local phone numbers and various email addresses to different departments. Live-chat capabilities should also be available 24 hours a day.

Safety of Funds

Retail Forex brokers should, on their own, exceed industry standards respective of client’s funds. In addition, technical safeguards such as rigorous firewalls and SSL technology should be used to ensure the safety of information transmission.

The Forex broker you decide to trade with must be a registered and regulated firm. If they are a U.S. based firm then the brokerage should be a member of the CFTC and the NFA. In the U.K. they should be registered with the FSA.

Conclusion

In conclusion, the Forex broker you choose should be beginner friendly and have the ability to make low initial deposits. Even if you plan on trading full size lots down the road, start with a mini account until you get a good “feel” for that particular broker’s trading procedures and guidelines so that there are not any surprises when trading full bore.

Whatever Forex brokerage you decide to use, they should be able to service all types of traders, whether beginner or veteran, have excellent customer service, be well regulated, and have a general overall image of competence.