Mercedes Pantelis, Customer Support Manger, easyMarkets
For forex traders, finding a good broker is essential. When you’re putting significant money on the line, you want to know that you have a good partner who is as committed as you are to making trading profits. The problem is that there are lots of good forex brokers out there, but there are also a lot that you need to avoid.
One of the most important things is to look at with any forex broker is what other traders think about them. If you have any doubts, then it’s important that you spend time on forex message boards to get feedback from other people who have already had experience of the broker. Don’t just spend time looking for brokers who are a flash in the pan – look for established brokers who have managed to build a long-term reputation with their clients and been in the business for a number of years.
Look for regulated brokers
Another key thing to look for is whether or not the broker is regulated by a national financial authority. If a broker has been accredited by a country’s financial regulatory body, then this may significantly reduce the risk of trading with them.
Watch out for fraud
This is the flip side of a broker having a good reputation if there’s even a hint that the broker has failed to honor withdrawals, or if traders have raised questions about the results of their trades, then it’s time to walk away. This probably isn’t fair – disgruntled traders frequently make unsupported allegations against their brokers when they are on a losing streak – so do your research and don’t look at just one message board.
Once you have decided that a broker is reputable you need to think about whether they offer you the best chances for trading success. Think about things such as the margins that they offer you, and – even more importantly – the spreads that you’re likely to get on the trades that you make. Also be aware that while some may promote low or even zero spreads they may have other hidden charges. Remember that forex is a game where the difference between losing and winning is relatively small, so you want a broker who helps you to maximise your gains and limit your losses.
If you’re a highly experienced forex trader, then you may not need a lot of education. However, if you’re just starting out, then you need all the help that you can get. As a minimum, try to find a broker that offers good online training material. Ideally, look for a broker that goes beyond this, offering consultations with their trading experts. Even if you have to pay for this, it’s well worth the while – and this is also proof that you are signing up with a broker who knows what they’re doing.
Risk warning: Forward Rate Agreements, Options and CFDs (OTC Trading) are leveraged products that carry a substantial risk of loss up to your invested capital and may not be suitable for everyone. Please ensure that you understand fully the risks involved and do not invest money you cannot afford to lose. Our group of companies through its subsidiaries is licensed by the Cyprus Securities & Exchange Commission (Easy Forex Trading Ltd- CySEC, License Number 079/07), which has been passported in the European Union through the MiFID Directive and in Australia by ASIC (Easy Markets Pty Ltd -AFS license No. 246566).