The decision to choose a forex broker is the biggest decision when you trade forex. You give all of your trading capital in the hand of that great forex broker, expecting them to make a huge profit when you withdraw your capital.
Having great forex strategies will mean nothing if your broker runs off with your money. These are three tips that may help you choose great forex brokers.
Consider Your Needs
The first thing you need to do is assessing your needs. In that assessment you have to ask yourself these questions, will you trade a lot or a little?; Will you trade small moves or get bigger moves?.
Besides, you need to also consider the amount of capital you own. If you have a small capital, then you have to choose micro-lots.
The last part is to decide your deposit and withdrawal funds. Different brokers offer various different methods. Thus, you need to decide your preference first, then, choose a broker that aligns with your needs.
The Offerings from Brokers
After you know your needs, now you need to narrow the list of potential brokers according to your needs.
In choosing the brokers, you have to make sure that the broker is regulated in a country accompanied by a well-established financial system. Try to find brokers that are regulated by U.S., U.K., Canadian, New Zealand, Japanese, or Australian authorities.
Besides, find a broker which will always be available every time you need them. To do that, open a demo account with a broker you chose and send them emails to your questions.
Now, monitor their speed on responding to your question. If the customer service is not good, then, eliminate that broker from your list of potential brokers.
Personally Test Out the Broker
With a smaller list of potential brokers you have now, you have to personally test them, one by one. Here are ways to test them.
Open a Demo account and notes their trading conditions. Specifically, look at the way they execute your trade. You also have to check their spreads, which should be tight and stable.
After the demo accounts work in weeks, you have to open a live account and make a deposit. Don’t put all of your capital on the deposit. For instance, if you have $10,000, then deposit $1,000.
Trade the live account with that partial deposit for at least two weeks. Continue to test customer support during that time.
After that, try to initiate a withdrawal for some funds on your account. This is to check if you can make the withdrawal easily.
If there are no problems with those steps, then you can choose this broker. Now, you can deposit the rest of your capital and begin the trade.
Always avoid bonuses when you open a live account. You have to remember that nothing comes for free. Accepting the bonuses may result in interfere with withdrawals.