Choosing the Right Forex Broker: 5 Qualities to Consider

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How to Choose Forex Broker - 5 Qualities to Consider

Can I trust a forex broker? New forex traders often find themselves in doubt about which broker is trustworthy. Choosing a reliable Forex broker eliminates risks and above all scams.

Identifying trusted Forex brokers is not complex. Hence, in this article, we will explain in detail the five qualities that we must absolutely expect from a good forex broker.

  1. Regulation
  2. Fund Protection
  3. Spreads
  4. User-Friendly Trading Platform
  5. Responsive Customer Service

5 essential qualities to consider when choosing a Forex broker

What qualities should a good forex broker possess? The best brokers have the following characteristics:

1# Regulation

The first quality to consider is regulation. A regulated or licensed broker has been authorized to offer trading services by a supervisory authority such as the Financial Conduct Authority (FCA) or the Cyprus Securities and Exchange Commission (CySEC). 

The license ensures that the broker operates according to certain rules, to protect traders. 

In other words, a licensed and regulated Forex broker cannot scam his clients because he is under strict regulation and strict supervision. 

A broker that is regulated has the obligation to display the following information on its website:

  • headquarters and physical address;
  • telephone contacts;
  • and the License number received.

Take your leave if you can’t find the above identification data.

2# Fund Protection

A reliable broker offers a system of protection for the money you have deposited. In the event that the broker is bankrupt and is unable to satisfy the refund money to its customers, thanks to the deposit protection system, you will have the right to compensation. 

For example, many brokers use the UK’s Financial Services Compensation Scheme (FSCS) as funds protection. The FSCS provides £85,000 to cover for each broker’s client. In this regard, if a broker offers greater protection of funds, it is obviously a trusted Forex broker.

3# Spreads

So, after selecting some brokers based on regulation, we now look at the spread. Spread is nothing more than the difference between the purchase price and the sale price of the asset, and corresponds to the profit of the Forex Broker.

Generally, there are three types of commission used by Forex brokers: 

  1. fixed spreads
  2. floating spreads
  3. commissions based on a percentage of the spread

The spread is usually calculated in pips. 

Which one should you choose? Should I always choose a broker with a low pip and a fixed rate? 

The best choice is, as always, a reliable broker and then make a calculation of the impact of all the various applicable commissions on your trading model to understand the one that best suits your needs and risk profile.

4# User-friendly trading platform 

Today it is possible to access a trading platform both from a PC (web or desktop) and remotely through a smartphone or tablet.

On the trading platform, the investor can trade all the assets present without having to go to a physical location.

If you are new to Forex trading, it is good to choose a broker that offers a user-friendly trading platform. 

5# Responsive customer service

Customer support is another important quality you should take into consideration when choosing a Forex broker. Especially if you are new in the Forex market, you will need someone who can be contacted quickly and effortlessly to answer your questions.

Today all the best brokers are equipped with impressive structures to take care of any problems that could affect their customers.

These types of brokers can be reached through the following channels:

  • Telephone; 
  • Email; 
  • Live chat.

In the absence of good customer service, our advice is to abandon the idea of trading with that broker.

In conclusion, selecting a trustworthy Forex broker is paramount for your trading journey. By assessing these five qualities, you can make an informed decision that aligns with your trading goals and ensures a secure and enjoyable forex trading experience.