Where to Open an Account for Forex Trading?
When looking for a broker where you can open an account to trade on the Forex market, you may come across a large number of offers. Many of them are active online, placing ads on the internet, sending messages by email, and some even call the mobile numbers of potential investors. However, advertising alone cannot be used to determine whether a broker is suitable for specific trading conditions, since the information distributed by the company itself is aimed at attracting clients rather than familiarizing them with the specifics of the services provided. Therefore, let us take a closer look at the specifics of choosing a broker with whom an account for trading on the Forex market will be opened.
Criteria for Choosing a Broker
Let us highlight several main criteria for choosing a broker:
- Reliability. Even with profitable trading, there is a chance of losing funds if the broker does not guarantee their safety. Over the last ten years, there have been several cases when a broker froze its clients' accounts without any reason and after some time declared itself bankrupt or simply ceased its operations. The specifics of registering companies that provide Forex market trading services determine that it is impossible to find the guilty party and get your funds back. Why analyze price charts and study the currency market if incompetent actions by broker employees, or outright fraudulent actions, will lead to the loss of all funds regardless of trading results? Reliability is often assessed by the following criteria: reputation, liability and risk insurance, operating history, the presence of a license and the place where it was issued, the attitude of popular payment systems, and the possibility of legal conflict resolution. Reputation is determined by various reviews left by the broker's clients. The longer a company has been operating, the more trust it receives, but there are cases when brokers with more than 5 years of experience also closed without paying funds to their clients. And, of course, you need to read the agreement concluded with the client when opening an account. Often this agreement is presented as a license agreement under which you need to tick a box. However, there are cases when the broker requires the trader's personal presence at the office to sign the agreement.
- Minimum deposit is another indicator that receives attention. Some brokers set the bar at $10, others at $100 and above. This indicator cannot be called important, since for professional trading and earning substantial income you need to manage more than $5,000 (10% monthly profit would be $500, and that only with successful trading). The larger the account, the larger the drawdown the deposit can withstand.
- Spread is a very important indicator. The broker receives its profit from providing services by widening the buy-sell corridor. An excessively wide spread indicates that the broker increases its profit at the expense of clients, since it will earn from every trade regardless of whether the trade brought profit or loss. Therefore, when choosing where to open an account, you need to pay attention to the spread size.
- Methods of depositing and withdrawing funds. Having funds in the account is good, but you also need to withdraw them, since everything in deposits is available only for trading. Unfortunately, brokers are in no hurry to conclude agreements with banks or electronic systems in order to link cards directly to accounts within the system. If some reputable financial institutions service the broker or have issued it a certificate, that says a lot. For example, the WebMoney service treats its clients carefully and thoroughly checks the companies to which it issues a certificate. If there are many complaints about a service provider failing to fulfill obligations to transfer funds to an electronic account, the license may be revoked.
- Leverage can vary over a fairly wide range: from 1:10 to 1:500. In general, it can be said that this indicator does not determine the specifics of the broker's work, it only points to the possibility of aggressive trading, when with a small lot and a movement of only a few points a large amount is debited or credited.
- Trading platform. This can also be called an important selection criterion. Some, for example MT4, have a large set of tools for market analysis, while others do not. Preference should be given to brokers that work with popular trading platforms.
- The quality of the support service can also be called an important selection criterion. A situation may arise when you need to consult company representatives to avoid problems. The quality of support can be determined by how quickly it responds, in what language, and whether the company's employees are inclined to solve their clients' problems.
As for choosing a broker in accordance with the selected trading strategy, in this case attention is also paid to swaps, which can be positive or negative when a trade is rolled over to the next day or week, or can be absent altogether.
Who Should You Be Wary Of?
If you trust companies whose employees call from numbers not listed on the official website, there is a chance that the funds will be transferred to a scammer. An example would be brokers that only pretend to provide services on the Forex market. As soon as a client starts withdrawing their money, problems arise: they need to go through verification with absurd requirements, access to the account is closed, and so on. At the same time, the chance of getting the funds back is no more than 1%.
Why Should You Go with Large Companies?
It is recommended to pay attention to offers from large companies for the following reasons:
- They have a long history of providing services;
- They provide high-quality software;
- They insure risks;
- They care about the opinion that has formed about the quality of their services;
- They can hire qualified employees.
Large companies profit from providing services well, which attracts a large number of traders. The greater the trading volume, the more profit the company receives from the spread. Therefore, it makes no sense for them to interfere with their clients' trading, and a large turnover reduces the risk of bankruptcy.
Recommended Brokers
Large brokers that have earned trust include:
- Alpari - the company has been operating since 1998 and at the moment is the most reliable and optimal choice for traders;
- InstaForex - one of the largest companies in the trading world, popular among beginners;
- Forex4you - a large broker that provides the best trading conditions for grid traders and martingale advisors;
- RoboForex - excellent cent accounts with good execution for starting with a small amount;
- Exness - the company offers the highest leverage of 1:2000.
Each company has its own specifics, so you need to carefully study the information indicated on the website, as well as review the license agreement and the contract concluded when creating an account and opening a deposit. All rights and obligations of both parties are stated directly in the contract being concluded, as are the ways of resolving conflict situations.
Broker Selection Service
In some cases, it makes sense to select a broker for a specific trading strategy. An example would be the use of a scalping advisor that closes trades when the price changes by only a few points. This determines a large number of trades per day.
There are no problems with installing an advisor in MT4 and it can be used with all brokers that work with this trading platform. However, the strategy itself will be profitable only with a small spread and no commissions for opening trades.
You can find the most suitable broker through our broker selection service. The following points can be attributed to the features of the selection service:
- When opening the site page, at the very top you can see questions with answer options to choose from;
- When answers are selected, the entire database of forex brokers is filtered.
The result of the survey is a list of brokers indicating the criteria by which they were selected. The broker selection service is located here.
Conclusion
In conclusion, let us note that to choose the right broker you should possess certain knowledge, for example what a spread or swaps are, what the specifics of MT4 are, and why most people choose this platform. That is why beginners are advised to pay attention only to large firms, and only after deciding on broker requirements based on trading experience can a more suitable service provider be selected.
Respectfully, Alexey Vergunov
TradeLikeaPro.ru
When looking for a broker where you can open an account to trade on the Forex market, you may come across a large number of offers.