If you are in the business of trading currencies, or you are looking to dive into this liquid market, you will first want to ensure that you choose a good broker. Things to look out for in a foreign exchange broker include the safety of the service, Trustpilot reviews, account features, and the ability to try a demo trading account without a deposit before committing. Read on to delve deeper into these considerations.
What Is The Forex Market?
The forex (foreign exchange) market determines foreign exchange rates for every currency. The foreign exchange market is decentralized, meaning it takes place digitally anywhere and everywhere. Other markets tend to have a centralized base. It includes all aspects of buying, selling, and exchanging currencies at current or determined prices.
If you speculate that, for instance, the Euro (EUR) currency will go up in value against the US Dollar (USD) you could trade the EUR/USD currency pair. This is known as placing a spread bet, meaning the payoff of the wager is based on the accuracy of your bet. Currencies are always traded in pairs because as you buy or sell one, you automatically buy or sell another.
The foreign exchange market is the largest and most liquid market globally, representing every world currency with trading conducted twenty-four hours a day, five days a week. A vital aspect to successful forex trading is to have a good and trusted broker. There are several considerations to make when choosing your forex broker. Get here a guide to online forex trading.
Safety
One of the most important considerations you will need to make when choosing your foreign exchange broker is the safety of the service they provide.
Some brokers offer a risk-management tool, such as AvaTrade’s AvaProtect, that allows you to protect a specific trade against losses of up to one million dollars over a chosen time frame. Learn more with this AvaTrade review that details the safety features of the broker. You can access the AvaProtect tool by paying a modest hedging cost at the time of purchase.
You should also look for brokers that are registered with different countries’ authorities. For instance, AvaTrade is registered with the Japanese Financial Services Authority (JFSA) and the Central Bank of Ireland, among others.
Trustpilot Reviews
An absolute must is that your broker is trustworthy. Checking out a broker’s Trustpilot reviews is a great way to get an overview of how customers have experienced their services, and whether their general reputation is strong. Look for a high number of positive reviews and an overall high rating out of five stars. Where you find a broker with mixed or negative reviews, it is recommended that you do not pursue their services, as they may not be trustworthy or provide safe trading options. Remember, this is the service you are choosing to deal with potentially large sums of your money. You do not want to choose a broker without doing your research first.
Account Features
There are many attractive features that a broker can offer to customers. One such feature is social trading, which is a form of trading that enables traders or investors to copy and execute the strategies of their peers or more experienced traders. Your broker may also offer different trading platforms depending on what type of trader or investor you are
Other account features to bear in mind include whether the broker has a mobile application that is functional, practical, and easy to use. Can you set up notifications or price alerts so you never miss an opportunity? Is the broker’s website user-friendly and straightforward to navigate?
Risk-Free Demo
A great service a broker can provide is allowing you to try a risk-free demo trading account with no need for a deposit. This way you can check out the website, the trading platforms, and the social trading element of the broker’s services before committing to using their broker service. You wouldn’t buy a car without taking it for a spin first, would you?
Get Started
This has been a very brief guide to forex trading and how to choose the ideal broker service for you. The most important things to keep in mind before you start trading foreign currencies include the safety of the broker service, the broker’s reputation, and trustworthiness, the account features available to users, such as social trading, and the option to try a risk-free demo trading account, deposit free, before you sign up.
Once you have taken these considerations into account, you will be all set to choose your online broker and start trading currencies. Good luck!
