3 Important Things You Should be Looking for when Choosing a Forex Broker
Choosing the right forex broker is almost as essential as getting a solid education if you want to be successful trading currencies. Depending on the broker you choose, you could be severely limited with your trades, have issues with withdrawals and deposits, or even get swindled for your money in the worst cases.
This is why it's important that you take your time and find a broker that is not only reputable but also makes the trading process as easy as possible for you. Here are a few things you should be looking for when picking a forex broker.
Make Sure they're Regulated
This is the first thing you should do before you sign up for an account with any broker. In the US, the broker has to be a member of the NFA and registered with the CFTC as a retail forex dealer and a futures commission merchant. If you're working with a foreign merchant, you should look for registration with the regulating body in their jurisdiction. Cmtrading.com for instance, which is located in South Africa, is registered with the Financial Services Board and the FCSA, which are both very strict regulating bodies in the country. This ensures that your funds will remain safe at all times and that you'll have recourse in case there's any wrongdoing.
Types of Currency Pairs Offered
This is also something very important that you'll have to consider. Not everybody wants to trade common pairs like the EUR/USD or USD/JPY. There's a lot of money to be made from exotic pairs, and you may have specific knowledge on certain lesser-known economies that could give you an edge. So, look for brokers that offer a wide selection of pairs, including pairs you are actually interested in.
Also, if you're going to be doing some forex trading with exotic pairs, it could also help to pick a broker that is located in or around the region. For instance, a broker that is located in Africa might have access to more African currency pairs and allow you to take advantage of these emerging markets if you have inside information.
Customer Service
The forex market never sleeps, and you have to make sure that you'll be able to get access to customer service at any time of the day. You also have to check how easy or hard it is to get a hold of an actual customer service representative. If you want to get a sense of how good their customer service is, you can always make a quick call. You'll be able to check how long you have to wait to get service and see if their representatives can give you quick and concise information about things like leverage, spreads, company details, and regulation, among other things.
Finding the right broker will not only make your trading experience easier, but it will also ensure that your funds remain safe and that you get the assistance and resources that you need. Always remember to get a second opinion before you pick a broker and make sure that you pick one that is legitimate with a solid reputation for good service.