The best way to choose the best Forex broker – Get The Tips

Have you ever wondered which one is the best way to choose the best Forex broker nowadays? Are there any universal tips from experienced Forex traders that can help find the ideal and reliable brokerage house that will be the right solution? And ultimately, why are some Forex brokers better and better than others, and why is it important to know how to diversify them?

First, in the last few years, trading on the currently most volatile and largest financial market, which we all know as the Forex market, has become the main occupation for many. Many have quit their 9-5 jobs to devote themselves to forex profit strategies.

They became massively interested in Forex because they heard many stories about successful traders who, with a little will and effort, started to get rich from this type of business. They also heard how important it is to learn the best way to choose the best Forex broker.

According to Forex experts, the first and most important thing that affects a trader’s fate is choosing the best broker. But before we give you the answer to what are the tips for choosing a broker, let’s see what it means!

What is the Forex broker exactly?

A Forex broker represents a specific financial services company that buys and sells different cryptocurrencies on their client’s behalf. It provides trades full access to the platform and the Forex market 24 hours a working day and the ability to speculate on diverse currency pairs globally. They’re also known as retail forex brokers or currency trading brokers.

Forex brokers tend to minimize their costs to stay competitive in the dynamic market. However, their traders have to pay some fees while trading with them. That also includes a spread, which is the difference between the bid and offer.

Transactions are done in pairs in the Forex market.

In the dynamic Forex market, all transactions are done in currency pairs such as EUR/USD, USD/GBP, USD/CAD, and numerous other combinations or pairs. Remember that all transactions are, without exception, between a pair of two different currencies.

Transactions are always taking place in the Forex market, which operates 5.5 days a week, non-stop. It has a daily turnover of approximately $6.6 trillion and is currently the world’s largest financial market.

However, to get started with currency trading on that market, the first essential step is to find a reliable Forex broker. So, for all those who are wondering what the best way to choose the best Forex broker is, here is what they need to know!

The difference between regulated and unregulated Forex brokers

Before getting started with the best way to choose the best Forex broker, it’s crucial to understand the difference between a regulated broker and an unregulated broker. Let’s get to know the difference between these two types of Forex brokers!

Regulated broker

A regulated broker represents the financial service company or an individual whose activities are strictly controlled and monitored by a local regulatory authority. The main reason for this activity is the prevention of any excessive risk-taking or fraudulent activities by that broker.

Unregulated broker

On the other hand, an unregulated broker, as the name suggests, refers to a situation where there’s no regulatory organization nor a special group of people monitoring them. These brokers aren’t safe, and they can take all your money and disappear. Numerous unregulated brokers are usually scams, but not necessarily.

How to select a Forex broker properly in 2022?

Now that you’ve understood the main differences between these two types of Forex brokers, it will be easier to understand the best way to choose the best Forex broker. It’s time to learn how to select a Forex broker properly in 2022. So, the first inevitable step is to eliminate unregulated brokers.

1.   Narrow down your choice to regulated Forex brokers only

It’s essential to eliminate all unregulated brokers in the first place since there’s a high risk that they’re scams or frauds. Regulated brokers, as you’ve read, are controlled by a local regulatory authority, so there’s no way they could be scams.

Regulated brokers protect individual investors and also ensure fair operations to the interests of safeguard clients. When selecting your Forex broker, remember that the number one priority is to check the regulatory approval status of the broker, along with its governing authority.

To check whether your broker is regulated, it’s best to visit FINRA BrokerCheck or go to the official SEC’s Investment Adviser Public Disclosure site (IAPD).

2.   Check all the main account features.

Once you’ve narrowed your choice to regulated Forex brokers only, the next step is to check their account features to eliminate brokers who need the features crucial for you and your trading strategy.

Keep in mind that every Forex broker includes different features and account offerings. There are five main areas that you should consider while choosing your preferred broker:

1.    Leverage and margin

Brokers are using 50:1 leverage or those who offer as much as 200:1 leverage. Remember that leverage works in your favor with winning positions. The reason for that is that there’s a high potential for profits. Nonetheless, leverage can also destroy the account because there’s a risk of potential losses. That’s why it is crucial to use leverage carefully.

2.    Commissions and spread

Forex brokers might charge some percentage of the spread, the difference between the bid and ask of a certain Forex currency pair. A great number of brokers charge no commissions, however. Instead, they earn money with a wider spread. That’s why it’s crucial to know well in which way your broker makes its money and how he uses it.

3.    Initial deposit requirements

There are Forex accounts that are able to be funded with small amounts of deposits. It can go as low as $50 in some cases. The buying power with leverage is much greater than the minimum deposit, making it attractive to new investors and traders.

The majority of Forex brokers offer mini, standard, and micro accounts that all vary regarding the initial deposit requirements.

4.    Ease of deposit and withdrawals

Another feature that traders should consider is the ease of deposits and withdrawals. Remember that every individual broker includes specific account funding and withdrawal policies. Some brokers can allow account holders to fund their accounts via:

• Credit card online
• Wire transfer
• PayPal
• Bank check
• ACH payment
• Business personal check.

Typically, withdrawals are made by wire transfer or by check. The Forex broker could charge a specific fee for any of these services.

5.    Demo account availability

If you’re a total beginner in Forex, demo account availability should be one of the top priorities when finding your ideal broker. Demo accounts are great because they allow you to practice trading and gain crucial experience without any risks of losing money since you won’t be using it in this case.

What else should you consider when choosing a broker?

Besides these core five features that anyone who’s searching for an ideal broker should know, some other features could be taken into account:

• Customer support is available 24 hours a day in case the broker’s clients face issues during their trading sessions. A professional support team is always a huge plus with a broker.
• Numerous currency pairs are available for trading. If you’re an exhibitionist who wants to trade some exotic currency pairs that not many Forex traders trade, you should check what pairs are available for trading in the first place.
• Checking its reviews and comments across relevant brokerage forums is a fantastic way to learn more about your preferred Forex brokers. There’s nothing more relevant than getting first-hand information from previous and current Forex traders who have gained relevant experience. One comment or review can change your opinion about certain brokers and help you make the right decision. It’s the best way to choose the best Forex broker, according to some traders.
• Trading platforms are crucial to be checked. It’s the investor’s portal to the Forex markets. Thus, traders need to ensure that the software and broker’s platform have fundamental and technical analysis tools. They are essential for trades to be entered and exited with ease.
• Different account types that traders can choose from are always a plus for a broker. Every trader is different from the other, so a broker offering an array of account types is great. They can cater to different financial needs, aspirations, and abilities of traders.

The Bottom Line

Looking for the best way to choose the best Forex broker can be challenging. It is very challenging and requires a lot of deep research. First, it is crucial that the broker is regulated by a financial regulatory body and then that it offers all the essential features that matter to the trader.

All comments on relevant sites must be positive, as well as reviews and ratings. Most importantly, every ambitious trader does good research because that’s the best way to choose the best Forex broker. The ability to check all the relevant stuff before deciding which broker is the right one is a must! Good luck with your brokerage quest!