Factors to Consider When Choosing A Forex Broker

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Choosing A Forex Broker

Forex is the biggest market in the world, with more than $6 trillion dollars moving across the market in a single day. This is also a market where investors can change their lifestyles. However, that can be for better or for worse. Your success or failure will depend a lot on how much homework and research you do prior to trading. If you implement trading strategies that have proven to be successful in the past, then you should be just fine.

Reputation

When you’re ready to start trading on forex, there is one key step you need to take. It’s imperative that you find a trustworthy broker with a good reputation. The forex broker market has some bad seeds in it, but don’t let that dissuade you from trading. There are more trustworthy than untrustworthy brokers. In order to find the trustworthy brokers, look at the reviews. For instance, AvaTrade reviews prove to be a global brand that is best known for its customer service, numerous platforms, copy trading, mobile trading, research tools, and investor education. Other forex brokers might shine in other areas.

When looking for the right online forex broker, be sure to pay attention to how many platforms are offered, how many instruments there are, how many currency pairs are available, as well as their trading hours. If the trading hours are 24/7 and Friday and Sunday night are available for trading, that’s a good sign. Customer service also plays a big role. For example, make sure this broker has a reputation for answering all questions with friendliness and alacrity in regards to trading platforms, deposits, withdrawals, and document verification.

There is one more important point about forex broker reputation that needs to be made. Once you delve into this world of forex reviews, you’re going to find a decent number of complainers. Some of these people have a right to complain due to working with the wrong company, but most of them are upset about mistakes they made on their own and lack accountability. Unfortunately, a lot of people need to blame someone or something else for their mistakes.

Reliability

Reputation and reliability are two different things. In regards to the latter, you need to know that your trades are going to be executed correctly. The most important question is does the platform remain stable during major news announcement that have the potential to lead to freezes? If you see a freeze a couple of times per year, that’s normal. There isn’t much you can do about it. Even if the best servers are being used, this amount of traffic can lead to a freeze. As long as it’s rare and everything is up and running again quickly, you’re good to go. On the other hand, if you see consistent freezes, find another broker. This means they haven’t invested enough money in the right servers to make sure their clients are protected.

You also want to make sure requotes are rare. A requote can lead to an increase in the bid rate or a decrease in the ask rate, neither of which you want as a trader. If there is a powerful server in play as well as multiple liquidity providers, then you’re in the right place and requotes should be a rarity. If you’re looking to avoid requotes, you can place a market order, but this leaves you at the mercy of the market. If the markets are volatile, or if your individual position is volatile, this can lead to slippage, which basically means you’re not getting a good or fair price.

Trading Conditions

When looking for the right forex broker, there are other factors to consider as well. For instance, when it comes to spreads, you need to know how many sources the prices are streaming from and at what speed. In regards to execution, what is the average speed? Are the servers fast? And where are they located? The following factor only applies to some traders. And, to be honest, it’s not recommended for anyone. Margin might increase your profit potential, but it can also ruin your life. If you’re still adamant on using margin, fund out how much leverage you can use. For currency pairs, find out how many different currency pairs are streamed. How many sources are there for those currency pairs? For swap rates, which are determined by overnight interest rates, can you go long and short for all currency pairs? All of the above is important information. If you want the simplified version, look for low spreads, transparent pricing, and no hidden charges.

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