Forex Broker Rating
Features To know When Choosing A Forex BrokerAlthough we provide a Forex broker rating service, if you go to your favourite search engine and do a search for 'forex brokers', you will be bombarded with endless results of companies all vying for your business, so how do you decide which one to go with? Well here's five important points to consider:
- Location
Always look at where a company is registered. After all if you're going to be sending money to a company in order to start trading, do you really want to be sending it to an offshore company based in some remote part of the world, and can you be sure that you'll be able to successfully withdraw money when the time comes?
- Regulation
Following on from the last point, if they're based in the US or UK, for example, check that they're fully registered with the relevant regulators, such as the NFA and CFTC in the US and the FSA in the UK.
- Reputation
Reputation is another point to consider and again requires a little bit of research. Do a search at your favourite search engine for the company you are researching and see what other people have to say about them. What better way to find out about a company than seeing what other traders have to say about them?
- Trading Platform
If you're going to be using a company's trading platform on a regular basis, then you need it to be easy to use and user-friendly in general so test drive the demo platform if they offer one. Also look to see what extras are included such as charting facilities and news updates.
- Spreads
If you're a short-term trader this is a very important factor. If you're a long-term trader looking for moves of several hundred points each time, then a few extra points spread won't make much difference, but if you're a scalper or short-term trader then it can be the difference between making money and losing money. After all it's obviously so much easier to make money trading the GBP/USD intraday with a 2-3 point spread than a 5-10 point spread.
So there you have five important points to consider when choosing a forex broker. You'll notice I didn't mention margin as a factor. This is because it's far too easy to be attracted to brokers that offer up to say 1:400 leverage, and therefore allow you to take out very large positions with a small margin, but this is a very dangerous game and it's all too easy to over-leverage yourself and wipe out your account completely.
Choosing Your Forex Broker - Have You Made The Right Choice?
As you will notice in the forex broker rating page on this site, many new forex traders automatically assume that if they deposit some money with a forex broker, then they will have no problems withdrawing money when the time comes, whether their capital has increased in value or not. However this is a false assumption to make because the sad reality is that not all forex brokers can be trusted.
The major problem you have is that there are a lot of smaller brokers based in offshore locations that are completely unregulated. Therefore to some extent they can make up their own rules. Of course that's not to say that you can't trust any unregulated brokers, but to be on the safe side I would always recommend you choose a broker that is fully regulated by a proper regulatory body.
So for instance if you are a UK-based forex trader and want to open an account with a broker based in the UK, then you would want to open an account with a broker who is fully regulated by the FSA. Similarly if you are planning to open an account in the US, then you should ideally choose a broker that's a member of the NFA and is regulated by the CFTC.
Unfortunately another problem we all face as forex traders is that even the large well-known brokers that are fully regulated will sometimes create problems relating to withdrawals and other issues.
In some cases this may simply be a case of them having a lot of procedures you need to go through before you can access your money, but in some cases they may be deliberately holding onto your money. In which case you should contact them by phone and try and sort out the situation, and if that doesn't work you can report them to the relevant authority if they are regulated, or threaten to post negative reviews about them all over the internet if they are not regulated.
The overall point I want to get across is that there are hundreds of different online forex brokers, but while many of them are fully regulated and completely trustworthy, there are many others which you should thoroughly research before you think about opening an account. There are lots of review sites on the internet so you will have no problems finding honest reviews about any forex broker you may come across.
Your safest bet, however, is to go with one of the major online forex brokers that are fully regulated in their respective country and are well capitalised. That way you know that your money is in safe hands and you are likely to have no problems withdrawing your money at any point in the future.
Another 4 Key Points in Choosing A Forex Broker
Before you dive into online forex trading, read our Forex broker rating and comments. Then watch out for the below points before you choose a Broker. In simplest terms, a broker is an individual or a company that buys and sells orders according to the your (the trader's) decisions. There are many brokers online and you may feel overwhelmed. It is advisable to undertake a little research to give you an insight into the services that are available.
To ease your burden, I have outlined 4 major Key points to consider.
1) Is the Broker is fully regulated?
This is a very important step and should not be over looked. Find out with which regulatory agencies the broker is registered. In the United States a broker should be registered as a Futures Commission Merchant (FCM) with the Commodity Futures Trading Commission (CFTC) and a NFA member. The CFTC and NFA were made to protect the public against fraud, manipulation, and abusive trade practices. Please, stay away from non-regulated firms! otherwise you may be swindled out of your entire savings.
2) Does the Broker offer a 24 hours service?
The Forex Market is a 24 hour market, so 24 hour support is a must. Here is a good tip: choose several online brokers and contact their help desks. Seeing how quickly they respond to your questions. If you do not get a speedy reply and a satisfactory answer to your question, you certainly wouldn't want to trust them with your business.
3) Does the broker several account opening options?
The broker should offer at least the micro and the standard account options. For those that are new to Forex trading and for those that do not have millions of dollars in risk capital to trade, being able to open a micro trading account with only $250 would be a great feature.
4) The Online Trading Platform.
The trading software is very important. See whether the broker allows you to trade over the Internet relatively easy. Also check out:
The spreads: The spread is the difference between the buy and sell price of any given currency pair. Lower spreads save you money.
The ability to view real-time currency exchange rate quotes.
The availability if an account summary showing your current account balance with realized and unrealized profit and loss, margin available, and any margin locked in open positions.
The ordering system and the instant execution of orders. This is the backbone of any trading platform. Do not settle with a firm that re-quotes you when you click on a price or a firm that allows for price slippage.
The ability to access to the best charting and technical analysis available to active traders. Look for a broker that provides free professional charting services and allows traders to trade directly on the charts
Confirm that the broker offers the seven major currencies (AUD, CAD, CHF, EUR, GBP, JPY, and USD) currency pairs at a minimum.
Choosing A Forex Broker
Sometimes Forex broker rating could be useless without further research. Some angry reviews can shut off your will to join a broker that might been credible for years. You will want to choose a broker who will be a good fit for you and who has the experience necessary to help you be successful. The choice should be one that will last throughout your trading career. You need to find a broker who will match you in aggressiveness, who is experienced working with the kinds of investments you are wanting to make and that you can afford. Following are some simple steps to follow in the process of finding a forex broker.
Step 1: Research
When seeking a forex broker, there are certain credentials you will want to look for. Be sure to find a broker who is registered with one or more regulating authorities. Brokers in the United States should be affiliated with the National Futures Association (NFA) or the Commodities Futures Trading Commission (CFTC); for brokers in the United Kingdom, look for the Financial Service Authority.
How much or how little leverage does the broker require for a trade? This question is very important to a new trader who does not have a lot of capital to work with. Some brokers will only broker a deal with a substantial investment. If you are a conservative trader or have a slim budget to get started, be sure to seek a broker who will work with what you can afford and will not pressure you to go beyond your limits.
If you plan to hold positions overnight, it will be necessary to find a forex broker who credits or debits daily rollover interest. This is a practice that not all brokers will take part in, and depending on the kind of trading you are hoping to process, this will be a very important point.
Step 2: Compare Brokers
Once you have researched a number of forex brokers, and have narrowed your choice down to the top two or three options, take the time to compare their histories and statistics. There are websites available that will delineate vital information about each broker so you can compare their strengths and weakness, their habits, and their requirements. Use this to rank your choices.
Step 3: Open Demo Accounts and Ask Questions
Demo trading sites are available online. It is advisable that you choose two brokers, and open a demo account with each of them. This will give you an opportunity to experience simulations of real trade experiences so that you can ask educated questions and observe each broker as they respond to various situations. The advantage here is twofold: first, you will learn a great deal about the practice of forex trading before investing any real money, and second, you will get to experience each broker's techniques and reactions in real life scenarios. After this experience, you will likely have chosen your most appropriate forex broker.
3 Things To Consider When Choosing Your Forex Broker
Most of Forex broker rating platforms can be deceiving. Some people comment negatively on purpose. They want to take down a business for a competitive broker and keep theirs apparent in the picture. That is why we moderate every single rating and comment to ensure integrity. If we find something suspicious, we immediately delete it.
It is a little known fact that foreign exchange trading, otherwise known as forex, fx, or currency trading, is largely open even to small investors. This 24 hour market operates from Monday to Friday without definite closing times, making it highly accessible to anyone with a computer, an internet connection and as low as three hundred dollars.
Foreign exchange brokers are major components of the foreign currency trading market. They are the middle men of the market, acting as intermediaries between traders (you) and the foreign exchange market. Since they play a very crucial role in the process, you will need to find the best of the lot. What exactly do you look for though?
A lot of manuals from forex day trading training centers have outlined the following to guide new home traders in choosing a suitable forex broker:
1. Your chosen foreign exchange broker should answer to a regulating body or authority. In the United States, brokers are required to be registered as a Futures Commission Merchant and are regulated by the Commodity Futures Trading Commision. This is often the case based on the law of most countries. Check the credibility and credentials of your chosen broker through their website. Heed the advice of your mentors from forex day trading training and trust your instincts. Also check the displayed memberships of your chosen forex broker with the appropriate regulating bodies to avoid scams and fraud.
2. Because the market is open 24 hours every trading day, you will need support whenever you are up and trading away. When choosing a forex broker, make sure to check that they offer both online and telephone assistance 24 hours a day so you can be at ease knowing there is help everytime you are stuck. You can get an idea of your chosen broker service quality by ringing them and asking them for specific details about their technical support. How they answer your queries should reveal just how much they can help you in the future.
3. Although the forex market sees most pairs of currencies being traded everyday, it is important that your forex broker trades in the five most important currency pairs out there as these pairs hold the most profit for traders.
You can also check for forex brokers reviews online to help you make your decision. Smaller forex trading accounts and other broker listings should point you in the right direction and guide you as you choose the best possible broker to work with.
Or if you are lucky, the very people who provided you with forex day trading training may also function as forex brokers. You might find it easier and more convenient to work with these people if you liked their training. This also guarantees that not only will you get 24 hour support from them, they can also give you advice on live trading and other training materials to help you increase your returns.
Choosing A Reputable Forex Broker
The Forex market is one of the most fast paced markets and people have managed to make millions through Forex currency trading. Forex trading has tremendous potential to reap huge profits provided you know the right way to do it. Being one of the most popular investment vehicles, it is easier to master the art of Forex trading by attending Forex trading courses or workshops. Forex education can help you a great deal if you want to be extensively involved in Forex online trading.
In order to be a successful Forex trader, you need to have a proper Forex trading system in place that will include a good Forex trading software and smart Forex trading strategies to understand the historical trends and plan your moves accordingly. In addition, you will also need an efficient Forex broker to help you with your trading needs. Well, it can be a daunting task to find a good Forex broker, as the market is flooded with them and it may not be very easy to pick out the ones that may be best for your trading style.
Most people prefer to manage their trading with the help of a competent Forex broker who has been around for quite some time and knows the rules of the game. If you are new to the Forex market, trading with a reputable Forex broker can be the difference between winning in this business and losing. The same holds true if you are working with a wrong broker and therefore, good research skills are required to track down the best Forex broker for your needs.
When looking for a Forex broker or a brokerage firm for trading the forex market, you must shortlist all those who have a trusted reputation in the industry. It helps to dig into their history and check on a few of these clients to ensure that they are genuine. This can easily be done online with the help of search engines such as Google, Yahoo and others. When looking for client feedback, make sure that you get unbiased opinions. It doesn't help if you read glowing testimonies of a forex broker from their own website. Please note that testimony of clients should only be used for guidance and should not be the sole deciding factor.
For many, an ideal broker is the one who has plenty of knowledge about this business and someone who can guide you through the various stages of trading. However, you must be diligent when choosing such a broker and check on their reputation. There are countless brokers out there who are a reservoir of knowledge, are motivated to help you and gladly offer their advice. Forex brokers who are invariably new to the market may lack experience in spite of having other requisites of Forex trading. Trusting your finances with such a company may not be a good idea, as neither of you will be familiar with the roller coaster ride of ups and downs of the market prices. Thus, experienced brokers who have a long history are generally better and help to ensure that your money is in safe hands.
One of the easiest and probably the most reliable ways of finding a good broker is asking for references from friends and acquaintances. This will take away most of the burden of starting from a scratch and also give you a clear idea about what to expect from your Forex broker.
So, ask for referrals, research, and conduct a background check to find the best Forex broker who has profound understanding of the Forex trading business.
Tips On Choosing The Right Forex Broker
To trade forex you need to open an account with a forex broker. The global nature of forex markets means that you have a wide choice of forex brokers to choose from, right across the world.
The forex trading business runs differently to equity broking, where trades are made through a clearing house and stock exchange and where money is made from fees for every trade, often referred to as the brokerage.
The Spread
Forex brokers make their money from the difference between their quotes of the ask price, the price their customer buys at, and the bid price, the price their customer sell at. This is called the spread and is measured in points or PIPs, the smallest measurement for a change in the price of a forex. For example, a one point or PIP change in the USD is 0.0001X the USD amount. Naturally, a wider spread results in more revenue for the broking firm.
Forex Brokers Reputation and Capital Backing
To choose the right forex broker, you should start with considering its reputation and what trading services it offers. Doing your research thoroughly will take time, but as with trading itself, will save and make you money in the future. There is a wealth of information on-line and in magazines. It is important to be sure of the credibility of your information sources. Internet forums used by other forex traders can be very helpful in cutting through the claims of each company. By listening to people, forums and magazines that you trust, you can build a list of quality firms to choose form.
It is important to be aware of unscrupulous firms as well as those operating in countries where regulations are weak. The USA, UK, Hong Kong and Australia are examples of countries with very strong regulatory environments.
In the USA, a forex broker is required to have a minimum of 20 million dollars, to ensure the protection of their client funds. To find out the capital backing of US broking firms, go to www.cftc.gov/marketreports/financialdataforfcms/index.htm. A large firm with a high capitalization ,with hundreds of staff, is more likely to be able to protect your funds in a time of crisis and provide you with services such as 24hr phone support.
Trading Accounts
Depending on how much you have to invest and how much you intend to invest in each trade, you will get an account with a minimum equity requirement. This is the amount of funds you must have in the account in order to trade. A reputable forex broker will generally recommend that you trade 1-5% of your total capital in any trade. For example, an account with a minimum trade of $1000 dollars could have a minimum capital requirement of $34,000.
Leverage
Many forex traders increase their potential for profit by engaging in leverage. This is where they borrow from their forex broker to increase the amount they are trading. This method of trading also exposes a trader to a higher potential loss. Brokers may offer leverage of 100 to 1 or 250 to 1, where you can borrow up to 100 or 250 dollars for every dollar you deposit with the forex broker.
Trading Tools
Some forex brokers include valuable trading tools with some of their accounts that would otherwise cost you to subscribe to. These include real time data from the markets, charting tools and access to industry leading financial media, commentary and analysis.
Avoiding Scams
Unfortunately, there will always be a minority of unethical brokers trying to scam their customers.
A bucket shop does not always enter trades into the general market by finding an opposing position. Instead, they take the opposing position, relying on the fact that most forex traders lose. Not only do they get the spread, they also keep their clients losing trade. Because that trade exists only on their internal systems, they can distort the market by widening in the spread. In a country with poor regulations, brokers could simply prevent trades from getting closed, to ensure that they do not lose.
Most trading platforms will allow you to put in stops; when a currency hits a pre-determined price, your trade is sold out. This is a helpful tool to minimize losses. However, an unscrupulous broker can see your stop and move the price to that point, sell out your trade, make a quick profit and then return the price to the previous position.
To avoid this and other pitfalls, do your research, make sure your broker is credible and get the account and trading platform that suits your needs.
Choosing The Right Forex Broker
Forex brokers are the necessary link to forex market, so once you decide to become a trader, you are doomed to long process of selecting the broker that not only suits you best, but does not scam its traders. Almost every day, a new forex broker is being born online. With the abundant variety of features and services promised, the trick is to find a broker that you can actually trust. All of them claim to be the best, and making the right decision is not an easy task. When choosing a broker, which characteristics you should look for and compare? What are ways to build a reliable relationship with a broker? How can you ensure the security much needed in forex trading?
Each forex broker offers spreads (the so-called difference between the selling and the buying prices of a selected currency pair). The basic rule is the lower the spread the better. However, for forex brokers the situation is reversed; since they get their commissions from spread, a higher spread is definitely better for any broker.
So, where is the comfort line where broker does not feel underpaid and a trader does not feel cheated? Generally, an excepted spread among traders does not go over 5 pips. Anything that goes beyond that is suspicious and should be avoided.
On top of that, fixed spreads is your best option. The last thing a trader wants to see is a change in pip spread when you least expect it. So, bear in mind that some forex brokers have variable spreads, meaning that during busy market hours the spread goes so wide, that the only time you could actually profit is when the market goes bullish.
What happens otherwise? Here is a perfect scenario: in the middle of your highly-planned and seemingly profitable trade where you have placed stop loss at, let's say 6 pips from your trading entry, the charts go wild and your loss has been reached within a blink of an eye. While you are shocked and unrealistically shaken up, the price goes back to the point of origin!
Solution to this disaster is simple; keep switching forex brokers until you find the one where unexpected stop loss hit dissolve. Once you find a decent broker, your chance of successful trade increases dramatically.
Moving on! Let's examine forex brokers available payment methods and hidden charges for withdrawing your account funds. Not all brokers charge, however some consider their transaction services worth a fee. On top of that, deposits and withdrawals have to be processed in a fast and smooth manner, meaning your forex broker should provide a secure online transaction and accept not only bank transfers, but also Paypal, Moneybookers or similar online payment services.
Speaking of withdrawal, once you which to get your money out of the account, there should not be any weird activity at all. And by weird, I mean a request for minimum amount of funds in your account at all times, or a lengthy authorization process or even a possibility of getting your account banned. Of course, this is extreme, and most brokers provide reliable services with acceptable terms and conditions. However, while you search for the perfect broker, it is wise to know what kind of beast might be luring on the net!
Next issue is leverage options. Leverage can be your best friend until it turns to your worst enemy! Surely to maximize your potential earnings, a broker with 200:1 leverage is the ideal option. How should you feel about higher leverage, such as, for example, 400:1? It is luring, however keep in mind that with 200:1 leverage a loss is just a slip... with 400:1 leverage the same fall is a suicide.
Regulated forex brokers are definitely much more reliable and stable. After all, there is a watchful eye of the regulating authority. Most registered forex brokers mention their regulator on the website. If, however, this information is unavailable for some reason, make sure to contact your broker and find out who is in charge.
Of course, regulation is not everything. Reputation among other traders is a very important fact. To find out what other traders think about a selected forex broker, try searching for forex broker reviews. There are sites that provide detailed broker reviews; you can also search forums and blog posts about the selected broker. Not everything written is reliable; however these forex broker reviews should give you some idea of other traders experiences.
Another overlooked issue is the speed with which your trading order is filled. Imagine having all set and you finally see the right moment to trade. The only thing that keeps you from profiting is the forex broker that does not process your order within seconds. If there is noticeable and uncomfortable delay, move on to the next broker until you find the one that is actually worth the commissions you pay!
Lastly, your forex trading professionalism relies on a combination of three ingredients: you, good forex broker and forex market itself. You cannot control forex market, however to ensure your success, you can control the learning process and the selection of a broker. By eliminating laziness and a bad choice of forex broker, you forex career is destined to be a smooth ride.