The most important factors in selecting a top broker

Brokers are a must if your goal is to make profit, but their reliability can not be proven with words. Before some of you put your life savings in the hands of a Forex broker, it`s necessary to check several aspects. Here`s a short guide that will point out the main criteria that must take into account before you start trading with a broker.

1. Regulation

In Europe, Forex brokers should be monitored and supervised by the nation’s financial operations, just for traders to be protected from possible illegal activities. Since there is no unique entity, the rules may differ from one country to another. For example, in the UK, brokers are regulated by the FCA and in Switzerland by CFB. To have insured deposits, they must have financial coverage, providing sufficient liquidity.

2. Trading platform

Most transactions in Forex are mediated by the brokers trading platforms, which is why it must be efficient and at the same time accessible to customers. MetaTrade 4, among the most popular, is the perfect solution that meets the requirements of all participants in the forex market.

3. Bonuses

Surprisingly but some Forex brokers offer bonuses for deposit customers, proving so their good intention and offering their services. Bonuses can range from cash amounts that the client can trade to free of charge trades.

4. Commissions and Spreads

Trading fees should be as low as possible. The broker earn from units added to the difference between the selling price and the buying of the currency pair, so the trader don`t have to pay commissions.

5. Initial investment

The size of the initial deposit may raise questions in choosing a forex broker and it`s desirable to be based on clients capacity to risk. Forex brokers offer many types of accounts ranging from a minimum of $100 (due to leverage). Contrary to expectations, an increased balance allow traders to regain from bad trades.

6. Leverage

Leverage allows investors to achieve a significant amount to trade, while limiting the risks faced by the funds invested. Using leverage you`re purchasing power can reach up to 1:500, giving you a major advantage (but keep in mind that even the profit potential is big so is the risk involved, you can lose your entire deposit.

7. Customer Support

Most Forex brokers help their clients develop trading skills by proving them the opportunity to trade for free with demo accounts. This way traders become more familiar with the platform they`ll use and also with how the financial market works. Other than this, a broker`s offer may include an education center with information for beginners and professional traders, webinars/seminars, daily analysis, signals, 24/7 assistance and personal account manager.

I hope you found this article useful because in my next article I`m going to give you a few trading tips that every trader (beginner or pro) should know and use in their trading strategies. After you find the right broker and start trading you`ll need all the help you can get.