There are many forex brokers on the internet today and choosing the right one is a very important decision and therefore requires due diligence before starting out trading. Here are some tips to help in selecting the right forex broker.
Licensing and Regulation
This is the most important point to look out for when choosing a forex broker. Make sure that the forex broker is registered with either the National Futures Association (NFA) or Commodity Futures Trading Commission (CFTC) for U.S.-based forex brokers or with the Financial Service Authority (FSA) for forex brokers based in the United Kingdom.
Customer support services
A good broker should provide very efficient and timely customer support services. Look at for forex brokers with local offices, specified account managers, 24-hour helpline facility (especially if you are new) etc.
Look out for protection plans
Trading forex online has a number of risks involved including possible loss of money. Make sure to check for brokers’ protection plans against bankruptcy and other legal issues
A good broker should have a good trading platform that provides a trader all he needs to make for proper trading. A good platform should have called demo account to allow a new trader test and master the platform, real time charts, real time news feeds, economic calendars and market commentary. Look at the key features of each forex broker before deciding which one to choose.
Good forex brokers are usually tied to large banking institutions because of the large amount of capital required (leverage they need to provide).
Study their reputation
What is the reputation of the brokers with other traders? Look out for other traders and ask questions about their experiences with the forex brokers you are considering. This should be able to guide you in deciding which of the brokers to decide upon.
Investing in forex is about making money. The last thing you need as a trader is high commissions and fees. Look at for the best commissions and fees available from top brokers. There are many offer commission free online trading. Also ensure that all service charges are clearly stated avoid brokers that come up with hidden costs.
licensed brokers are required by regulatory agency to have a certain minimum net capital for their operations. A complete list of U.S. broker capitalization can be found here. Brokers who don’t meet this minimum amount required can be forced to shut down their operations