How to Choose the Right Forex Broker
|For anyone attempting to start trading in the Foreign Exchange Market, it’s important that you follow the set steps that have proven time and again to work. For instance, you first must take the time to adequately learn about the marketplace. You have to be familiar with currencies and up on your current events to realize if anything is threatening your investment. And, like it or not, you’re going to need a broker.While you can find brokers in most of the major cities in South Africa, if you are not going to trade with larger accounts, then you will have a hard time finding someone who can be dedicated to your account. This is why I trade online, and why I recommend others do the same.
These brokers are a legitimate part of the Forex experience, and finding the right one is vital to your success. Here are what I consider important features, bonuses, platforms and also my reaction after having tried each of them.
Quick List To Top Online Brokers
By popular demand, if you want fast recommendations, here you go:
Q ‘n’ A Session for Would-Be Traders
What choices do I have?
The range of Forex brokers available is impressive. You can find brokers to work with you on any budget, using a wide range of platforms, and offering multiple account types. As long as you’re willing to put in the research, you can find a lot of options per your category of investment.
What should I focus on?
Focus on finding a broker that matches your needs. This seems generic, but it’s very particular to your specific set of demands. For instance, if you don’t have a lot to invest, focus on a broker offering a micro account, tight security, a lot of support, and other features. If you’re after a managed account with a mobile platform and high leverage, then this is obviously what you want to focus on in any broker.
How can I vet my broker?
Every broker is going to claim to be the best, but the trick here is finding out what real people say about them. Leave those short 40-word reviews alone and focus on blogs and forums dealing with real, experienced Forex investors who give their take on the broker you’re looking at. The people using the broker will speak truth to power.
Why do I need a broker in the first place?
Having a broker gives you access to different charts and analysis, constant reports on the market, someone to help you or handle the trades for you, and it basically allows you to be more of an investor than a trader. This minimizes risk and maximizes profit.
Are brokers honest?
Not every broker is going to be honest. This is where vetting comes into play. However, on principle, brokerages are businesses and businesses need to profit. So you will find that a legitimate broker is honest and is very concerned about helping you make money.
Will my broker help me earn money?
Yes. A good Forex broker’s number-one goal is to ensure that you earn money. They’re either going to give you the tools to achieve or manage your account for you (with you still calling the shots, of course). If you don’t earn money, they won’t earn money. Your success is in their best interest.
What platform or software will my broker offer?
Some brokers have proprietary software, while others use popular platforms like MT4, cTrader and other software packages. No matter which type of platform it is, however, every broker is going to offer something to you.
What’s the deal with South Africa and Forex brokers?
South Africa has a lot of rules and regulations in place making it difficult for investments, but not impossible. You won’t find a lot of brokers in South Africa, and if you do it doesn’t matter as long as you vet them properly. The money is exchanged elsewhere. Just be careful of scams.
What types of currencies and commodities should I look for?
A good broker is going to have between 30 and 50+ currency pairs, gold and silver, CFDs and other commodities you can trade with. You don’t have to settle for currency alone just because you’re seeking a Forex broker.
A Final Note
Every Forex trader is different in his or her needs and desires, so there is no one-size-fits-all broker. To find the right fit, make sure you’re reading reviews and vetting the broker properly. Take your time to choose the best platform, the best account, and make sure you understand the risks involved.