Forex Brokers Guide - Learn Forex Trading in 2023

Which broker is the best for forex trading? Want to jump straight to the answer? If you are ready to start investing in the forex market, we look at five things to consider when choosing the broker that is right for you:

Recognize your own needs and rank them first
Look for what really matters to you in a broker’s offering
Don’t take others’ word for it
Test them out yourself
Keep away from bonuses

No decision is as crucial for an aspiring forex trader as the choice of forex broker they make, as you simply cannot access the global forex marker as an individual, without using the services of a brokerage as an intermediary. Of course, it is possible to switch broker if you happen to make the wrong choice, but it is definitely wiser and more prudent to make the right choice from the beginning, as choosing the wrong broker, whether an unreliable one or one that does not best match and fit your own needs and requirements, will definitely jeopardize your chances for success and profit making.

To mitigate the danger of making the wrong choice of broker, make sure you fully grasp what is at stake and what it is you should factor in when taking your decision. To help this process, check out the very enlightening and insightful posts below, which touch upon every aspect, thus enabling you to effectively navigate the forex brokers landscape and make the best choice of broker for you.

The online forex trading landscape is booming and expanding on a daily basis, meaning there is ample supply of brokerage services and agencies, to meet the increased demand across the globe. The sheer abundance of brokerages however is a double edge sword, since it guarantees that the right and most suitable broker for you definitely exists somewhere, but having to shift through the rubble to identify that best match becomes a complex and demanding task. Despite its complexity, it is a task worth pursuing as managing to identify the most suitable brokerage is bound to ease your journey into the world of trading and greatly maximize your chances for trading success in the long term.

Whether you want to choose best on which broker caters for social trading, which is mostly suited for beginners, which is the most reliable and trustworthy, which ranks best in reviews or according to the brokerage model they follow or trading platform they use, remember that the single most crucial factor to guide your selection, should always be your own unique personal circumstances, preferences and needs.

Smart tips for finding the best forex broker

The forex brokerage landscape is so packed and crowded that any novice broker will surely get a headache just by browsing through the available brokerage options. Choosing the right broker is crucial in avoiding a potentially disastrous trading endeavour and in fact the actual brokerage choice is perhaps the biggest trade placed by a forex investor. This is because when opening an account through a specific brokerage your deposited funds are entrusted in them and your expectation is that you will be able to trade effectively using the services provided by the broker, and also be able to withdraw your funds when you have hopefully achieved profits.

Thus, it becomes evident, that if you choose the wrong broker, if you trust a firm that turns out to be scammers and fraudsters who will run away with your money, then you are in for a big disaster, no matter how much time and effort you have spent on learning about forex trading and devising your trading strategies. The secret to finding a great forex broker lies in striking a balance and following a set of tips that will ensure that the broker you choose is the most suitable for your own specific forex trading needs, while at the same time the choice you make is safe and does not leave you exposed to scams.

So, here’s what you should be doing during your broker choice process to avoid potential traps and loopholes:

1. Recognize your own needs and rank them first

To be able to assess whether a brokerage meets your needs and requirements, you first need to know yourself what these needs are. Before starting to research and compare brokers then, you must first know your own profile as a trader, based on your specific circumstances and your individual trading plans and goals. For example, if you are planning to be trading small amounts on a daily basis, aiming to capture small market moves, then you must only search for ECN brokerages. Though such a broker will charge you commission on each trade, they usually offer much tighter spreads and you will need access to those if you are trading small moves.

An ECN broker is also what you should be searching for if you are going to engage in scalp trading. Another important aspect to consider is the amount of capital you have available for trading. If you can only allocate a small amount to your trading endeavour, then you should seek brokers that allow you to trade in micro-lots through a mini-lot account and not open a standard lot account, which would work better with bigger available capital. Your actual trading needs are not the only ones to take into account. As different brokers accept different methods for funding your account and allow different ways for withdrawals to be made, you must know your own preferences and find brokers that can.

2. Look for what really matters to you in a broker’s offering

Knowing what you want is a great first step and would help narrow down the list of prospective brokers you are considering. Chances are however that the list will list remain quite extensive, so make sure you look out for specific merits in the remaining brokers, ensuring they do offer what really matters to you. For example, if excellent customer support is important to you, a good way is to open demo accounts with several brokers and then reach out to their customer support team with questions and queries. Check out their response time and whether the answers you are receiving are clear and helpful. This will help you eliminate all brokers who fare poorly in terms of customer support.

On the other hand, if dealing with a fully regulated broker is important for you, then you should be considering only those brokers fully regulated by reputable watchdogs across perhaps more than one jurisdiction, for example brokers regulate in the US, the UK, Canada and Australia or big EU countries. If you are less conservative and less risk averse, then perhaps you should also be considering more newly-established and yet unregulated brokers, as they often offer more highly lucrative opportunities. Moreover, if you plan to trade as a day trader then you will need a broker that allows you direct interaction with the market and not a dealing desk, as through a dealing desk trades longer to be executed and often result in re-quotes, which could lead to many trading opportunities being lost. Competitive spreads are also important for day traders and thus non-ECN accounts would not be suitable for this type of trading.

3. Don’t take others’ word for it

It is only natural as part of your broker research to check out what other customers and traders have written about a particular broker in terms of reviews or comments in various forums. The problem with such reviews and comments however, is that you have no way of knowing whether they are credible or not. In fact, many are often fake and this is true not only for positive reviews, that might be “planted” by brokerages themselves, but also for negative reviews as well. Ever since online retail forex trader made trading accessible to everyone, hordes of people are trying out and most of them end up losing money, but tend to blame others when this happens to them. If a trader is vocal about their losing trades and complaints about their broker, doesn’t necessarily mean that the broker was somehow at fault for the unsuccessful trades performed.

In a nutshell, though checking out what others have to say about each broker may be useful, you should always strive to maintain objectivity and consider all opinions with a pinch of salt.

4. Test them out yourself

And since we advise against relying heavily on the opinion of others, once you have narrowed down your list of potential brokers, it would be a very good idea and an effective assessment method, to test out those you are mostly interested in yourself. This can be done by opening demo accounts with all those brokers and compare their offering inter alia in terms of order execution, customer service and platform stability.

For those brokers that you find the demo account to be working consistently well for several weeks, you can proceed to open a live account but only fund it with a fraction of your available funds, just to ensure that things are equally smooth under real trading conditions as well. During this time, you may still be testing out the customer support responsiveness and effectiveness. Once you achieve some profits, it should also be prudent to withdraw some funds from your account to also have a valid opinion on how smoothly, easily and quickly withdrawals are handled.

If you are happy with a brokerage by this stage, then you can confidently deposit the full amount of your available funds and start trading full steam as following such a thorough due diligence, chances are that you have chosen wisely.

5. Keep away from bonuses

A final loophole to be avoided is being lured by brokerages that offer bonuses and other fancy schemes in order to lure in new customers. Though such offers may look very appealing on the surface, the truth is that nothing really comes for free and that there are usually terms attached to such incredible offers which end up interfering with your decisions and how you trade or how and how much you can withdraw. Moreover, when trading with bonus funds this may lead you to be reckless and take wrong decisions, while it is also true that the brokerages whose offering is already solid and excellent do not need to resort to such “offers” to be earning customers. Thus, since it is always better to be safe than sorry, ignore the sirens of bonuses, no matter how attractive they may look.

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