The foreign exchange market, also known as the forex market, is incomplete without forex brokers. This market is regarded as the largest financial market in the whole world. This is the place where traders from all over the world participate in trading. They are able to exchange, sell, buy and speculate on currencies.
In the foreign exchange market, investment management firms, central banks, hedge funds, commercial companies, banks, investors and retail forex broker take part. This is the reason why this market is considered as the largest financial market in the entire world. The forex market not only a wide opportunity for exchanging, selling buying and speculation of currencies, but also allows currency conversion for international trades and investments. The FX market has attractive characteristics that make it a popular market for people who want to earn large profits.
The foreign exchange brokers are an important part of the forex market. When you know what to expect from forex brokers, it will be easy for you to select one. It is important that you know what your broker is offering you so that you can open an account with him. As the forex market is a global market, what the forex brokers are offering will vary from one country to another. Your broker needs to have certain characteristics. Some of the characteristics of good forex brokers are discussed below
- Expertise and Credentials
The Forex brokers should have the required credentials. If your forex broker has the needed credentials, then they can make your time in the market a good and profitable one. Before choosing a broker there are some questions that you need to research about them. For example, how long they have been around, how do their current clients feel about them, what type of spreads do they offier etc. only after being convinced, go for the broker. Also, it is extremely important that you check the credentials of the forex brokers. Know if they have a good financial background or not.
Note: If you are in the United States, due to government regulations, you will have to make sure your broker allows for U.S. Traders.
2. Good trading platform
Always check if the trading platform that is offered by the forex brokers is efficient or not. The trading platform is actually software that enables the traders to carry out technical analysis, manage their accounts and receive forex news along with managing their accounts. As the foreign exchange market is volatile and dynamic at the same time, the forex trading platform needs to be quick and responsive.
These are just some starting points on what you should be looking for in your forex broker. The best one is the one whose interface you’re most comfortable using. So find out if they offer a demo account (most do by the way) and test out their platform before live trading.
3. Communication and Customer Service skills
It is said that the forex market never sleeps. So the broker that you select should be available anytime you require. Also, they should be able to answer to all your queries related to the forex market. This is of huge importance.
As stated before, you need to be comfortable with your broker BEFORE you start trading and they should be able to help you get what you want out of your trading. The best way to do this is to simply start a demo account. This allows you to get to get comfortable with their platform, learn the ins and outs of their platform all the while not losing any money while you’re at it.
Unfortunately, for U.S Forex Traders, we have a limited amount of brokers to choose from thanks to certain recently installed laws and regulations.
Check out some solid brokers here who offer demo accounts