One of the most overlooked aspects of being a successful trader is using a broker platform that is perfectly suited to your situation. Looking through the top 100 forex brokers list is a good place to start, but it’s crucial to know how to sift through which ones are more relevant to yourself, and which you should rule out entirely.
Regulatory compliance is usually the first step, but the chances are that if it’s on a credible list, it’s going to be licensed. However, it’s better to see if the broker is regulated by a top-tier regulator, like the FCA, and if it’s licensed in the country you’re residing in.
What features you look for when choosing a broker will ultimately depend on your trading style. For margin traders, having access to leverage will be important – as well as the leverage ratio. It’s not just the features but the markets too, as some traders will focus on common currency routes, whilst others trade exotic pairings and developing world currency.
Furthermore, the techniques required for your trading style, be it scalping through technical analysis or through news-driven investing will dictate which brokers are not suitable for you. Some brokers will specialise in having real-time news feeds built-in, whilst others will be centred more around technical indicators. Some will have more order types than others too, which are things such as stop-loss orders.
Algorithmic traders should look for backtesting features to test their strategy against, whilst the option for demo accounts is always handy for a beginner trader to test their strategy without risking financial loss.
The costs associated with trades are also important and highlights why a blanket approach to assessing the best broker cannot be taken. Brokers have varying levels of fees, commissions, and spreads. For those looking to take large positions for large amounts of time, the commissions and certainly overnight fees (often associated with leverage) are important, whilst the spread is of high importance to day trading, which operates under fine margins. Furthermore, more casual traders will want to avoid inactivity fees, but these are less important to active traders, and subscriptions for more advanced infrastructure shouldn’t be necessary for beginner traders.
Deposits and withdrawals
Depositing money and withdrawing it is very important in funding your trading and liquidating your profits. It’s not just the costs associated with them, but the payment methods and choice of denominated currency. Plus, withdrawal times can vary between brokers, which may or may not be important to you.
Customer Service and Promotions
By this point, you should have refined the list of 100 forex brokers down into just a handful. Now, we can rule out any broker that is reported to have poor customer service. You may not think you will use it often, but if and when you need to, it suddenly becomes the most important aspect of a broker. Furthermore, choose a broker that has the right methods of contact for you. Ideally, they will have several ways to make contact, not just a single live chat.
Finally, if you’re still torn, simply pick the company with the best promotional offer, as this is what they’re created for.
Interesting Related Article: “4 Tip to Consider When Choosing a Good Forex Broker“