Forex trading is a massive industry, worth over $1.93 quadrillion. Understandably, you probably want to get in on the action.
Trading forex is by itself a risky endeavour. So, remove any further unnecessary risk by ensuring that you work through a trusted forex broker. Not only can you sleep peacefully at night, knowing that your money is in the hands of a regulated body, but they also provide superior platforms with better information and tools for traders.
As your window into the markets, the importance of picking a reputable broker can’t be overstated. Let’s see how you can benefit from taking the time to research and choose the best broker for you.
Get tips and educational resources
This is especially useful for novice traders. The forex market is an incredibly intricate, complex, and dynamic space that can even take the most experienced traders by surprise. It can take years to master, and even then there are new things to learn every day.
Forex broker platforms often provide tips, news, and advice from forex experts. It can be a platform where you go to trade but also to get the latest news on the forex markets. They also usually have forums where community members can help each other out with technical and trading matters.
The broker themselves may also offer tutorials on trading. Often, demo accounts are available for beginners to trade using fake money but real-life data to get into the platform and learn the ins-and-outs of trading.
Of course, you want your forex broker to be a reputable and trusted company with as much insider access to reputable news sources and influencers as possible.
Get access to the best trading platforms
A forex trading platform is the most essential tool in your arsenal when trading the markets. It provides access to the market along with the ability to buy or sell currencies and trading signals to base your decisions on. It can be hard to choose the right platform as there are so many factors to consider:
- The spread
- How easy it is to use
- The available currencies or commodities to trade
- Specialized features like charting tools, automated trading, etc.
- How to deposit and withdraw money as well as the terms for doing so
Most forex brokers provide their clients with access to a trading platform. In this way, British Forex brokers provide top-level trading conditions by using the best tools out there. Top brokers are even able to identify the best platform for you based on your trading preferences.
Hedge your bets with leverage
If you’re less risk-averse, a broker can help you speed things along by letting you trade on leverage. What this means is that you effectively trade higher than a 1 to 1 ratio. Any movements in the market will result in bigger wins or losses by multiplying the difference by a certain factor.
For some, this is a great way to get things going if you are low on startup capital. If you are sure about a specific outcome, you can quickly double or triple your money. However, it’s important to understand the risks as it can also turn around and bite you.
Brokers can give you professional advice on when and when not to use leverage and provide ideal circumstances in which to do so.
Rest assured that you’re trading with a regulated financial institution
Regulated financial institutions adhere to specific governmental guidelines that assure fair and responsible practices. This safeguards both the industry as a whole as well as consumers that trust these organizations with their money.
Using an unregulated forex broker or informal trading platform is extremely risky. You have no idea who you are giving your money and personal information to. Doing so can lead to more damage than just losing your initial deposit.
In Britain, Forex brokers are regulated by the Financial Conduct Authority (FCA). A broker registered with this body should openly display it on their website. You can also check the FCA’s website to see if a particular broker is registered with them.
If your broker is from another country, you should check that country’s regulatory body. For the U.S.A., for example, it’s either the Commodity Futures Trading Commission (CFTC) and the National Futures Association (NFA).
Don’t take chances with your forex broker
Picking the right forex broker can be the most important decision you make at the start of your trading career. Research shows that traders are getting younger and younger, with 43.5% of traders being between 25-34. It also shows that 99.6% of traders are unable to get 4 profitable quarters in a row. That shows that forex trading is a long-game and that you might be with your broker for some time.
Make sure that you carefully look at their terms, including the minimum deposit and withdrawal amounts, spread, etc. before you deposit your first trading money. However, once you’re on board with the right broker, it will be plain sailing through the forex seas.