If you’ve been considering the benefits of investing your money into trading strategies, then you may have looked into the benefits of Forex and online trading. Although there are many different ways to make money trading, Forex and Binary options are one of the best-known and most popular options. If you are just starting out you should check out our forex trading guide for beginners before you do anything else.
However, there are a few things that you’ll need to figure out before you get started.
For instance, not only will you need to ask yourself what kind of currency pairs you want to trade, but you’ll also have to determine which forex/options broker can give you the best support in the financial market, what kind of trading account you want to open and if it is maybe better to start with an managed account first.
After all, even if you have some of the best insights and strategies that the market has to offer, they won’t do you much good if you’re working with an unscrupulous broker. There are plenty of stories out there of scam brokers who leave their traders penniless.
These tips will help you to find a online trading platform that suits your need and expectations, without putting your finances at risk. If you want to get more information about forex trading companies – we have just published and article about the best trading platforms in 2019 where we reveal some of the most trusted platforms in overview.
Know What You Should Get from a Broker
Different brokers can offer unique packages and support depending on what you need as an investor. However, no matter what your goals might be, it’s essential to know the standard features that should come as part of any brokerage package.
For instance, you should never go for a broker with a “dealing desk.” This means that your broker has a middle-man that you have to deal with before you can interact with the market. There’s too much time involved in sending orders to a trading desk, and you could end up missing out on crucial prices because the process moves too slowly.
Other things to look for include:
- Competitive spreads: Ultimately, if you’re planning on being a Forex day trader, you need competitive spreads. Your spread needs to be as close to a single point in percentage as possible. Too much higher than this and you’re wasting all of your earnings. With an ECN account, it’s common to find a spread that’s less than half a percentage point.
- Strong regulation: Your broker should always be regulated in a country with a fully-established financial system. For instance, most traders will want to opt for brokers that are regulated by authorities in New Zealand, Australia, Japan, Canada, the US, or the UK.
- Availability: What good is a broker if you can’t communicate with them? You need a broker that’s available when you want them to be. Test response rates by getting a demo account and finding out how long it takes to get a response from the service team.
Think About Your Unique Requirements
Now you know what any trader should get from their Forex/binary options broker, it’s time to think about what you need in particular. Everyone in the Forex market has its own strategy and risk capacity. With that in mind, you’ll need to find a broker that suits your needs and your trading goals. Its clear that if you are planing to trade CFDs, than you will not search for the best forex broker..
For instance, are you going to be trading a lot throughout the day, or just making a few changes to your accounts? What kind moves are you going to make? Big, or small? If you’re trading a lot with small moves, then an ECN broker might be your best option. You’ll get better spreads – even if you have to pay a commission.
ECN brokers are also useful if you plan on doing scalp trading.
Another point to think about is how much capital you’re going to have to work with. If you don’t have a lot of money available right now, then you’re going to trade in micro-lots more often than not. On the other hand, if you have well over $50,000 to trade, with then, you can open a standard account and forget about micro lots entirely.
The key to success is finding an account type and broker that meets your spending habits. You’ll also need to find someone who can deliver the deposit and withdrawal strategies that you prefer to use too.
Check Unbiased Reviews Of The Existing Trading Platform
Part of choosing a trading platform is finding out what other people have to say about the company you’re going to work with. After all, consumer reviews can be some of the most useful pieces of information on the market.
Just be wary of the information you get from testimonials. Unless the reviews come from a credible source, (and it’s hard to find one of those these days), you might find some fake comments. Some angry traders might say bad things about a broker just because they’ve lost some money. However, losing cash isn’t necessarily the broker’s fault – every trader loses cash from time to time.
There’s also a risk that unscrupulous traders will go ahead and pay people to write positive reviews on their behalf – you can’t trust those messages either.
Don’t be tempted to ignore all the information that you find just because a broker offers you a bonus too. Nothing in life comes for free – particularly money. If you accept a bonus, you could be setting yourself up for trouble later.
Test the Broker
Finally, remember that you need to test the broker out for yourself before you can get a good idea of the experience, they can genuinely give you. There’s a lot of false information out there, and it’s hard to make decisions based on what you find out from other users.
The easiest way to get the best information on your broker is to open a demo account and start trading with the company you’re interested in using. If the demo gives you a great experience for several weeks in a row, then you can open a live account with a small amount of capital, to begin with. Trade in your life account as normal with just a bit of cash and see how everything works.
After a while, when you know for certain that you can trust your broker, you can begin to play with larger amounts of cash. Testing the live account in advance will ensure that you don’t face any problems when it comes to withdrawing and depositing money. It will also mean that you get a feel for how the broker works and how much you can rely on them.
It’s a slower way of getting started with Forex than jumping straight in – but you’ll get better results and fewer losses in the long term.
If you need more information about particular trading platform you can check out our detailed reviews: