Whether you like it or not, you are forced to work with a broker for forex trading. However, choosing a broker can be very tricky for two reasons:
- There is a lot of conflict of interest in the retail brokerage industry and by that we mean your broker can open trades opposed to the ones you take, in the other side of the market and make money when you are losing.
- There are a lot of scam brokers which act as betting companies, without actually opening your trades in the market (so when you lose money, that sum ends up in their pocket and when you make money they have to share a part of their profits with you).
What you should watch in order to avoid some nasty situations?
First and foremost, your broker needs to have a good reputation and at least a few years in the industry. That allows you to find a lot of feedback about its services and if the clients are satisfied.
Regulation is another key factor when choosing a broker. If a broker is regulated, you know that someone, sometimes checks what they are doing and that forces the broker to avoid illegal activities.
A good liquidity provider and fast execution platform can help you place trades at the price you want without requotes. Also, the platform should provide you with all the technical tools you need (most of the brokers use mt4, but there are some who use their personalized platform). Great customer support should also be needed as sometimes you would encounter problems.
Last but not least, the broker should have a large variety of options for depositing funds and withdrawal methods. Also, both deposits and withdrawals should be processed in a short period of time.
To sum up, choosing a broker, especially when you are a beginner with forex trading, can pose a lot of problems, but looking at the details we have mentioned above you can avoid being fooled by scammers and be able to trade professionally with a professional broker. Try not to become too sentimental when it comes to your broker. He just offers you some services in exchange for the commissions you pay.