How to find reliable brokers to make forex? This is the question that many ask when they want to start investing in the markets. Indeed, with so many names to choose from on the market, it may be difficult to find the most reliable broker, the safest and most guaranteed.
In this article, we want to list a number of points that can be useful for finding a safe broker. Here we have a complete guide with 7 steps that will allow you to orient yourself better in this world.
How to choose a safe and reliable broker
- Regulatory
It is undoubtedly the most crucial aspect to take into consideration because enrollment in a supervisory body guarantees the seriousness and reliability of the intermediary.
Regulations vary from country to country, according to this list:
- Europe: CySEC (Cyprus Securities and Exchange Commission);
- United Kingdom: FCA (Financial Conduct Authority) ;
- United States of America: NFA (National Futures Association) and CFTC (Commodity Futures Trading Commission)
To verify whether a forex broker is regulated or not, there are two ways: the first is to go to the broker’s website and look for the regulators’ logos; the second is to go directly to the institution’s website and look for the list of authorized brokers to verify the actual presence.
- Evaluate the support service
Giving an opinion on the support service provided is very important. A good broker will have a professional assistance service and will provide his clients several ways to contact him: telephone (preferably toll-free number), email, assistance ticket, chat in real-time.
While you are evaluating the support service (before opening the account) ask all the questions that come to your mind, and if the person on the other side answers in a professional and fast way it is certainly a positive thing; on the contrary, if it responds badly or listlessly, or does not even respond, this must put a brake on that particular broker.
- How many accounts are offered?
There are the brokers for beginners, and financial brokers for experienced and able to understand the difference is critical to choose well.
Usually, beginner brokers also offer small accounts (so-called ” mini accounts “) which can be opened with a payment of $100 (or equivalent currency) and which allow you to use a minimum leverage. These small trading accounts will enable you to invest in the currency market without risking much but having a “taste” of what real forex is.
In addition, does the broker also offer demo accounts, which allow you to try the platform without risking it? If the answer is negative, it is better to go elsewhere.
- The demo accounts
If you are a forex beginner or want to test a new trading platform, then the fundamental step is to open a forex demo account. They are free accounts that everyone can open to investing without risking their own money, but making forex with “virtual” money made available by the trader.
Each broker offers one, and it must be so because each trader must be given the opportunity to try out the investment platform before depositing real money.
- Minimum deposit, spread, and leverage
The fourth aspect to consider concerns the general conditions of the proposed accounts, with minimum deposit, spread, and leverage are the masters.
- The minimum deposit is the amount you need to pay to open a real trading account. Some brokers start at $100;
- The spread is the contrast between the buy and sell prices of a given currency pair. It represents a cost to the investor, so the lower, the better.
- The leverage is a multiplier of the open positions. Leverage of 100:1, for example, allows you to invest 100 USD for every real USD you have in your account. It enables you to multiply your gains, but also your losses, so you have to use it carefully.
- The trading platform
When choosing, the trading platform must be carefully evaluated, given that investments are made through it; therefore, it is essential to understand if it can be right for us or not (because each platform is different).
We should evaluate all the platforms offered by each broker, from the classic one (which you download and install) to the web one and also the mobile version, considering that in 2020 it is always easier to trade from smartphone.
In order to evaluate the platform, we recommend opening a free, zero-risk Forex test account, the best way to test everything in person and without losing money. When looking for a demo account, you’ll find that most brokers support the MetaTrader 4 platform, as well as its successor. MetaTrader is one of the most widely used Forex trading platforms.
- Investment opportunities
Today, most brokers offer a wide variety of investment products, although some differ because the supply is greater.
You should choose a broker that allows at least investing in:
- Currency pairs
- Crypto value
- Commodities (are the raw materials)
- Most famous actions
- Stock indices