In the forex trading world, there are hundreds of forex brokers. To trade the forex market on a live account, you need to use a forex broker. A broker allows you to trade the foreign exchange market on real live data with a live account funded from your own money.
But not every broker offers the best trading experience. And finding a broker that offers you tight spreads, a low commission of trades, different account types, advanced trading platforms, etc, can be challenging.
In this article, we will list some of the main points that you need to “analyze” before using a forex broker for trading.
Before you start using a forex broker, first you need to know if the broker is regulated. A forex broker needs to be licensed to operate in the following country. And some countries have different regulations for the forex broker to operate. Most of the forex brokers in Europe are licensed in Cyprus. And through Cyprus Securities and Exchange Commission (Cyprus) they hold the license to operate on other European countries.
But some other countries like Germany require a different license, that’s known as BaFin. To operate in the UK, brokers need to be licensed by the Financial Services Authority (FSA). The United States regulates brokers with Commodity Futures Trading Commission (CFTC) and the National Futures Association (NFA) license.
There are other countries that require different licenses to operate, but we won’t get into these details. The license can help you find if the broker is regulated in your country. The license can also prevent scam brokers that are known to scam people. So if a broker holds a license to operate in your country, then that’s a good sign that the broker is a legit forex broker.
Spreads show the difference between the pips on currency pairs. And to have less more spreads on currency trading is something that you need to look for. Most of the forex brokers offer similar spreads that can vary from other brokers in small pips. You can check the broker’s spreads on their website, and by looking at the spreads you can make your decision on choosing your right broker in forex.
During each open trade that you open, there is a swap (commission) charged on your account. These commissions are charged if you hold your trade for days and are calculated mostly by overnight and on the trading lot volume. So if you hold the trade for days, don’t forget that the commission is calculated for each day when the financial market is open.
But some brokers offer a free commission on their account types. Forex brokers also offer free swap accounts for Muslim (Islamic) users to trade without any commission charged.
When you register on a forex broker, first you need to choose the account type of trading. There are different account types such as Standard, Razor, Raw, Cent account, etc. Each account has something that’s not available on the other account type. For example, some account types have smaller leverage allowed to trade than the other account.
Account types vary also on the minimum and maximum lot size allowed. You can have a limitation in the deposits too. For example, some account types require a smaller amount to deposit than the other accounts.
There are account types that don’t offer the same trading platform. Spreads can vary on account types, as there can be low spreads, higher spreads, or no spreads for some account types. The most common account type on forex trading is the Standard account.
Trading the forex market requires platforms so you can trade and analyze the forex market. The trading platforms can help you do technical analysis on the trading platform and find setups to trade the foreign currency market. You can open a demo account on forex trading platforms to practice trading.
The most popular forex trading platforms are MetaTrader 4, MetaTrader 5, cTrader, WebTrader, etc. Not all the trading platforms are available to trade on all account types, so make sure to check if the trading platform you need, is available for your account type.
Deposit & Withdrawal
Before you start trading on a real account, first you need to deposit money. But deposing money can be not easy for all users. Some of the supported payment methods to deposit cannot be used as withdrawal methods. For example, if you deposit money on your trading account through Credit Card, then you need to use a different payment method for withdrawal.
Some brokers offer only payment methods to deposit and withdraw through cryptocurrency. And to trade with that broker, you need to use a crypto payment method and if you don’t have one then you need to create one. By creating a crypto wallet account, you may need to pay fees to buy crypto with your debit/credit card or bank account.
Also, some brokers have limitations on deposit and withdrawal amounts too. If a broker requires a minimum deposit of $100 to deposit, and you don’t have that amount to deposit, then you may look for other brokers.
The last tip but that can be important in choosing your broker is to choose a forex broker with a good reputation. Before you register with a forex broker, first you need to “analyze” the broker. With analyzation, we mean that you need to see the reviews from past clients. Reviews can be found online from different websites and can help you get a quick view of the broker’s reputation.
Some sketchy forex brokers that are not regulated try to “fool” victims by faking their reputation. They make reviews from themselves to increase the reputation of the broker’s. By doing this, they can get more clients and scam more people.
So you should always verify if the website, where reviews are posted, is legit or not.
Summary of the right forex broker
Hopefully, with the details we showed, you would be able to find a broker that fits your requirements. As we mentioned, as a forex trader it’s important to make sure you use a regulated broker.
The best forex broker that you’ll choose can offer you customer support 24/7. Finding a trusted forex broker with low spreads on forex currency exchange rates is one of the most important factors in forex trading.
Below we have listed a licensed broker that’s available for users from Europe, Asia, Africa, Australia, Canda.
AxiTrader broker is an old and reputable broker that operates since 2007. It offers low spreads, low commission, and swap-free accounts. Multiple payment methods, advanced trading platforms, and more.