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How to Choose a Forex Broker

Bym Abdullah

Jun 29, 2020
How to Choose a Forex Broker

How to Choose a Forex Broker

Most investors trading in the stock markets and Forex are using an intermediary in their work. A broker is a person or company that buys and sells shares according to the investor’s wishes. Brokers earn money by collecting commissions or fees in exchange for their services.

You must verify that the broker you choose is registered with the FCM and the CFTC in order to protect you from fraud and abusive business practices. A Forex broker also has to be associated with a financial institution as a bank in order to provide him with the funds needed to trade the margin. Choosing the right forex broker will take some time and effort on your part. There are also intermediaries who get fixed fees while others receive commissions. It may be a good idea to talk to your friends and business associates about their intermediaries. You can get some good referrals as you should be sure to identify those who should stay away from them.

If you are thinking about investing on the Internet, you can choose a number of Internet brokers and connect with their help desks. This method will enable you to know how fast they are in answering the questions and queries of their customers, which will be revealing to the extent of their competence. If you do not get a quick response and a satisfactory answer to your questions, you will definitely not be trusted when working with them. Also you should be aware that in some types of business, pre-sales services are better than after sales.

Before selecting an Internet broker you should get a copy of their trading platform on the Internet. This will allow you to identify the features they offer and whether their trading software can be trusted and relied on? Do they offer automated trading? Are there additional features for the trading program to be charged?

Before you create an account with a forex broker you should do an in-depth search. How fast are these intermediaries in executing purchase orders? What is their policy regarding price skipping? What is the transaction fee? What is the spread they will receive and whether it is fixed or variable? What are margin requirements and how do I calculate them? Does the margin vary according to the currency in circulation? Does the situation remain constant in both mini accounts and standard accounts?

Do not forget to inquire about balances of mini accounts and interest payments on accounts. In any case, you should make sure you put your money in a safe place.

Are binary options mediators or charlatans just just middlemen?

In this article, we will address the other side of the argument we raised in our previous topic entitled “Choosing the Right Forex Broker”. This article focused on the misbehavior of forex brokers as well as whether we have the right to blame these companies or are our expectations simply unrealistic?

Is it common to blame the forex broker?

There are a few sites on the Internet (and our website among them) that give you the opportunity to review trading intermediaries, although there is a growing tendency to talk about the negative content of such services. What we mean here is that there are far more negative evaluations than those that speak positively. There may be several reasons for this: there is a tendency to jump on a negative rating vehicle, especially if you have lost your money in this market. So you originally have negative feelings about this. It may also be wise to consider the fact that human nature seems more inclined to negative; For example, when you review the news, can you compare negative news stories with those positive ones? Is this because bad things happen a lot or do we find such stories more “entertaining” than others? We believe that the bulk of the “attacking” mediators is in addition to the fact that there are already a large number of bad intermediaries who are actually more than “positive” but we believe that some of these reviews are not entirely fair because our expectations seem unrealistic in the first place. Let’s take a look and evaluate some common complaints.

Price slide

The price slide is the difference between the price you set to execute your trading order (if the stop order is used), the price you attempted to execute (in the case of pending market orders) and the price actually executed. It should be noted that stop loss orders or entry suspensions become market orders once they are activated. Also, once you touch the specified price, they do not protect you from slipping the price. This is one of the most common complaints against brokers who are accused by angry traders of turning them from potential winners to losers or transforming their small losses into a huge one.

Loss is generally an unpleasant experience even when you are at your best. So if you have a feeling that your broker is the cause of this loss or increase its size, then you must direct your anger in this case towards it. (Note: The role of psychic trade and emotion management comes here). This may be a reason to indicate your need to review your expectations and then put any complaints in context.

Slippage in general remains associated with periods characterized by either large market volatility or even times when volatility is at its lowest. Also, the volume of your trading orders is an additional component in this subject. It is common that the most volatile times in the forex markets are during the major economic events and news. It is no coincidence that this is the same as the time when traders experience the greatest amount of price skips. This is due to the fact that the economic issues result in a huge demand for trading as everyone in the market accelerates to open trading centers at the same time.

These traders who are active at such times may understand that a few points from here and a few points from there will make all the difference in closing today’s trades win or lose. The wrong mobilization may be enough to make teams, and when you suffer from one of them it is normal to blame your mediator for being too slow or because he considers it not safe after the confiscation of your money for his account according to your perception. However, the fact that one can not ignore the fact that slippage in times of important news is very common and in some cases can be said to be impractical to avoid but better to blame your broker, there are a number of steps that can be taken to reduce or even eliminate Wrong implementation prices such as:

Be alert to the times you are trading: If you are not a news trader it would be better to avoid the times when news releases are awaited by the market with great interest. By doing so, you will avoid trading in times of high volatility and thus greatly reduce the chances of facing a price slide. If you are trading on news, there are some precautionary steps you can take (see below).

Entry with Pending Orders: The pending order will be executed at a specified price and then it will completely eliminate the price slide. However, conventional pending orders can only be placed above or below the current market price which requires entry with one of the price corrections. This quality is one of the relatively advanced trading techniques and therefore requires an appropriate degree of expertise. On the other hand, the pending order will only solve the problem of slipping while entering the market, but it will not eliminate the possibility of slip in the case of exit or close the deal manually, either to reduce losses or take your profits without relying on fixed goals.

Entry after the initial rise: the initial movement following the release of important data often bursts into the situation and creates a so-called “jump” in prices. If you are waiting for the end of this stage and then give the opportunity to the market to digest news or data exported, in this case you avoid the main body of market fluctuations. This gives you enough time to plan your trade based on the end result of the exported data and you may be able to capture one of the price corrections through which a pending entry can be executed.

Choose your own broker according to the following: If you are dealing with a broker who has a trading room, in this case you (theoretically) are more likely to face more 
price slippage

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