With a daily turnover that easily exceeds $4 trillion, the forex market is the world’s largest market. However, there is no central exchange for it, even though it is the largest market in the world. Consequently, to help them execute a trade, forex traders have to rely on a forex broker ‘s services. That is why choosing the best trading partner for you is so important. So when choosing a broker, what do you need to consider?

Forex Brokers for Beginners

Without fully understanding why, a forex starter can make expensive errors. It is best to start with a demo account, research and refine your strategy in order to protect yourself, and do a lot of testing before financing your account with real money. Consider starting with one of these top brokers for beginners to avoid losses.

Remember, your forex broker wants to help you succeed so that you can return and trade over and over again. However, many brokers find customers losing more than they make. Many brokers share what percent of traders earn a profit on their platforms , especially those regulated in the United Kingdom. As you begin with any new broker and trading plan, look out for that statistic.

Regulatory Oversight

Before everything else, when looking for a trusted and reliable broker, the first thing every beginner trader must check is to see if the broker is regulated. Since the forex market is an unregulated market, having a regulated forex broker ensures that the broker works with transparency and fairness. It is important to note that a forex broker’s regulatory oversight is only applicable to the jurisdiction under which the broker is based. A forex broker is required to be a member of the National Futures Association (NFA) in the United States , for instance, and to be registered with the US Commodity Futures Trading Commission ( CFTC). They are required to be registered with the Financial Conduct Authority ( FCA) for forex brokers who are based in the UK. The main functions of these regulatory agencies are to protect investors ‘ interests and to develop rules that dictate how forex brokers should conduct their operations.

Most importantly, regulatory agencies are constantly monitoring the behavior of brokers within their jurisdictions in order to avoid any kind of abusive practices, fraud and manipulation by brokers. These regulatory agencies help to promote competition and instil confidence in the forex market by doing so. So before you decide to open a forex broker trading account, make sure one of the regulatory agencies listed below regulates it:

Finally, many regulators offer an investor compensation scheme that, should the broker become insolvent and become overly exposed to the markets, protects investor deposits up to a certain level.

The Forex Platform / Software

The next thing in a beginner forex broker that you have to evaluate is their trading platform or software. The trading platform is the gateway for the trader to the forex market, so you must ensure that the trading platform is reliable and simple to use. It must also have a wide range of trading instruments that you can use to assist in market analysis. Clear charts, a streaming news source and even an economic calendar, offering upcoming economic events, are the most useful tools for beginners. Furthermore, you must also ensure that trade entries and exits can be made easily. This means that, with all the features clearly labelled and strategically placed, the interface of the trading platform must be well designed.

In fact, a trading platform with a poorly designed user interface can impede trading, leading to costly errors. For instance, a poorly designed trading platform can cause you to add to a position rather than close a position. Or if you really intended to go short, it can cause you to go long on a position. All these errors will just cause you more frustration at the end of the day and drain you emotionally. Make sure you have a reliable trading platform provided by the broker, such as the Meta Trader 4 platform or the Sitix Web Trader. It is also essential to know, as a beginner trader, that brokers usually offer mobile versions of their platforms. When you are on the go, this is great, as you never need to lose trading opportunities.

Commissions & Spreads

All forex brokers make their cash through the commissions or spreads that their customers charge. The commission is usually a fixed amount per lot traded, or a percentage of the total volume traded, for commission based trades. The forex broker generally marks up a few pips in the difference between the Bid and Ask price for spread-based trades. It should be noted that the spread can be fixed or floating. A broker may specify that the spread for the EUR / USD currency pair is 2 pips for fixed spreads, for example. With floating spreads, the spread payable depends on the volatility of the market.

Take note that the broader the spread, the harder it is for you to make a profit. However, as compared to less frequently traded currency pairs, frequently traded currency pairs such as EUR / USD or USD / JPY often have a very tight spread.

Account Types

All leading forex brokers offer their customers a selection of trading accounts from which their customers can choose. Typically, these accounts are differentiated by the advantages they offer to the account holder, but they vary between different brokers. A micro or mini account, for example, that allows a trader to trade in an amount that is less than a standard lot, typically has a low minimum deposit requirement. These trading accounts are designed for and have higher leverage for beginner traders. But higher spreads also often come with them. Sometimes, the broker might limit the number of currency pairs that a micro or mini account can trade with a trader.

Trading accounts can also vary according to the kind of spreads to be paid by a trader. There are fixed spreads for some trading accounts, while others have variable spreads. Or they may also be trading accounts based on commissions. Typically, ECN type accounts are trading accounts that are geared towards experienced traders that allow the account to access the raw spreads provided by the liquidity providers.

Deposits and Withdrawals

The deposit and withdrawal methods supported by the broker are another factor that you must take into account when evaluating the various types of trading accounts. In the industry, every forex broker has its own policies on how they handle deposits and withdrawals. Some brokers may require direct bank deposits from their customers to fund their trading accounts, while others may be more flexible and support a variety of payment methods. Regardless of the supported payment methods, always choose a broker that can provide you with a convenient and inexpensive payment method.

Customer Service

A 24-hour market for the forex industry where trading activity never ceases. Because of this, it is possible for a forex trader to continuously trade in the market. This means that you can encounter an issue that at any time requires the assistance of the customer support team. Therefore, it is important that support services are available 24 hours a day throughout the entire trading week, as there is nothing more frustrating than being unable to get help when you need it most.

Check the methods that are available for contacting the support team, for example. Live chat, phone numbers localized, email. Additionally, review the customer support representative’s response time. Whether the broker has provided you with a localized or toll free telephone support number is another often overlooked factor when reviewing a broker’s customer support service. The reason is fairly obvious as you can easily build up the telephone charges you rake up when calling the support lines up to a significant am