Forex trading is generally the first step into the financial world, but as most of the beginners, we encounter many challenges until we manage to figure out how the industry works and how we can generate returns. Choosing the right brokerage company is one of the most important decisions we must take, so today we’ll see some of the aspects that definitely need to be taken into account.
Regulation
When a broker is regulated by a trustful financial agency, it means there’s a reliable public regulator monitoring its activity. As a result, when choosing your broker, you must check how much attention is dedicated to getting regulatory approval from reputable bodies like FCA, ASIC, CySEC, and others. Regulated brokers like easyMarkets, XM, or Oanda are just a few of the examples which you can rely on, given their attention to regulation.
Spreads and swaps
No one is working for free and neither do brokerage companies. The costs of forex trading are mainly spreads and swaps, this being the second important aspect you should watch in your broker. The spread is the difference between the buying and selling price. We could have a debate on whether fixed or variable spreads are better, but the bottom line is that you need a broker offering competitive spreads.
The swap is an overnight rate that’s being calculated based on the interest rate differential between the two currencies involved in your trading pairs. Although there are some currency pairs offering positive swaps, due to ultra-low interests rates you’ll, more often than not, have to pay your broker in order to hold an open position overnight.
Trading platforms
Each trading platform comes with unique features and no matter you think MT4, MT5, or proprietary platforms are the best, you must choose a broker that has a diverse offer with this respect. You need to have at least a web, desktop, and a mobile platform, to be sure that you’ll be able to access your trading account at any time, no matter your location.
Second of all, a platform must offer a large pack of features and easy access to the markets. There are some experts who believe proprietary platforms are the best, given they are tailored towards the needs of traders, but the downside of using one is that most of them do not support Expert Advisors. It’s much better to think first about your trading style and only then decide which platforms suit your needs the best.
