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July 14, 2018

Six Questions to Ask Your Forex Broker

Six Questions to Ask Your Forex Broker
Six Questions to Ask Your Forex Broker

We find no excuse for not to repeat that working with a reliable forex broker comes before anything else in forex trading. You may have found the holy grail and your strategy could be making thousands of bucks every month consistently. However what good is it to be if you selected a vulturous forex broker? These are the main six questions to ask your forex broker in order to distinguish a reliable forex broker from a fraud forex broker.

Is the Broker Regulated?

This should be the first and by far the most important question to ask your forex broker. Compliance with strict standards and safety of your funds come before any other affair in trading in our humble opinion and it is ensured by the strict regulation. Imagine that you have a winning trading strategy under your disposal and you are earning a decent amount of money on forex, however consider whether it really matters, if you are not going to be able to withdraw your profit from the broker.

FCA (UK), ASIC (Australia), CFTC (US) and SEC (US) are the regulators which We respect the most and We would comfortably say that any broker that are under the jurisdiction of those regulators are to be trusted. They will ensure that the broker you are trading with is not located in a tropical off-shore island where you are going to be able to reach if anything goes wrong with your account and trades.

How Long Has the Broker Been in Forex Business?

A company’s history tells a lot about its success and customer satisfaction. You know very well that a fraud company cannot stay in the business for long time. This is particularly true for forex sector. I would recommend you to look for your forex broker to operate in forex business for at least five years. Scams only survive for few years and even less if they are regulated by one of the strict regulators such as FCA, ASIC and CFTC.

Does the Broker Offer Low Spreads and Commission?

Spreads and commissions are the primary criteria for many investors when they choose a forex broker. It makes sense since traders’ goal is to earn money and lower the spread and commission higher the profit for trader. Especially for those traders whose trading strategy is based on scalping and short term trading, lower cost of trading determines the difference between a winning and losing trade. No doubt that this is crucial however it is at third place on our list because, again, how it matters if you get super low spreads from a broker but it is not regulated and you don’t know if you could withdraw your profit.

What Deposit and Withdrawal Options Does the Broker Offer?

Before you start trading and profiting on your trades, you first should deposit funds into your forex account. And in order to be able to spend your profit, you first must withdraw the funds from your account. Therefore you should ask your forex broker how easy it is to deposit and withdraw funds and what options they offer. The most common two methods for deposit and withdrawal are wire transfer and credit card. However, say you are only willing to deposit money into your account by Neteller, so you have to ask the broker if you can do it by this certain way before even sending your application and submitting your documents. Make sure they offer the methods that suit best to your preferences.

What Type of Products Does the Broker Offer?

Okay, you have been trading forex all the way till now however you have just read a report and are convinced that there is a great buy opportunity on gold. You go through your broker’s instrument list and no, gold is not there. Phew, you have just missed a potential profit dude. We are trading forex pairs most of the time but We still would like to have other instruments at hand. Not only precious metals though. Make sure that CFD indices, oil, agricultural and soft commodities are present and ready for trading on your platform.

What Trading Platforms Does the Broker Provide?

You have been trading with MetaTrader for long time and it is the only way for you to trade. Now you have signed up with a new broker just to see that they are not offering MetaTrader. Ouch, big frustration. Most of the brokers offer MetaTrader as the standard trading tool but it is not rare to see brokers developed their own platform and only providing clients with their unique trading software. If you were planning to use an EA programmed for MetaTrader, you were most likely not going to be able to do it. So it is always a good idea to ask your forex broker up front what trading software they provide.

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