The worldwide forex market in 2021 is worth $2.409 quadrillion dollars. FX markets see currency exchanges worth nearly $6.6 trillion every day. It’s the biggest, most lucrative financial market in the world and the only market that’s open for trading 24/7!
If you’re interested in forex trading online, you need to have the right forex brokers by your side.
Acting as the middleman between traders and the FX markets, forex brokers use their knowledge and expertise to offer you the best forex prices. The first step to finding the best forex brokers is to identify the kind of investment you want to make and the goals you want to achieve.
When you’re searching for the best forex brokers that can handle your forex brokerage requirements, consider the following factors:
- Security features
- Transaction fees
Not all forex brokers are regulated, and working with unregulated forex brokers will put your money at risk. Depending on your location, research their status at one of the following:
- Monetary Authority of Singapore
- Australian Securities & Investments Commission
- Financial Conduct Authority
- Swiss Financial Market Supervisory Authority FINMA
- Cyprus Securities and Exchange Commission
Next, ascertain which security features are offered by the forex brokers you’ve found. These features may vary from one broker to another.
There should be robust security measures — such as segregated account, negative balance protection, and third-party insurance — in place to protect your investment.
A segregated account is a separate account used by a forex brokerage company to hold its clients’ funds. It ensures that there’s no relationship between the clients’ accounts and the company’s own bank account, eliminating any chances of misappropriation or misuse.
Negative balance protection acts as a safeguard for your forex trading account. Forex markets are highly volatile and move quickly. Even if your trades have a losing position, this facility will prevent your account from reaching a negative balance.
With third party insurance, forex brokers help keep traders’ investments safe in the event of errors, negligence, fraud, omissions, and other external events that don’t qualify as normal trading risks.
Lastly, consider the fees that you’ll be required to pay to your exchange broker on your transactions. Ensure that there are no hidden charges and all the costs are disclosed up front.
Account minimums are also a factor that depends on the forex brokers and their business.
Some may require you to maintain a high balance in your account at all times. However, some forex brokers may have more relaxed requirements, and you might even find exchange brokers with no minimum balance requirements at all.
Have all the information ready before you proceed to open an account with a forex brokerage firm.
If you have no prior experience of forex trading online, you might want to look for forex brokers that offer demo or practice accounts. Such accounts allow you to practice what you’ve learned and figure out how forex traders do what they do before you start trading in the FX markets with real money.
Remember that the right forex brokers will offer you sound advice about your currency trades and the best possible prices for forex trading online. Beware of exchange brokers who try to rush you into trades or refuse to listen to your input.
As the final step before opening an account with an exchange broker and entering the FX markets, check the reputation of the forex brokers you’ve selected.
Consider reading up on them online, looking for any positive or negative news coverage they might have received, contacting some of their other clients and asking for reviews, etc.
As a new forex trader about to engage in forex trading online for the first time, doing your due diligence about forex brokers is one of the keys to success in the FX markets. For more advice and market news on forex trading online, get in touch with the experts at Forex Trading Asia today!