Regulation and Licenses
Forex regulation and licenses are perhaps the most important thing that you should look for when choosing a broker as these provide a clear evidence good reputation and trading practices. There are different regulating bodies around the world like the Australian Securities and Investments Commission (ASIC) in Australia and the Financial Conduct Authority (FCA) which takes care of Forex regulation in UK. Some brokers are registered and licensed under different regulating authorities, especially if they do business in more than one country.
When you open an account with a broker, you will be required to submit a variety of personal and financial information and at the same time deposit money to fund your account. With that in mind, it’s no wonder that unscrupulous individuals and hackers dream of someday penetrating brokerage websites. Thus, choose only brokers who have a reputation for solid internet security (yes, there were brokers that have been hacked before) to keep your data and money from being stolen. Many brokers under forex regulation usually have excellent internet security protocols in place.
Spreads, Commissions, and Fees
Brokers make their money through spreads, commissions, and fees. At first glance, the meager amount they charge may seem insignificant, but over time, these costs add up and compound. The higher the charges, the less money you are able to pocket—so it goes without saying that you’ll be better off with brokers who charge minimal fees and offer tight spreads. Be careful though since some brokers often compromise on the quality of their services in order to compensate for their low charges.
Excellent customer service is important whether you are a novice or seasoned trader. In the event that you encounter issues with your trading account—from funding your account to glitches in the trading platform you are using and everything else in between—you’ll want a helpful support staff to be within reach. Some Forex brokers offer phone support, live chat, or email correspondence. Whatever the medium, be sure to choose a broker who is friendly and reliable. You can do this by reading forex trading reviews or forums or by talking to one of their representatives prior to opening your account.
Some Forex brokers offer additional services in order to attract more traders. These may be in the form of trading signals, free webinars or learning resources, or even technical and fundamental analyses. In many cases, the information you get from these value-added services can help greatly in improving your trading knowledge and skills, so try to look for brokers who offer them. You can do so by visiting their website, talking to their support staff or reading forex trading reviews and forums.
Take note though that this is not the be-all and end-all criteria of a good forex broker. However, forex brokers who do meet the above list is often a good and safe choice.