Today is probably the best time to put your money into the currency market. Online Forex brokers are facing severe competition with more and more beginner users eager to buy and sell currency pairs internationally. The prices are lower while the brokerage services are becoming more advanced and investor-oriented.
On the other hand, potential users expect even more from a chosen online Forex broker. Special promotions, reduced fees, a variety of traded instruments, and reduced account management costs are only a few features new traders are looking for. Here are 7 essential things to take into account when choosing the best Forex broker in 2022.
A Forex broker is a platform (a website) that acts as an intermediary between a trader and the financial market. Additionally, an online broker is responsible for delivering additional brokerage services and software as well as managing and maintaining users’ accounts in accordance with established terms and conditions.
In simpler words, investors need someone to help them place their orders. A broker is a link between investors and financial markets. It accepts orders on behalf of a user and executes buy and sell orders accordingly.
So, you have an investment plan. You have defined your Forex trading goals and approaches. You know what currency pairs you want to trade. The last stage is to find a broker that will let you bring all your plans to life.
When selecting the best Forex broker, the majority of users mainly take into account the most fundamental factors:
Most websites promise the best trading conditions and provide lots of different information. For beginners, it is often nothing but white noise. Newbies find it difficult to sort out the most crucial features from all that mess.
So, here are some major factors you need to look for.
Most beginners ignore this point. They do not want to deal with commissions at first. However, costs will eventually define how profitable your Forex trading is. Companies charge different fees and commissions. They may include transaction costs, brokerage and account management fees, etc. Sometimes these fees can be quite excessive.
Select several brokers and learn how they make money. Newbies make a common mistake and focus mainly on the price per trade instead of taking into account how much it will cost them to manage the overall portfolio.
The second step is to examine commissions on investments. It does not matter what instruments you are going to trade (ETFs, currency pairs. Stocks, or mutual funds). The main thing here is to select a broker that meets the two following requirements:
Note: each commission is linked with the specific investment or trading instrument.
Traders should be prepared to pay account fees. It is nearly impossible to avoid them. The good news is that you still have a chance to cut them down. For example, brokers can charge extra fees in case you want to withdraw cash or close your account for any reason. What’s more, there are so-called inactivity fees that apply to traders who do not enter their accounts for a specified period.
The best way to avoid these fees is to select a Forex broker that does not charge them. Another way is to move to another platform that promises to take care of migration fees and account transfer expenses.
Most beginner traders face the same problem when getting started. A lack of Forex education and an inability to keep control over their strategies leads to 90% of failures. Brokers tend to help new clients and guide them through all major obstacles on the way to placing the first order.
Additionally, a trusted online broker will provide assistance along the way. Platforms engage with their customers through regular webinars and live seminars. They provide a 24/7 support team to resolve not only strategic but also technical issues. Furthermore, new traders can access the FAQ and Education sections with all major questions answered, not to mention how-to guides, glossaries, and other resources.
Forex bonuses and promotions can also be a huge plus in favor of a chosen online broker. Generally, companies establish quite strict turnover conditions. This fact makes it hard to use bonus money as a margin or withdraw it.
On the other hand, some promotions can be a good thing to start with, as you can try out some techniques under real-market conditions without losing your own cash. Traders can look for different types of promotions. They include welcome and no-deposit bonuses, promo codes, reload and deposit bonuses, etc.
Users should look not only for great features and bonuses but also a proven track record. Companies may promise the best trading conditions but leave you with nothing to trade in the end. The best option is to opt for proven and long-running websites. It does not generally mean a newcomer cannot be a good Forex broker. On the other hand, you need to make sure it has a good online reputation.
Traders are concerned about whether to choose a broker that is primarily focused on Forex trading or the one offering a variety of instruments within a single platform. The choice will depend on your preferences. On the one hand, it is great to have numerous assets available for trading, as it will keep your portfolio diversified. On the other hand, beginners can be overwhelmed from the start. If you opt for an all-in-one solution, make sure you are not using White Label broker representatives.
Potential investors must consider different variables when selecting the best forex broker in 2022. They include various costs and fees, promotion types, functionality, and extra features that will help beginners get used to the trading process faster. But in the end, it is up to you what features to look for. Just make sure, a selected company is trusted and reliable enough.
This material does not contain and should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments. Before making any investment decisions, you should seek advice from independent financial advisors to ensure you understand the risks.