There are many Forex brokers on the market, thanks to the fact the interest in the retail Forex market is growing rapidly in recent years.
All industry has made great progress in technology, available solutions, approach to customers, as well as the safety and quality of services. Currently, many brokers are working in the STP or ECN technology providing prices directly from the interbank market. Spreads, fees and requirements on the size of deposit in recent years have drastically reduced due to increased competition in the industry. Brokers allow trading at market prices with low commissions already few dozen dollars deposit needed. Few years ago, STP and ECN accounts were available from 500 USD, depending on the broker.
A major improvement was done in the field of legal and financial regulations, control of brokers activities, as well as the possibility of asserting their rights and traders awareness about legal situation. Price or position manipulation is really rare now, however it was happening few years back, and investors are very strict about these kind of cases and they fight for their rights. American financial supervision institution recently realized the need to extend the retail Forex market supervision and with the help of some procedures it led to huge penalties, thanks to that American brokers are among the most fair in the world. Similar British FCA (formerly FSA) is closely following the actions of brokers registered in UK. Many brokers from the EU, due to tax regulations, also has its headquarters in Cyprus under the supervision of the CySEC. Before selecting a broker, you should look carefully at what regulations apply to it on the basis of what rules and what permits it works. This is very important in terms of security of investments and funds entrusted to the broker. The market is difficult opponent on its own. It is not worth worsen your position by selecting an unreliable partner.
Foreign Forex broker
Many people choose brokers from overseas tax havens, without appropriate permission, sometimes only registered as exchange office or only notified by the relevant authorities, because the broker is cheaper – has lower fees and better conditions. You can have doubts about the manner in which this type of broker holds and uses our resources and the quality of guarantee we have in case of falling. Therefore, if we want to invest significant assets, you should consider choosing European (ie. The British or Cyprus) or American broker rather than a unidentified company of unknown reputation from the Virgin Islands, Tora Bora or Tortuga.
Another important factor are reviews of broker customers – whether the broker pays the money, or quickly account deposits, if on normal basis there are no problems with the operation and execution of our orders, and when a problem arises, how the broker solves this situation. These opinions can be found on many Forex forums. Overall customer satisfaction is important because it gives us a chance that we would also be happy.
Different brokers have different features and different technology providers. For example it can happen that the broker who has excellent conditions relating to transaction costs, in practice it has a lame execution of orders, which realize with delays in time and pricing, has frequent disconnections and gaps in quotations, and perhaps even repeated failures of servers and delays in the payment of funds. Reading the table only with broker advantages, we can easily come across this type of mine trap and have a lot of stress before we decide to get away from such broker.
The third element of the process of selecting a broker, the most common of which all begin, is account characteristic. They include information about the types of accounts available, accessible instruments, spreads, commissions, minimum deposits, platforms, bonuses, additional conditions and characteristics (eg. speed of execution), etc. The fact that this characteristic was placed in third place, does not mean that it is unimportant. Transaction costs are a very important part of our trading.
It may happen that costs significantly deep our loss, or that will significantly reduce profits. This applies especially to people who often place orders and catch short movements (scalpers). Therefore, after taking into consideration the safety of our resources and reliability of our partner, you should seek the best possible offer accounts tailored to our needs.
Forex brokers offer
Currently, brokers offer is very rich. Practically every broker has at least two types of accounts, while those larger have several of them with a variety of different products. Accounts often differ in basic characteristics so that each investor can individually adjust the account to meet your needs. For example there are accounts for micro-investors with a small deposit – where the minimum first payment amounts are little more than protect the smallest position (approx. $5).
Such accounts have low requirements, but also charges may be slightly increased in relation more advanced accounts. For investors with a larger assets the best are STP accounts with market prices and separately calculated commission. They have higher demands on the deposit.
Different types of accounts usually have also different instruments. Basic accounts usually offer only the most popular instruments on the Forex market – the main currency pairs (ie. Majors). Accounts more advanced feature usually a wide range of currency pairs (including minors and exotic) as well as contracts on metals, indices and stocks.
