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Forex brokers are companies that allow clients to trade currency on the foreign exchange market. They are usually online-based, with some exceptions being financial institutions or private currency traders.
Since currency values change all the time, it is possible to earn money by speculating on these changes using currencies as collateral – this is how currency trading comes about. According to Bloomberg Businessweek, currency markets have surpassed stock markets in terms of the daily volume of transactions, so there’s no surprise so many people want to try their hand at forex trading.
Brokers play a vital role in facilitating the entry of new players into the currency trading field by allowing them access to real-time price feeds, charting tools, technical analysis research, education support, trading platforms and other tools that help new traders develop the skills needed to be successful.
Traders should consider the following criteria before shortlisting a particular forex broker:
Regulation and Regulatory Bodies
Always check the country where the broker is licensed for operation since this plays a vital role in understanding the safety of funds and assets involved in trading deals. The authority you trust must be authorized by your primary financial regulator like FCA (Financial Conduct Authority) or ASIC (Australian Securities and Investments Commission).
Some of the forex brokers are regulated by central banks, while local finance authorities regulate some. The company should have clear-cut policies towards financial ethics and moral code. Good customer service is also a significant factor since you would need assistance with your choice of currency trading platform or account management at some point in time.
The next thing would be documentation – does the broker require original copies of documents? It is no use opening an account with a broker whose banking system can’t accept photocopies or scans of certain key documents such as passports and bank statements. You wouldn’t want things held up because you couldn’t provide a specific document to the broker.
The next is transparency in pricing. As a trader, you would want to know how much the cost of your transaction is and, if possible, compare costs between brokers. The actual rate at which you transact can be affected by several things, including membership fees, transaction fees and even withdrawal fees.
Brokers must provide a modern and user-friendly trading platform with efficient charting tools, an economic calendar of the market, the latest news, analysis of currencies that can be traded instantly depending upon the availability of market data. Therefore shortlist those brokers who support new innovative technology plus multiple instruments to bet on.
Customer Support Services
Beware of brokers who claim to offer 24×7 customer services but fail to answer your queries satisfactorily. Good forex brokers will have the best customer care service providing fast response time on all essential trading accounts. You can access the calibre of individual staff members acting as your representative through this quality control indicator.
The last bit would be the payment methods supported by your chosen forex brokerage. What types of credit cards/eWallets/bank transfer options do they allow? You wouldn’t want to sign up with a company that doesn’t work with your chosen payment method and then find yourself stuck when it comes time for withdrawal because you don’t have another preferred option.
No one wants to be trapped with a bad broker, especially when trading in the currency market, which is of high risk. So, the more information you will find about reputed companies, the better it will be for your investment decisions. Forexcube is a platform where investors can search for the best forex broker in Singapore within minutes after going through an extensive research process carried out by financial advisors. We recommend using a reputable online broker from Saxo Bank and trading on their forex trading demo account before investing real money.