The foreign exchange or forex market is the largest financial market in the world. The market operates 24/7 due to the time zone changes and forex rates keeps fluctuating. Forex market does not have any centralized market place but consists of players like Central banks of different countries, large financial institutions, large corporation and a number of forex brokers.
Small investors should select a forex broker to trade in foreign exchange markets. Owing to the presence of large number of brokers, it is difficult to choose the right one. However, a little bit or homework and exercising caution will help you to choose the right broker who offers competitive currency exchange rates.
Here are 4 important factors to consider while choosing a forex broker
- Regulatory Compliance
Forex is a very volatile market and it is very important to choose a broker with proper regulatory compliance. This will ensure that your money is safe even during troubled times. Choose a broker who is registered with the FINTRAC, a Government of Canada Agency to regulate brokers and protect investors from manipulation, fraud and faulty services. Choosing a FINTRAC regulated broker will help you to ensure the safety of your money deposits.
- Account Offerings
Forex is a very competitive market and each broker has different account offerings such as leverage and margin, commission and spread, initial deposits etc. Compare the rates charged by different brokers and choose a trusted brokers who offers competitive rates. While considering these financial details also know about the ease of depositing and withdrawing money.
- Currency pairs Traded
You can trade in many currency pairs, but only a few of them, which offer high liquidity are popular among the brokers and small traders. Enquire about the currency pairs offered by the forex broker and their currency exchange rates. Choose a reliable broker who offers trading in the pairs you are interested.
Forex markets are open 24 hours a day throughout the week. A broker should offer customer support at any time. They should be able to speak to you to clear any queries regarding spreads, commissions, leverages etc.
There are many other considerations such as strategy builders, customization options given by the broker, free demo accounts etc.
Choosing the right forex broker goes a long way to ensure that your money is safe and you have help at hand when needed. The broker should offer better currency exchange rates and 24/7 customer service. Choose a trusted and reputed broker with positive reviews from clients.