Forex brokers provide ordinary traders with access to the world market, so a modern specialist can not do without the support of a competent intermediary. Choosing a professional company becomes a real test for a novice trader, because in the network you can find a huge number of profitable offers. In order to guide the newcomer and simplify his task, today we will briefly talk about brokerage and provide a list of the most important criteria for selecting an intermediary company.
How do Forex Brokers Work?
Forex is an over-the-counter market where regular buying and selling of currencies takes place. Local intermediaries provide players with access to real-time quotes, special software and leverage. Trading on the exchange through a broker is fraught with many difficulties, however this is the only way to gain access to the global platform.
An agreement is usually concluded between the intermediary and the client, presented in the form of a public offer. This document clearly regulates the rights and obligations of the parties, so that traders get the opportunity to carry out profitable operations on a global platform. At the moment, traders can trade not only currencies, but also contracts for price differences, stock indices, stocks, energy, commodities, metals and other assets.
The income of honest intermediary firms is made up of commission charges, however, there are also such companies that are enriched by deceiving customers. It is worth paying special attention to the method of making a profit, because the true intentions of employees of the organization often depend on it.
Each country has its own system of regulating brokers, so a resident should take an interest in local legislation and take into account the procedure for issuing licenses during the selection of a company. Regulators set their requirements for working conditions, under which they provide a brokerage company with an official license. If the corporation refuses to pass the audit or violates the law, then the controller is likely to terminate supervision. Thus, honest intermediary firms work exclusively with official licenses.
5 Main Criteria for Forex Broker Selection
Trading through a broker can bring good money, but only if you have a competent approach to choosing an organization. To ensure the most safe and comfortable work for himself, the trader should pay special attention to the following criteria that Forex brokers have:
- Having a demo account will be an important plus. If the company provides customers with the opportunity to test their strength in test trading, then it provides good service, and is likely to count on long-term cooperation.
- Trading conditions can be found on the web resource of the intermediary. Pay attention to the size of commission deductions, payment for replenishment of a deposit or withdrawal of income. Determine the range of available assets and strategies that the client can use during trading on the global platform.
- Duration of work in the global market. As a rule, fraudulent companies quickly fall for crimes and stop working, while bona fide intermediaries have been operating for years. The most reliable Forex brokers are organizations operating on the marketplace for more than 3-5 years.
- The presence of an official license from a reliable regulator with a worldwide reputation. If the intermediary has special documents, then he is under the supervision of a responsible controller. If you have any controversial issues or legal issues, the client can always count on help from the regulatory authorities. In the absence of licenses, the trader will lose finances in case of fraud by the brokerage company.
- Reviews in specialized forums or in independent online publications. If the opinion of past clients about the company is mostly negative, then working at Forex through a broker exposes the player to additional risks. It is recommended to look for a company whose customers are satisfied with the services provided.
By analyzing all the above parameters that Forex brokers have, a person will be able to make an informed decision about choosing a reliable and professional intermediary!