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How To Choose A Forex Broker
Brokers are crucial to the trading process. They take care of so many things: from helping you set up your account and learn about Forex trading to guide you along the way and assist you with becoming successful. The problem is - there are a lot of brokers out there and sometimes it can be challenging deciding which one to go with. Today we will discuss how to choose a Forex broker that suits you best as well as cover the opportunity to become a broker yourself.
The best Forex broker
Brokers are service providers for all Forex traders around the world. Through a broker you can deposit and withdraw money, learn about the technicalities of currency trading, open accounts that fit your requirements and more. It is very obvious that with the popularity of foreign currency trading altogether, the amount of broker companies has grown tremendously.
The question is: how do we find a genuine broker? And how do we define the best Forex broker?
Truth is, all traders have individual preferences and styles when it comes to trading on Forex. For some currency trading is just a hobby, while for others it is a full-time commitment. Some traders come from professional backgrounds that were somewhat related to the world of international finance, such as banking or accounting, while some have zero clue about economics and trading. But does this mean that all of these need a broker that will cater to them specifically?
Surprisingly - no. The best Forex broker is the one, who is capable of meeting and exceeding the expectations of all clients, disregarding their level of expertise, financial capabilities and trading style preferences. This means that when you find a trustworthy Forex broker in the beginning of your journey you will most likely stay with them.
In order to accomplish that, let’s talk about some key characteristics and qualities a broker has to offer to be considered the best. Here is how to choose a Forex broker checklist that you can use to evaluate your current broker or select a new one:
Amount of available learning materials. Good brokers care. They care if you are successful, and they do whatever is in their power to help you along the way. This will include a variety of learning materials, including: articles, courses, videos, analysis reports, dictionaries, manuals and so on. Their job is to provide you with as much material as possible and your job is to soak it all in to the maximum. If you are feeling skeptical about the importance of learning how to trade - go ahead and open a random trade, then close it randomly and see where it takes you. Chances are very high that you will end up losing everything you risked. For a complete experiment, follow the guessing game by a well thought-through set up, preferably based on one of the effective trading strategies and compare the results.
Selection of services. We have already mentioned that good brokers cater to all kinds of traders. This also means that they will have an appropriate set of tools and services to offer. It goes without saying, that the broker will need to offer you to choose an account type that suits your needs the most and assist you with installing all the necessary trading-related software.
Top-notch tools. Speaking of software, it is also important to note that the option offered by the broker has to live up to certain expectations. Some brokers claim to have a better spot at the market due to the invention of their own platform, but in reality it either results in poor programming or faulty functionality. The best Forex brokers know that the quality of the trading tools comes before anything. More often than not, the central trading program - a trading platform, will be Metatrader 4. Metatrader 4, also often abbreviated as MT4, has earned its place under the spotlight for two very important reasons: it is highly effective and extremely user-friendly. Some software pieces are very basic and can even be used by school kids and some are very technical and target a very narrow niche of users. Metatrader 4 is both. It can be equally successfully used by novice traders and by professionals.
Team of experts. From time to time you will need to get a technical issue resolved or a question to be answered. For those cases a broker will have an experienced support team to address any concern or query. On top of the professionalism, the broker’s team should also ideally include several trading experts who have practical experience of trading currency. It could be market analysts, economists, part-time traders and more - anyone who has an insight on how Forex market operates and how to deal with every particular situation.
Reasonable charges. It is no secret that broker is a job and just like any job it needs to be paid for. As a trader you will be subjected to several fees, that will partially make the trading process happen at the first place and partially compensate your broker for their work. Some of these charges will include spreads, a difference between the bid and the ask prices for every currency pair, swaps - an interest on holding a trade open overnight and others. While those charges are inevitable, there are some things you can do to keep them to the minimum, such as minimizing the amount of trades that are carried overnight, choosing account types with better conditions and trading selected currency pairs that offer lower spreads. Plus, keep in mind that a legitimate Forex broker will also offer some things for free, like demo accounts, educational courses, deposits and withdrawals from an account.
As we have gone through some of the major characteristics of the best Forex broker, it is only fair that we pay attention to one very frequently asked question - how to be a Forex broker?
How to be a Forex broker
To keep this to the point, we will try to outline how to be a Forex broker without going into too much detail. One thing you will need to know right away if you are considering becoming a broker is that it is going to be very expensive.
Broker companies start by paying a lot of fees from the very beginning - to get the proper licensing, to gather a team of professionals, to rent offices and to buy a licensed copy of a trading platform. The latter can go well over that $100,000 mark and it is very obvious that not everyone is capable of spending this much on a copy of software.
Additionally, being a broker is a very time and energy consuming process, simply due to the amount of competition. You will need a decent amount of time to build a client base large enough to keep the project afloat and in the meanwhile you are guaranteed to be paying more than making.
But the good news is that being a broker is not the only way to make money off Forex without actually trading. Let’s wrap up today's discussion with advice on how to start a Forex business, without becoming a broker.
How to start a Forex business
The best way to profit off Forex without trading is by participating in one of the affiliate programs, offered by the broker. Affiliates can vary in names and specific tasks, but their main concern will be to grow their broker’s client base for a reward. This partnership can take various shapes and forms - from writing simple posts on your social media channel to building an elaborate network of websites and campaigns to attract a higher number of potential customers.
Bottom line is - there are multiple ways to profit off Forex and some of them don’t even involve trading. The only thing you should make sure of prior to diving right in is that the path you are about to take suits you ideally and you will do everything that is required to effectively follow through.
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