5 Tips to Find Your Next Forex Broker
Every investor cares about earning a profit; but before you decide which currencies, cryptos or stocks to invest in, you’ll need to choose an online broker, and choose well.
In the recent past, new online brokers have built large customer bases, often challenging more traditional brokers. But how should you choose amongst the best UK Forex brokers? Here are 5 tips to help you find a broker that, we hope, will exceed your expectations.
Broker’s educational offering
Choose a broker that offers excellent customer service and comprehensive educational material if you are new to trading and are looking to build your skills.
Educational material comes in many forms and typically includes articles, videos, ebooks and webinars. Webinars are an opportunity to learn from experienced traders as they talk through technical analysis, fundamental analysis or even live market commentary.
Some brokers will also offer one-on-one trading sessions or add you to a VIP tier when you deposit large amounts. If you are looking to make a large initial deposit, typically in excess of $10,000, it is worth asking your prospective broker whether you’d qualify for such perks.
It’s always a good idea to check your prospective broker’s credentials on review sites like TrustPilot.com. Take a look at the overall rating, as well as at recent comments. I like to filter comments on 4-star and 2-star reviews, because I find they are usually more balanced than reviews at either end of the spectrum. In contrast, 5-star and 1-star reviews are more susceptible to fraud by the broker itself, or competitors.
Once you’ve read customer reviews, take time to verify your prospective broker’s regulatory credentials. For example, let’s imagine that you’re an Australian trader keen to open an account with AvaTrade. In Australia, I can tell from AvaTrade’s website that its Australian entity is registered with ASIC, the Australian Securities & Investments Commission. A search through ASIC’s register at https://asic.gov.au confirms that its registration is valid.
Broker’s availability and accessibility
Check how accessible your prospective broker’s website and mobile application are at different times of the day, especially during peak trading hours. Clearly, the last thing you want is for their services to freeze or go offline when you need them the most. You’ll might be surprised to learn that this has occurred to Robinhood, Binance and Coinbase.
You could check their availability yourself, but there’s a better way: use a website uptime monitoring service to check availability throughout the day, and summarise its findings in a report. Some uptime monitoring services are free.
Ability to trade from anywhere at any time
Look for ways to contact the broker anywhere and at any time, should the need arise, as you may not always be sitting behind your computer. Check how easy it is to contact your broker, by phone or instant message. Some brokers will funnel you through an online ticketing service and take days to respond, which is far from ideal.
On a related note, open a demo account to test-drive your prospective broker’s website and mobile trading app. Nowadays, your broker’s app should match, if not exceed, what you can do online through a web browser. Check that you are easily able to open and close trades on the go, and that other account management tools (such as deposits and withdrawals) are readily available.
Look beyond fees
You may be drawn towards a broker with higher than average fees, because they have a strong brand or you expect a better service. This is often the case with banks or established brokers.
However, trading fees and other account management charges can set you back significantly. Remember that every cent you pay is a fee you’ll need to earn back through another leg up in the market, merely to break even. The higher the fees, the higher the bar for actually generating a profit. Your broker is the only one that profits, whether you make or lose money.
That’s why it’s a good idea to look beyond fees alone, and consider the quality of the service you’ll receive. This includes customer service interactions, the platform’s availability as well as the breadth of services you’ll receive.