Whether you’re a new retailForex broker or a veteran FX trader who needs to device new strategies, you need to minimize your risks and maximize your trading success.
Beyond learning the trading techniques,you need to find and focus on one single Forexbroker who will help you win in the marketplace. This is a very important part of your Forex trading, and you need to get it right. Those retail Forex traders that work with many different FX brokers lose a lot of time and resources because they fail to find the right broker that will help them succeed.
“But…” you ask. “How do I get the right Forex broker?” “How can I tell if a broker is legit or not?” In fact, what key features should I look for in an FX broker?”
Let’s jump right in to answer your questions.
Retail Forex traders work with many different FX brokers because they can’t find an answer to this simple question:
What’s the difference between a legitimate broker and a fraudulent one? Well, one thing is for sure: You can’t tell if a broker is legit simply because they have a fancy company name or a beautiful website.
It’s much more than that. Fake online companies invest so much money on branding and digital ads to deceive innocent traders, ripe them off of their hard-earned money. Before you trust a broker with your money, you need to do a thorough review.
You need to check their portfolio. You need to dig their history. Check whether the broker is a member of a regulatory body.
Membership of a regulatory speaks volumes about a broker’s credibility.
- If your potential broker is based in the U.S., find out if he’s a member of the National Futures Association (NFA) and Commodity Futures Trading Commission (CFTC).
- If your potential broker is based in the U.K., find out if he’s a member of the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA).
- If your potential broker is based in Switzerland, find out if he’s a member of the Swiss Federal Banking Commission (SFBC).
It doesn’t matter how long it takes you to find a credible broker. The goal is to find the one that can help you succeed without draining your savings.
“Forget about the cost,” some new traders would say. “Just focus on finding a professional broker.”
While partnering with a professional, Forex broker is essential; cost is also an important factor that retail Forex traders should consider. Some retail Forex traders work with many different FX brokers and end up at loss because they don’t consider the costs. Everything has to be well-balanced or you won’t reap the rewards of your efforts.
For instance, as a Forex trader, when you enter a trade, you know for sure that you have to pay for the spread or a commission. If you don’t work with a cost-effective broker, you’re not going to make money. And your trading days will be numbered!
To increase the life-span of your trading in the FX market, look for brokers that are cost-effective. In fact, look for innovative traders that offer other perks. “Innovative brokers will allow you to access most areas of the capital markets through a single forex account,” ConnectFX’s Gino D’Alessio says. “Some offer trades on major and minor currency pairs, commodities, precious metals, [to mention but a few].”
But that’s not enough. On top of that, you should also strive to find a broker with effective customer service.
Amateur traders might not even think of customer service when they embark on ajourneyto finding a profitable Forex broker.
Yet, Forex trading requires 24/7 customer service. Opening an FX account is not as easy as signing up on Facebook. Support from a customer care agent can help smooth out the challenges in the process.
A number of retail forex traders work with many different FX brokers in search of a trusted one. You need to work with a reliable FX trader that will walk you through the many hiccups in your trading journey.
In addition, with the growing challenges of the Web, such as the multiple numbers of scammers and Internet fraudsters, you need a competent broker with active customer care support. Remember: In October of 2015, some cybercriminals hacked the FXCM account and transfer huge sums of money. That said, it’s important to take measures (partner with FX brokers that have great customer care service) so you won’t be alone if you’re attacked.
How to Avoid a Bull Trap
There will be times when you suspect a bounce in prices but are unsure if a true rebound will take place or whether it may be a developing bull trap pattern. We never really know ahead of time, until there’s enough evidence that the rising prices appear to have some momentum behind them.
The bottom line.
Not all brokers are worth their salt. That’s why you need to invest more time to find the right one. Beyond an expensive logo, you need to analyze your potential FX broker, answer “Yes” to the following questions:
- Is the broker a member of a regulatory Forex body?
- Are they cost-effective?
- Is their customer service reliable?
Of course, answering “Yes” to all these questions requires thoroughresearch and reviews. But you’ve got to do it if you want a successful start. Because “To trade forex, you need an online broker,” expert Forex trader Steven Hatzakis says. And “Trading with a trusted forex broker is crucial for success in international currency markets.”