Perhaps the more stressful work before doing trading is finding a reliable forex broker. Your broker should be reliable and transparent of their rules. There are some basic tips that you can follow to find out your suitable traders.
1. Find out what YOU want: Different traders need different types of brokers. For example, if you are a day trader, you might need an ECN broker. They have tight spread but you need to give them some commission. When you are trading as a day trader, your trades will have small moves. You need to think about your account size and whether the broker and lot size that matches your account.
2. Research, research and research: In the market, you’ll find many brokers. Many of them claim different guarantees. But you should never believe what you have been shown. Google your preferable brokers, compare their benefits and policies. It’s very important to have a clear idea of the broker’s policies.
3. Test with demo accounts: You can test your broker with a demo account. You can try with virtual money. While you are trading, you need to keep an eye on three things:
- Whenever you are placing an order, it should be placed instantly.
- Your spread should be as tight as possible.
- Your trading platform is stable and not crashing all the time.
You should run the test for several weeks. After that, start trading with real money but with a small amount. For example, you want to trade with $10000. But to test the broker, you should not start with more than $1000. While this process, try to talk with their customer service to know whether they are real. After that, withdraw some funds to know their withdrawal policy. These might cost you some money, but it’s worth to know whether you can easily withdraw your funds.
4. Avoid “BONUS”: Get one thing straight, nothing comes free. When a broker is saying “open $10000 and get $2000 free”, that’s actually a trap for you.
Some broker companies hide the bonus policy or create problems when you try to withdraw the funds.
So, whenever you are depositing funds, make sure you give them proper instruction that you don’t want to have any bonuses.
5. Don’t believe in online reviews every time: We often seek neutral reviews on different things online. But these reviews can be manipulated too. Find a website where you can see both positive and negative comments. These can help you to identify who are suitable brokers for you.