Criteria for Evaluating A Prestigious Forex Broker

Confidence level

For peace of mind depositing thousands of dollars, perhaps checking the reliability of the best forex brokers is the first and foremost thing to do. To prevent brokers from cheating, there are trusted regulators around the world.

Here is a list of countries with their respective regulatory bodies:

  • United States: National Commodity Futures Association (NFA) and Commodity Futures Trading Commission (CFTC)
  • United Kingdom: Financial Conduct Authority (FCA) and Privacy Regulatory Authority (PRA)
  • Australia: Australian Securities and Investment Commission (ASIC)
  • Switzerland – Switzerland: Swiss Federal Banking Commission (SFBC)
  • Germany – Germany: Bundesanstalt für Finanzdienstleistungsaufsicht (BaFIN)
  • France – France: Autorité des Marchés Financiers (AMF)
  • Canada: Autorité des Marches Financiers (AMF)

Before you decide to deposit and trade, make sure the exchange is a member of one of the above regulatory bodies.

Transaction fee

Spread

The smaller the spread, the more profitable you are when trading, make sure the forex broker you choose will not change the spread during the trading process. RoboForex is a brokerage company that was founded in 2009. It provides services to financial markets in 169 countries. More than 3.5 million users are RoboForex clients. RoboForex is the leading software developer in the Forex industry.

The minimum spread at some brokers is usually 2 percentage points for a given currency pair. However, when high-impact events take place, the spread can be up to 5-10 percentage points. The broker can justify that the market is having liquidity problems so that there is no legal trouble.

Brokerage commissions and other fees.

Forex brokers generally do not charge a commission on forex transactions, with the exception of Contracts for Difference (CFDs). With CFDs, the commission is equivalent to 0.15% of the total successful trade.

In addition, the interest rate that forex brokers charge for the balance on your trading account is also a consideration. This interest rate is usually lower than the bank rate, but you will definitely receive this interest unconditionally.

Leverage variety

The standard leverage ratio is usually 1:100 or 1:200. The larger your investment, the lower the leverage ratio. Flexible trading terms will allow clients to change this rate.

Stop Out Level​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​

This is a risk management measure that allows the broker to automatically close all client positions if the account has insufficient balance. Usually this limit is 30-50% of the margin.

The 30% stop-out limit means that the broker will close the client’s trades if the account balance is insufficient or has lost up to 70% of the margin.

You should find out what broker stop-out limit applies, although this is not a prerequisite when choosing a broker.

Deposit and withdrawal procedures

Brokers often allow you to deposit via local banks or electronic payment systems. This allows you to save time and reduce the costs associated with your trading account.

Trading Platform

Trading software is a tool that you will use every day, so it should be really user-friendly and useful. Using a standard trading software selected by brokers worldwide is also considered an advantage.

MetaTrader is a popular software. It is used by over 300 major brokers and is regularly upgraded and improved.

Minimum balance and minimum trading volume.​

Having only a small initial deposit to trade is an advantage. Because Traders will only use a very small amount of money to apply for a new trading strategy to make sure that their strategy will be profitable is essential.

Trading with small volumes is very important for beginners because the potential risks in these trades are very low and they will avoid the risk of big losses while still having the opportunity to test strategies. different business.

Accuracy when making transactions

The accuracy of pricing depends on two main factors. The first is the compatibility with the current market price. The second is that the price must be realistic, that is, it must be accepted in the market.

If the price quoted by your broker is consistently lower or higher than the market price (which you can check using various sources of exchange rate information), it is a sign that the broker Your world is setting prices or their pricing system is not capable of keeping up with the market price. You should avoid dealing with that broker.

Usually, the prices of different Brokers will differ by a few percentage points, because they use different clearing methods; This is completely normal and does not present any unusual risks for traders.

Cauth

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