If you’re about to begin your trading journey in FX, it’s likely that you’ve already begun to think about who you should choose as an FX broker. Due to FX trading’s global popularity, there are many FX brokers to choose from – both reputable and questionable – that provide trading platforms for everyone from amateurs to professionals.
It’s important to look into an FX broker before trading with them to ensure you’ll be trading with somebody credible, helping to minimise the chances of losing a lot of your money. Before you dive into the market, here are some things you should keep an eye out for when searching for an FX broker.
Legitimacy and Licenses
Reputability and credibility are hugely important qualities for an FX broker to have. You can determine these qualities by checking to see if the broker is properly regulated. Australian FX broker providers that are trusted and reliable will be able to offer proof of their ASFL (Australian Financial Services License) and their ASIC (Australian Securities and Investments Commission) approval. These are crucial things to look for, as they promise you financial security in your trading experiences as well as proving the trustworthiness of your FX broker.
Unrestricted Demo Accounts
A demo or practise account allows you to experience trading before actually using any money. Most reputable FX brokers will provide an unrestricted practise account for new traders to help them get an idea of what they’ll be dealing with later on. This gives you a chance to test your trading strategy without risking a huge loss and ensure you feel comfortable with the platform. A practise account provides the perfect opportunity to evaluate your tactics and get ready for the real thing.
Competitive Spreads and Reasonable Leverages
To be a good trader, it’s important that you accept loss as inevitable and quite likely. No matter how good your FX broker is, losses are part of the game, and until you’ve really developed your trading strategy, it’s likely that you’ll face some losses. However, it’s still important that you look into what your FX broker is offering you and whether it’s competitive in the market. Look for spreads and leverages that are impressive but still realistic. Look for smaller spreads, as these contribute to bigger profits, and keep in mind that the higher the leverage, the higher the risk.
Trading Platforms and Customer Service
It’s also worthwhile to look into the trading platform that the FX broker provides and what kind of features they offer with it. A good trading platform is crucial for trading comfortably and conveniently. On top of this, you should ensure you’re choosing an FX broker that can promise quick responses and useful information through their customer service. This will be helpful if you encounter any problems using the trading platform or trying to expand your trading strategy and overall skills. This is also what will set apart FX brokers who genuinely care about their traders from the rest.