The Forex market is among the biggest in the world. By volume, value and number of transactions, it exceeds almost every market in existence by many times over. Every day, on an average, over $5.3 trillion worth of transactions keep the market alive and active. Many types of transactions are carried out in the Forex market and the biggest ones are spots, forwards, foreign exchange swaps, currency swaps, and options.
The Forex market is truly global as any currency can be exchanged here from the world over. The market also never really rests as it is a global market and there are active transactions going on in some part of the globe every day, all day. The only time the market rests is the weekends measured from Sydney to New York.
To trade forex, you need an online broker. Trading with a trusted forex broker is crucial for success in international currency markets. As a currency trader or investor, you may have specific needs related to which platform, tool, or research requirements you have. Understanding your investment style can help determine which fx broker will be best for you.
Questions to ask when seeking trusted forex broker
It makes things much easier if you write down a list of features that you want in the forex broker you would like to work with. You can achieve this by writing down answers for the following questions:
- What currency pairs would you want to trade in?
- What type of spreads would you be comfortable with? (fixed, variable and how many pips)
- Are you ready to pay a commission when trading forex?
- How much money can you invest in forex trading? (this gives you an idea of your account size and facilities available)
- What level of leverage are you looking at?
- What are the tools and indicators required for you to trade forex?
- Do you need any specific trading platform? (for example, MT4)
- Are you a scalper?
- Do you want to hedge?
- Will you need a trailing stop?
- Are you looking at “one-click-trading” execution feature?
- Would you be trading on-the-go and/or do you need trading alerts?
- What type of broker do you want to work with? (ECN/STP or Dealing Desk)
- What options do you want for transferring funds to your trading account? (wire transfer, PayPal, credit card, etc.)
- How much are ready to pay for funds transfer and withdrawing money from your account?
Proven facts for a good forex broker:
- Regulation and license of an official finance authority
- High safety of customer funds
- Fast and reliable market execution
- Small Forex Trading fees and no hidden fees
- No requotes (high liquidity)
- User-friendly trading platform
- Free and unlimited demo account
- Professional support
- Fast deposit and withdrawal methods
If we call a forex broker as a trusted one, either we would have seen or heard about their professional services or would have personally experienced their services. Well, for my broker hankotrade both these things can be considered as reasons for why I call them as a trusted forex broker. There are a large group of forex brokers calling themselves as reliable, zero spread brokers but many of them fail to keep up the word even when the market is little fluctuated. Now, here’s what I experienced with hankotrade to call them as a trusted forex broker.
1. They have a variety of account types including STP, ECN, ECN plus and Islamic. All of these accounts have their individual features explained in their official website to give a clear idea for the traders.
2.You will be charged zero for every deposit and withdrawal of funds. Not just that, all withdrawals will be processed within almost one day.
3.Forex trading accounts are secured by negative balance protection features along with margin and stop loss calls.
4. ECN trading accounts have spreads starting from 0.0 pips and with $2 commission per $100k.
5. Very fast at executing trade orders which makes them ideal for scalping traders.
6.100% deposit bonus, demo account with real market simulations makes them a low risk forex broker for beginners and average traders.
7. Virtual private servers and forex calculators for tech savvy and expert forex traders looking for automated trade systems.
8. Responsive client support team to help the traders then and there.
Is a Forex Broker Trustworthy?
If you conduct a search for forex, you may see a lot of sponsored ads at the top for odd brokerages that don’t make it onto our top forex broker list. This is because they are probably scams and don’t have any tier level jurisdictions. It’s important that a forex trading platform be compliant and regulated so that you know it’s trustworthy.
Most forex brokers are publicly traded and have jurisdiction in the US, UK, Canada, Singapore, and Australia. These are the most reliable jurisdictions due to the regulation they enforce, to protect investors. In the United Kingdom, for example, forex trading is regulated by the Financial Conduct Authority.
In addition to governing bodies, there are also organizations. In the US, one of which is the National Futures Association (NFA), which is a registered futures association designated by the CFTC.
In the UK, there was the Financial Services Authority (FSA). The FSA regulated financial entities in the UK from 2001 – 2013. The UK restructured its financial regulation after the 2008 financial crisis, and the FSA morphed into the Financial Conduct Authority (FCA).
Due to the high risk involved in forex trading, you should keep an eye for any brokerage that looks too good to be true and isn’t based in one of these five countries.
Are US Forex Brokers most reliable?
Forex trading is mostly done by large banks and mega corporations, which trade in large volumes. It is said that they are the only ones who are capable of making profits as the margins are small otherwise. Is it true that common investors rarely make any significant profits in Forex market? The answer is both yes and no. Only a few in the market make big money, some make modest profits and some lose. The Forex market similarly is one that has its ups and downs, but through diligence and careful study, it is possible to make profits in the market. The Forex practices in the US, are however quite safe as far as the regulations go. The NFA and CFTC have a set of regulations that govern all brokers inside the country, which strives to protect both the investors as well as the brokers. Apart from having the margin for leverage set at a rate of 50:1, the record keeping and reporting is quite rigorous.
Best Forex Brokers by Jurisdiction
Here are the top forex brokers in the world’s leading jurisdictions:
- Best Australian Forex Brokers
- Best U.K. Forex Brokers
- Best U.S. Forex Brokers
- Best Forex Brokers in Canada
- Forex Trading Singapore
- Forex Trading South Africa
- Forex Trading Malaysia
- Forex Trading in India
- Forex Brokers in Nigeria
- Best Forex Brokers in Kenya
- New Zealand FX Brokers List
- Best Forex Brokers in UAE & Dubai
FX Broker Platform Technology and Trading Tools
Forex trading involves complex instruments. With better charts, analysis tools, automated traded, and backtesting, you can become a better trader. However, it’s also about the interface and whether you can access these tools across all trading platforms including your phone.
Many of the best forex brokers today have a mobile app, but does it let you do everything that you can on a desktop or browser-based platform? In addition, how secure is the trading platform? Some forex trading platforms use a VPN to protect your privacy at all costs.
To the surprise of many, there are actually a number of great apps you can leverage to trade Forex. Thanks to the benefits of modern-day technology, trading Forex can be done through a smartphone. The best forex trading apps offer much of the same technology seen in the brokers listed above.
When something goes wrong with a trade or if the app is bugging out, you want to be able to contact someone right away. While 24/7 customer service every day of the week is almost unheard of, there are some brokerages that have this chat service.
Phone support is the best way to get help when you have a complicated problem, but not all brokerages offer this support. Most of all, the response time is the most important. You want to know that you can get assistance, and if you choose a global exchange in another time zone, you may be out of luck if something goes wrong.
Deposits and Withdrawals
Deposits and withdrawals are usually nothing to worry about, except in a few rare cases. A broker that will not speedily send you funds which you have requested and are in your account, raises a big red flag, and is to be avoided at all cost. Deposits are made speedily almost everywhere, for obvious reasons. Occasionally, you may wish to use a payment method which a broker will not accept, for some reason. You will have to find another payment method or another broker which accepts your preferred payment method in such a case.
Check the minimum deposit each potential broker requires from you in order to open your account. This can range from $10 at the low end to as much as $10,000, although fortunately most brokers accept clients willing to deposit as little as $100 or perhaps $200.
Deciding how much money you should deposit with a Forex broker is also important. Not only should you only deposit funds which you can afford to lose, it is also worth considering whether all the funds you can afford to lose should be in the custody of only one broker. You could consider splitting the amount in half and opening accounts with two different brokers, for example, as an effective way to limit your overall risk as a trader. There can also be other valid reasons to do this, for example, you might want to trade stocks with broker A and forex with broker B because their respective offerings in each differ in quality.
Keep in mind that generally, the more you are prepared to deposit, the better deal you are going to get. Many brokers offer a lower cost of trading (e.g. cheaper spreads, etc.) to anyone depositing more than say $500, $1,000, or $10,000. You should never deposit more than you can afford to lose with a Forex broker, but it is another factor worth considering.
Choosing a Reliable Broker for Forex Trading
The concept of being spoiled for choice cannot be truer in any other type of market. There are thousands of brokers in the US Forex market. Since the advent of online trading in the Forex market, brokers have mushroomed up all over the country and it is true that any person with a computer and a reliable internet connection can participate in Forex trading.
Some things that can be taken into consideration while looking for a reliable broker in the US are the record of the company. Does the firm have a good track record? Is it rated well for its business practices? Most importantly, is the firm registered as part of the National Futures Association?
Trading and methods
The next point of consideration will be the way in which the brokers do the business, the kind of offers they have, and the service. Apart from that, look for the following to find a reliable broker :
- Spread margins: rule of thumb - the tighter the spread, the more money saved.
- Execution: The speed, or time between an order and the execution can be the difference between profits and loss. Conducting a few test on demo systems to gauge the efficiency of the trader is a good idea.
- Platform: The trading platform needs to be concise in terms of data as well as ease of use and reliability.
- Accounts: Some brokers allow simple wire or Paypal transactions, but others charge heavily for even general withdrawals.
Red flags - Scam Brokers Do Exist
There are more ways to loose money than to make money in Forex, so being cautious pays. When looking for a broker, look out for:
- Unusual rules
- Heavy claims in the advertising
- Unsteady platforms that re-quote
- Front-running brokers
Most importantly, always remember that if the offer is to good to be true, it usually is. It may take a few jerky attempts before you can begin to expect a steady inflow. However, once you find a reliable broker, trading should get simpler for you.