- Apr 6, 2022
1. Check the Regulatory ComplianceThe first step will be checking the broker’s regulatory compliance. Choosing a regulated forex broker is a major decision in your trading journey, as your broker is considered your trading partner. Sometimes, even the best trading strategy fails to generate profits if you don’t use a reliable trading platform and don’t place orders precisely, or if you use a fraudulent forex broker.
It is important to choose a forex broker who offers direct access to trading platforms and full control over your personal area. Brokerages that do not provide direct access to funds or trade history or are not MT4 or MT5 licensed should be avoided. If you are executing a market order or pending order, be sure to familiarize yourself with the buttons. This does not mean that you can start trading right away. Practicing on a Demo account allows you to gain a better understanding of a forex broker without risking your hard-earned money.
2. Diversity of Account TypesChoosing the best Forex account type will be one of the first decisions you need to make as you begin your forex trading journey. As there are so many variables involved in this decision, there is no universal right or wrong answer; what matters is which forex account type is right for you.
In this regard, some accounts are better suited for beginners, others for those looking to deposit $100 or less, and still others for those looking to make large investments. Trading preferences greatly influence which account is best in the long run, so there are no absolutes. Standard, CENT, ECN, and Demo are the four best forex account types—and each has its own advantages and disadvantages.
The best forex broker will likely provide clients with multiple Forex accounts. Based on your trading experience, risk appetite, and investment capital, you can select the one that best meets your needs. If you’re looking for the right investment account for your experience and funds, then you should spend some time checking out the list of options your broker offers.
3. Review Features and Advantages of the Trading AccountsTake a deep look at account features and advantages offered by the broker. Each forex broker has different account features. Four aspects to consider when comparing account features among brokers are commissions and spread, ease of deposits and withdrawal, leverage and margin, and initial deposit requirements.
- Commission: also known as the compensation for trading intermediaries in non-spot forex, it is less popular in the retail Forex industry. Zero-spread and ECN accounts usually have some sort of commission.
- Spread: the difference between the bid and ask price, it’s usually how brokers make profits if they charge no commission. Make sure you have a look at the spread charged for each account. The most reliable forex broker should always provide the lowest spread on major currency pairs.
- Deposits and Withdrawal: The flexibility of the deposit and withdrawal from your account is a critical factor in choosing your forex broker. The best forex broker should provide reliable options for both deposits and withdrawals.
4. Choose A Reliable LeverageForex leverage is an investment tool for using borrowed capital to maximize an investment’s potential return. Funds that brokers lend its traders in order to multiply their investment capacity and increase the rate of potential return.
The top forex brokers out there offer a wide variety of leverage levels, so make your research and choose the suitable leverage for your trading goals. Remember, leveraged forex trading is a double-edged sword. So, it is important that forex traders know how to manage leverage usage and adopt a strict risk management plan to mitigate potential losses.
Forex leveraged trading is also known as margin trading since the margin represents your good faith deposit when opening a new trade on your account. The $1000 in your 1:1000 leverage account is your margin. Depending on the size of your trade, you may need to pay a different amount of margin. While leverage adds excitement to forex trading, it is also important to choose the right forex leverage to ensure long-term success.
5. Currency Pairs and Trading Instruments OfferedAnother feature to keep in mind is the currency pairs offered. Some brokers offer only limited pair choices, which will cap your trading activity. So, you need to check what pairs the broker offers for trading before getting started. Major currency pairs reflect the most stable and prosperous economies around the world and offer low spreads that accurately reflect market prices, making them particularly attractive to forex traders. Rather than trading lesser-popular currency pairs, beginners should trade major currency pairs.
Besides, it is crucial to check the diversity of trading instruments available on the broker’s platform like commodities, indices, and cryptocurrencies. This will help you diversify your investment portfolio and offer more trading opportunities for you.
Successful investors know the importance of diversifying their investment portfolios. However, an effective diversification doesn’t necessarily require a wide portfolio of assets. According to Warren Buffet, diversifying within one asset class will probably yield better results more quickly. It is, however, important to choose an asset carefully. One of the most popular types of portfolios in this regard is the Forex portfolio.
Join the Market and Start Trading NowHopefully, you now have a better understanding of how to choose the best forex broker. Now, let’s move on to the advantages you receive when you open a forex account with the most-trusted forex broker AximTrade.
AximTrade provides a variety of trading options tailored to each individual in the Forex market. Traders using AximTrade have the freedom to choose between multiple account types based on their trading strategy, experience, and capital designed for investment. The account types include a Standard account, CENT account, ECN account, Infinite Leverage account, and a Demo account.
Clients of AximTrade can manage up to 15 active trading accounts, including 7 Standard Accounts, 2 Cent Accounts, 5 ECN Accounts, and only 1 Infinite Leverage Account per Member Area profile.
Source: Top 10 Tips: How to Choose The Best Forex Broker?