There are an overwhelming number of online forex brokers with something different to offer all types of traders. Choosing one inevitably comes down to your forex trading needs and goals. If you’re on the lookout for a top forex broker, these are some of the things to consider.
A closer look at what a forex broker is and does
Forex brokers act as an intermediary between traders and the forex market. A forex trader will register with a forex broker in order to trade currencies in the forex market. What does this mean? Well, when trading forex, a trader will typically buy or sell CFDs on currency pairs. To do this, they must open a trading account with a CFD forex broker. Once opened, the account is usually funded by the trader, who then goes on to use the broker’s trading platform to execute trades.
Online CFD forex brokers offer multiple accounts and trading platforms to cater to the needs of different traders. The most popular forex trading popular used by millions of traders worldwide is MetaTrader 4. But this is not to say that other in-house or 3rd party trading platforms don’t exist. So, what is it exactly that a trader should look for when choosing a forex broker?
Trading platforms and technologies
New technologies today are transforming the forex trading experience. Trading platforms in particular keep on evolving to provide everything that traders need to trade forex. In the process of selecting a forex broker, consider opening a demo account to get a feel for what trading on the broker’s platform will look like. Use the demo account to test your trading strategies in a risk-free trading environment. Use virtual funds to practice your trading techniques. Ensure the platform is user-friendly to avoid the risk of executing trades incorrectly. Look for features like advanced analytics tools (technical/fundamental), interactive charts, trading signals, etc., to help you gain vital trading expertise. Consider a broker that offers access to the latest financial news, and educational resources, to boost your trading skills.
MetaTrader 4
The MetaTrader 4 (MT4) trading platform is considered one of the best currency trading platforms by global traders. They use it to trade forex as well as CFDs, futures, indices, and other financial instruments. MT4 is popular for many reasons. It is customisable to the needs and trading styles of traders at any skill level. The platform can be used on the go through a mobile app and via the web on any browser or operating system.
MetaTrader 4 offers key trading features to forex brokers everywhere. This includes a powerful trading system that can implement complex trading strategies, advanced analytical functions, trading signals, charts, etc. MT4 supports algorithmic trading and provides access to the MetaTrader market. This market offers an extensive choice of trading applications, 1700+ Expert Advisors (trading robots), 2100+ technical indicators, and more. The MT4 trading platform also appeals to traders worldwide for its ease of use, simplifying online forex trading.
Manfaat
Leverage is hugely popular in the world of forex trading. Leverage is essentially borrowed funds. In other words, a trader borrows money from a forex broker to trade larger a position in a particular currency. Almost all CFD forex brokers offer leverage, the size of which is dependent on the broker. Traders will usually decide on the amount of leverage they require based on the size of the trades they wish to execute. Leverage is however associated with very high risk, particularly during times when the market exhibits volatility. As a result, while leverage may amplify profits, it can just as quickly expose a trader to massive losses.
The mitigating risk associated to leverage
A trader must be very cautious when making use of leverage. A range of tools can help a trader mitigate leverage risk, to avoid losing all their capital. This includes:
- Stop loss orders. This is a trade order to exit a particular trade position at a certain price level.
- Take profit orders. An order for an open trade to be closed when a price reaches a specific level (or a desired profit has been achieved).
Funding and withdrawal procedures
Forex brokers have their own criteria for funding or withdrawing from an account (standard, mini, or micro trading accounts). Traders usually fund their forex trading account via a credit card, wire transfer, or some other form of electronic payment. Initial deposit requirements vary and can be as low as US$50. No matter the size of the deposit, leverage gives a trader the ability to open larger trades when required. However, this leverage should be used prudently to avoid large losses. Withdrawals are typically processed through wire transfer. This service may come with a fee attached to it, depending on the broker.
Tip: Get to know more about a forex broker’s funding and withdrawal procedures before opening an account. Read their policies carefully to ensure you fully understand what to expect. Transparency is key and necessary to avoid any surprises or long waiting periods.
Customer support
Regardless of the industry, high-quality client support is paramount. Remember, the forex industry is possibly the largest and most active financial market in the world. It is open 24 hours a day, 5 days a week, across several time zones. Trades are opened and closed in seconds. The market is impacted by a range of economic and political variables, increasing volatility. For an industry of this nature, strong customer support is incredibly vital.
Tip: Opening a demo account is a great way of testing out a broker’s level of customer support. The demo account provides a trader with the opportunity to engage with the broker in many ways. This could be by speaking to someone over the phone, chatting via their live chat feature, or communicating by email. Gage the speed of response. Assess the quality of expertise and assistance.
Competitive spreads
A significant differentiator between forex brokers is the competitiveness of the spreads they offer. Spreads are either narrow or wide, and are dependent on several factors:
- the currency pairs to be traded
- the time of day trade is executed
- market fluctuations
Leading forex broker T4Trade for instance offers flexible and competitive spreads across a range of assets. This combined with their excellent trading conditions and products and wide range of accounts makes T4Trade a popular broker choice.
Currency pairs offered
Leading forex brokers typically offer the most popular currency pairs to trade (the majors), that comes with the highest liquidity. These include GBP/EUR, EUR/USD, USD/JPY, USD/CAD, AUD/USD, GBP/USD, USD/CHF, NZD/USD, etc.
Choosing T4Trade
Picking the right forex broker requires extensive research to make an informed choice. T4Trade is quickly gaining popularity for its reliability and expertise in forex trading. The broker offers many cutting-edge trading tools, learning resources and current market insights to make you a more strategic trader. This is in addition to a strong customer care team, flexible leverage, low spreads, fast execution and easy deposits or withdrawals.
Disclaimer: This material is for general informational & educational purposes only and should not be considered investment advice or an investment recommendation. T4Trade is not responsible for any data provided by third parties referenced or hyperlinked, in this communication.
