Choosing A Reliable Forex Broker To Work With

The foreign exchange market is the largest as well as the busiest financial market in the globe, where it handles a trading volume worth trillions of dollars. When and if done the right and the proper way, forex trading can be a very lucrative investment. This is why the forex market appeals to a lot of traders and investors across the globe.

Working With A Forex Broker

While you can directly trade in the forex market, many choose to employ the services of a forex broker, like,  because of the advantages they enjoy. Forex brokers serves as intermediaries or middle-men between the forex trader and the interbank market, a system that is used by banks as well as other financial institutions to trade various currencies. Hence, an interbank system would refer to all major banks and all their connections wherein they send currencies to one another.

Forex brokers,  provides a way for both retail forex traders and forex investors to connect to the larger market since major banks aren’t interested in having to deal with “small” volumes of money which an individual forex trader puts into the forex market.

What To Look For In A Forex Broker

As forex brokers serves as bridges, it is then imperative that you choose a professional and reliable forex broker to make that connection. Otherwise, you only waste your time and your money. However, with the multiplicity of forex brokers to choose from, it can be overwhelming to take on the task particularly if you don’t have any idea what to look for in a forex broker. To help you in your search, here are a number of things to check when picking a forex broker to aid you in your forex trading endeavor.

HIGH LEVEL OF SECURITY

The major characteristic of a reliable and trusted forex broker is the high level of security they provide. After all, you don’t want to entrust your money to someone who claims they are legit without giving any proof. Thanks to the internet, checking the legitimacy and credibility of forex brokers is now easy and simple as there are strict regulatory bodies around the globe that separate forex brokers who are trustworthy from those who aren’t. Here is a list of these regulatory bodies and their corresponding country:

  • AUSTRALIA: (ASIC) Australian Securities and Investment Commission
  • CANADA: (IIROC) Investment Information Regulatory Organization of Canada
  • FRANCE: (AMF) Autorité des Marchés Financiers
  • GERMANY: (BaFIN) Bundesanstalt für Finanzdienstleistungsaufsicht
  • SWITZERLAND: (SFBC) Swiss Federal Banking Commission
  • UNITED KINGDOM: (FCA) Financial Conduct Authority and (PRA) Prudential Regulation Authority
  • UNITED STATES: (NFA) National Futures Association and (CFTC) Commodity Futures Trading Commission

TRANSACTION COST

Regardless of what type of forex trader you are, you will have to pay for transaction costs. Each time you make a trade, you need to pay either a commission or spread. Hence, look for a forex broker with the cheapest and most affordable rates. However, make certain that that they provide quality service even with such kind of rate. At times, you will need to sacrifice paying more for a much reliable forex broker.

HASSLE-FREE DEPOSIT AND WITHDRAWAL

A good forex broker allows you to make hassle-free deposits and withdrawals as they actually have no reason as to why they should make it very difficult for you not to. Afterall, it is your money and your profits. They simply hold your funds in order to facilitate trading.

TRADING PLATFORM

When engaging in forex trading online, the trading activities mostly transpire in the trading platform of the forex broker. Therefore, you need to ensure that the platform of the forex broker you choose is stable as well user-friendly. Furthermore, most forex brokers also provide a practice or demo account so as to give you the opportunity to have a feel and run through of how forex trading works.

Understanding Stocks

Not having any clue with the stock market but planning to make an investment? The whole thing could be overwhelming and intimidating at the same time. Stocks are different from money market funds, certificates of deposit or savings account. That being said, stock’s value rises and falls depending on the market situation. If you don’t have enough knowledge or experience in investing, there is a big possibility of losing majority of your capital upon investment.

As for business owners on the other hand like those in dental debt collection, clothing or whatnot, they may have cushion to lose since they always have something to fall back on. For those who have none though, it is extremely important to learn and understand about the fundamentals of stock investments.

Buying Stocks

If you wish to buy some stocks, then you need to find yourself an online broker. Even after finding a broker that you can trust, there are still many other things that should be taken into consideration. To avoid confusion on this matter, there are few tips to be reminded of.

Find out Your Goal

Just before starting to any sort of investing, the very first thing that you must do is ensuring that your financial situation is somewhere that can cover for this activity you’re trying to do. Your financial baggage will include everything from your household budget, personal expenses all the way to your income and debt.

Save Some

Before putting any of your cash to stock market, it is imperative that you put away some that won’t be subject to risk or whatever.

Being able to have cash reserve that is equivalent to at least 90 days of your living expenses must be the minimum.

There are couple of reasons why having cash reserve is important and they are:

  1. They serve as emergency fund in case of financial emergencies
  2. It will keep you from pressing the panic button in the event that you take a dive on an investment

Start it Off with Exchange Traded Funds or Mutual Funds

If you are just starting with investing, you are better with mutual funds as well as exchange traded funds or simply, UTFs instead of going directly to stocks. Funds are managed professionally and this will help in removing the burden of choosing stocks from the get go. Then, once you become comfortable with the stock market and more equipped with experience and knowledge, that is when you can slowly move up.