To make things a little easier for you, we have compiled a list of things to keep an eye out for when making your decision.
Segregated funds
The vast majority of online forex brokers now ensure that segregated funds are the norm. As such, this is something you might want to look out for when selecting your broker platform.
Put simply, if your forex broker offers segregated funds, this means that any trading capital you have will be kept safely away from the funds your broker is using for the operation of the business.
Always check the regulations of the particular broker though, as platforms will differ in how they operate, and in the case of bankruptcy; your funds might not be 100% protected.
Deposits and Withdrawal Options
When it comes to depositing into your forex broker account or withdrawing your profits, your experience should be fast, simple, and also transparent.
Whilst a lot of platforms will process your deposit straight away, it is always a good idea to double-check that your broker, or payment method, isn’t going to take a little longer.
Be aware that some brokers will charge you an inactivity fee. It is usually a payment as small as a few pounds/dollars/euros, so always read the terms and conditions attached.
Some of the most common payment/depositing options available include; Visa, Mastercard, e-wallets (such as Paypal), American Express, and a bank transfer.
Customer Service/Support
Customer support is a vital part of having a good experience with any company. Whilst the majority of forex brokers offer a great customer support service, it is always advisable to do some research before making your final decision.
Some brokers will offer you a free online consultation, the best will offer you support every step of the way.
Customer support options will vary but options usually include; live chat, email, telephone, and even social media. A lot of platforms provide 24-hour assistance with any problems or queries you might have.
Low Commissions and Trading Fees
This one’s self-explanatory, but forex brokerage fees can vary quite wildly. Nevertheless, fees typically come as a ‘trading commission’ – which is a percentage multiplied by your stake.
For example, let’s suppose that the forex trading site charges 0.2% and the size of your order is $3,000. This means that you will pay a commission of $6. If you then closed your position when the order was worth $3,500 – your commission would stand at $7.
As we discussed earlier, you need to ensure that your chosen broker offers low spreads. In this respect, aim for forex trading sites that offer spreads of below 1 pip on major pairs like EUR/USD. The only exception to this rule is if you are using a commission-free broker, as naturally, you will find the spreads are slightly higher.
Other Points to Consider
Multiple forex pairs: Again, the more options the better – especially when it comes to tradable instruments. While some brokers might have a few pairs, others might offer a surplus of 100. You can check this before signing up.
A good variety of technical indicators: These statistics and overlays will aid you in making better trading decisions, due to the insight they provide. As such, make sure your chosen broker offers heaps of technical indicator and advanced chart reading tools.
Learn Forex Trading – How to Get Started
So you’ve chosen a forex broker you are interested in signing up with, but don’t know where to start? We’ve compiled a simple list of step by step instructions to get you trading in minutes.
Step 1: How to open an account
Once you’ve selected your preferred platform, you can visit its web page and begin the process of opening your account. Like with most new accounts or anything you need to sign up for, you are going to need to enter some personal information to get the ball rolling.
This part is pretty standard; you will always need to enter your full name, date of birth, contact details (usually mobile number and email), residential address, and in this case your tax status.
As well as your tax status, you are going to need to provide your broker of choice with some other information, in relation to your finances.
Generally speaking, the financial information required of you will be your net worth, your regular income, and your employment status. The forex broker will need this information in order to provide you with a real-money account, as well as the right products, tailored to your financial situation.
Step 2: Previous Trading Experience
Here you are going to have to answer some questions (usually multiple choice), based on your previous trading experience.
Essentially, regulated forex brokers will need to make sure you know what you’re doing. Forex trading is made up of highly developed financial instruments, so having some prior experience in this trading arena is quite important.
You might find that you are unable to trade on with margin if you fail to answer some of the questions correctly.
Step 3: Identity verification – KYC
Next, you will need to prove that you are who you say you are. Commonly called KYC, or Know Your Customer, confirming your identity is an absolutely essential part of signing up to any broker.
Whilst brokers will usually request scanned copies of documentation when proving your identity; depending on local regulations, some brokers will actually verify your identity via video. In either case, you will need to make sure you have your passport, or national identification ready.
In the case of video verification, an external fully verified provider (& EBH partner) will conduct the video, on a verified platform at the end of your registration process. Video verification will require an operator, and therefore will have certain hours when it is available, usually normal business hours.
Proof of address usually requires just one document, from a list of accepted documents. Usually, a copy of a bank statement or a utility bill (electricity, water, gas or even a phone bill) will be sufficient when confirming your address.
Once your identification has been verified you officially have an account and can begin the next step, which is to add some funds to your forex broker account.
KYC processing times can vary, but if you feel like you have waited too long for confirmation, you can always contact the broker’s customer support team, and they will be happy to chase this up for you.
Step 4: Deposit Funds
As soon as your identity has been verified by the forex broker, you can deposit some funds into your account.
If you have a specific payment method you need to use, you should always check that the particular broker accepts such a payment method, as they do vary.
If your payment of choice is a debit/credit card, the likelihood is that your deposit will be credited to your account immediately. With a bank transfer, for example, it may be a few days before your deposit is cleared.
A few payment methods usually accepted are; Debit/Credit cards, bank transfers and e-wallets.
Step 5: Begin Trading
It is definitely recommended that before you begin to trade, you have a basic understanding of how it works, as well as how to enter and exit positions.
Before you make an actual transaction, a great way to prepare for your first forex trade is to start with a demo account.
This is a sensible way to avoid the high risk of practicing using your real trading funds, and also helps you familiarize yourself with the platform when it comes to the real thing.
You can now create a forex order, basically a command for your broker.
Once you’re at the stage where you have opened an account, verified your identity and added funds by depositing some money into it. – now, it’s time to start trading with real money It’s a good idea to start with very small stakes, as it makes sense to get your head around how everything works before taking any major risks which you might regret later.
Conclusion
Due to somewhat of a forex revolution over the past few years, a financially independent lifestyle is now available to just about any trader.
Hopefully, after reading this guide, you have a much better understanding of the inner mechanics of how forex works, as this knowledge will ensure you get your trading career off on the right foot!
