Best Forex Brokers – EUR/USD Brokers
You have finally decided to start trading Euro Dollar and prepared your strategy:
- Entry levels : checked
- Exit level : checked
- Stop-loss level: checked
That`s great ! Now you just need one additional thing: a brokerage account and you can put your strategy into motion. In case that you do not have previous experience with brokers it would be advisable to consider few important things before you choose one broker that will just be perfect for you. In this article we will try help you to find the best forex brokers.
- Regulatory Compliance
Almost every country has set of regulations governing trading on financial markets and offering services related to it. Regulatory and supervision framework within financial markets is important from perspective of investors protection and avoidance of potential fraudulent activities. Information regarding compliance with set of regulations is quite transparent and can be easily attained. As an example, serious top Forex broker in the U.S. will be registered with the U.S. Commodity Futures Trading Commission (CFTC) followed with membership of the National Futures Association (NFA). Information on membership and registration can be found on websites of both brokerage firms and regulatory bodies.The Markets in Financial Instruments Directive or shortly MiFID in Europe introduced in 2007. regulates financial market trades and companies within European Union member states. When a firm is registered in one member state it can operate with clients in other EU states, but needs to comply with regulation of home state and is supervised by regulatory body responsible for financial market supervision in that particular state. For example, if a brokerage firm is registered in Germany, it needs to comply with rules of Federal Financial Supervisory Authority (BaFin). Similarly, regulatory body in United Kingdom is Financial Services Authority (FSA), while in Russia it is Federal Financial Markets Service (FFMS), and so on.
Although legal regulation does not necessarily mean that some other brokers in less regulated countries could not provide good service as well, it is always better to have some higher instance to which traders can turn to in case of disputes or bad service satisfaction. Also, in some cases, choosing a broker from local country might provide better legal protection.
- Customer Service
Good customer support includes its availability during trading hours, which is in case of Forex trading 24 hours a day. It needs to be taken into account that trading platform is Internet based, specially designed software and in this sense connection or software problems might be experienced at any time. Also, issues with funds transfer, whether funding or withdrawal might occur from time to time. In Forex market any issue requires immediate attention putting emphasis on competent, polite and well trained customer service available 24/7. The best option would be availability of live customer support that can immediately address any issue, instead of automatic messages and instructions. Considering large number of brokerage companies operating in contemporary markets, very good customer service might be one of competitive advantages of brokerage firms and a way to attract more customers.
- Spreads / Commissions / Swap Rates
It is advisable to get clear understanding of all costs related to trading currencies, considering their impact on trading profitability on Forex markets.Forex brokers might take commission expressed as percentage of the spread but most usually they will charge their services through spreads. Spreads are expressed either as a fixed spread in certain amount of pips, or variable spreads in cases where there is higher market volatility. It is important to note that there are also brokers that are not charging spreads on trades, but in this case traders can expect to have wider currency spreads offered. Charging up to maximum three pips on highly liquid and traded currency pair, like EURUSD for example could be treated as market practice. Charging higher spreads for currencies with high liquidity would not be favored by Forex traders.
Minimum initial deposit placed for trading purposes can also vary among different brokers. Some brokers have option for mini-traders where initial amount could be set at $50 or even less. It is quite convenient for beginners or people who are reluctant to risk higher amounts of funds. However, it needs to be taken into account that not all brokers offer this option, so the initial amount can usually start from $500 and higher.
- Trading Platform
Today almost all brokers offer online trading platforms, which are extremely convenient considering that it significantly saves time and also allows orders to be placed 24 hours a day. Also, there is increasing number of top forex brokers offering mobile trading feature in line with extensive use of smart phone and tablet applications for various purposes. Good trading platform would include not only basic order placement but wide range of technical analysis and fundamental information. Charting tools should support substantial volume of various statistical calculations that are used by traders for technical analysis. Financial news are very important source of information for traders, so good platform must provide real-time online data feed on financial news the minute they are published.Platform must be easy to use tool for Forex trader with clear buy or sell buttons in order to avoid any possible mistakes or confusions with trades. Human interference within trading process should be set to minimum or avoided at all, so the best option is fully automated platform. It is quite convenient that many brokers offer free demo account where Forex market newbie’s can practice their trading skills, while experienced traders have chance to test platform if it suits their needs.
Trading platform is Internet based and it needs to be continuously operative without any problems with connections or interruptions in work. With demo account this option can be also checked, however, it needs to be taken into account that demo and live platforms are in different operating environment, however both are Internet based.
- Easy funding and withdrawing
Funding and withdrawing funds from customer trading account should be made with ease. In this sense it would be advisable to check what are options for funding brokerage account, considering that every Forex broker might accept different payment methods which should be clearly communicated with customer. There are also some brokers that might charge fees for funds withdrawal from clients account, and in this sense, it would be advisable to understand every aspect of terms and conditions of service the broker is providing, including conditions for funds withdrawal.Finding the best Forex broker is much more research-based task than just simple question of choice. Depending on the needs and also previous trading experience of one trader, the preferences might slightly differ. Experienced trader would seek brokers offering good trading platforms and low spreads, while newbie traders might look for regulatory compliant brokers with good customer service and option for mini-trades. However, easy funding and withdrawing funds is requirement of every trader.
Happy trading !
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