In an ever-expanding, bustling marketplace, consumers can often get lost when searching for the right product for them. Whether that be on the high street, on the internet or in the back pages of a newspaper, there are options to buy different types of the same product, everywhere!
The choice of goods in front of us can be as exhausting to compute as it is confusing. This is why it is hugely important to search for the right product and service for YOU! After all, you will be the primary user of said product.
When we think of buying a car, for example, a prospective buyer in most cases would not go into a car dealership and spend $20,000 on a car without looking at certain specifications.
For example, someone living in a busy city would be more inclined to look for a small, versatile car to cope with narrow streets and small parking spaces. A Smart Car, in this case, would be ideal. When we compare this to a person of agriculture living in the countryside, then a smaller car built for city living would not be as suitable on cross country terrain. A more robust vehicle - 4x4, like a Land Rover would be more apt.
We can assimilate the above to when soon to be traders are looking for the best Forex broker to suit their needs, and equally to suit a traders ability and knowledge.
There are quite literally thousands of Forex brokers out there so choosing the right one for you can be a minefield.
If we continue with the car analogy, we can talk a little about ability and performance. It would be crazy for a driving instructor to turn up to the first lesson of a student in a highly tuned Mustang. As it would be equally absurd to expect a Formula 1 driver to compete in a race in a Toyota Hilux. What I am driving at here (excuse the pun) is that different Forex brokers offer a variety of services and these particular services are often targeted at a trader's ability and what kind of trader would find them useful.
When we think about people looking to break into the Forex trading there should be some aspect of training or introduction to how Forex trading functions. For this reason, it would be advised by most institutions for the future trader to conduct some research into this new world.
There are several ways in which a trader can do this. The most obvious being education. There are many websites out there that offer services such as seminars, reading materials, and videos. Often these come at a premium. It is important to note that there are Forex brokers on the market that offer educational material included in their sign up packages. Meaning one can trade on a platform and learn in the same space. A one-stop-shop for trading and learning!
An invaluable feature on certain broker sites is gaining access to a free to use a demo account. This can enable users to learn how to operate the MetaTrader4 platform without putting up any capital. Trading with virtual money to develop a trading strategy and grow accustomed to the tools and functions of MT4.
Other key points that new consumer should consider are lot sizes available to trade. Micro lot trading will be more beneficial to new traders as well as minimum deposits. This creates great accessibility for people who would traditionally be priced out of getting involved in trading. Beginners should look out for low deposit limits such as $10 and the option to trade as low as 0.01 lots. This combination helps a beginner rest assured that they have the environment to learn from a demo, go ‘live’ with low capital risk and take even less risk in exposure due to micro lot trading.
We could categorize intermediates as users who have used a demo account and traded with low investment already. So what functions should an intermediate trader look out for in a new broker?
There are a few factors that jump out here. Costs would be one. Often brokers will offer high leverage in return for an ongoing subscription fee. Such as:
‘’Deposit $1,000 today for leverage up to 1:500’’
‘’Trade 20 lots in a month to gain access to high leverage trading’’
The above adverts are not ideal for a trader of medium ability, mostly due to the initial capital that would be needed to invest. So it is important to find a broker without such set parameters which may outprice an ‘average’ trader.
Staying with leverage, traders need to look out for the set leverage available. It may also be favorable to look for an account which is not tiered but an account which couples high leverage with low deposits - keeping things simple and straightforward. Thus allowing the user to invest more energy into trading than thinking about hitting set triggers to keep using a complex account type.
More experienced traders will likely have years of experience under their belts and likely be well accustomed to a range of trading platforms. However not all Forex brokers provide a space where a trader can benefit from high leverage, fast execution and low costs all on their preferred platform. When searching for an ideal arena, experienced traders should look for a blend of these features particularly whilst looking for a broker that offers the mentioned features backing into the MT4 platform. This arguably the most preferred platform on the market for traders of all abilities.
Speed is hugely important for an experienced trader. Not only trade execution speed, customer support response times but speed of deposits and withdrawals is paramount.
The more seasoned trader will often see an opportunity to trade at short notice and want to get liquidity into their account ASAP. There are fewer things more irritating to a trader than identifying an opportunity to make a profit and not having the liquid funds to invest. A sure-fire way to get around this is to deposit using a digital asset such as Bitcoin. So when looking for a broker, look for one who accepts cryptocurrencies as a deposit and withdrawal method, ensuring speed when getting money in and out of your account. Old traditional methods such as wire transfers can severely hinder your accessibility to trading in that consumers can often wait in some cases weeks to fund their account often resulting in missing out on that vital market movement.
Staying inline with cryptocurrencies, it is important for you, as a trader, to feel that your funds are safe. The world is now waking up to the crypto era and we are certainly in it. With that comes the knowledge that not all outlets online should be 100% trusted. A good way to spot a ‘safe place’ to trade, exchange, swap your cryptocurrencies is to check whether that platform/website offers cold storage.
More often than not experienced traders will be trading high volume, emphasizing the importance to know that their funds are safe. By using ‘cold storage’ this means your funds will be stored on an external hard drive and completely offline, away from potential online threats. This also expresses that a broker takes the security of your funds incredibly seriously and in turn, cares about you!
A real bonus factor in considering a broker would be ‘daily market analysis’. These can come in the shape of email alerts and information on that particular broker's site. They give the trader insight into a variety of global events including what government meetings are happening where and how this may affect a particular currency. This gives an experienced trader a real-time advantage when thinking about their next trade - conveniently packaged in one place.
So what have we learned?
We know that there are many factors when considering the right broker for you. These range from educational materials ranging from demo accounts, an introduction to forex to the other end of the learning spectrum when receiving market analysis to mull over.
We should also consider the deposit methods and speed to ensure we there are no delays in getting involved in your favorite currency pairs. Trade with peace of mind that your funds are stored offline away from malicious online threats.
So when choosing the right broker for you, take your time, take a step back and choose the ‘vehicle’ which is best suited to get you on the road to trading! Good luck!
EagleFX encompasses all of these factors and prides itself on offering the best 24/7 customer support team. From offering educational reading for traders looking to embark on a new venture in Forex and Cryptocurrency trading. EagleFX also has educational material to help new traders learn and grow in confidence.
New sign-ups can take advantage of a free to use a demo account and deposit as little as $10 when they are ready to embark on their trading journey.
Risk Warning: CFD and Spot Forex trading both come with a high degree of risk. You must be prepared to sustain a total loss of any funds deposited with us, as well as any additional losses, charges, or other costs we incur in recovering any payment from you. Given the possibility of losing more than your entire investment, speculation in certain investments should only be conducted with risk capital funds that if lost will not significantly affect your personal or institution’s financial well-being. Before deciding to trade the products offered by us, you should carefully consider your objectives, financial situation, needs and level of experience. You should also be aware of all the risks associated with trading on margin.