The basic criteria for choosing a good and reliable Forex Broker

Are you dizzy in choosing the right brokerage company, or confused by the many broker choices that you don't know which one to choose?

Maybe many traders ask about how to choose a safe and good brokerage company? Well, the selection of brokers is very important because in forex trading it is like we entrust the money to the broker as an intermediary so that the broker we choose must be truly regulated and secure.

Forex brokers are companies that provide online forex trading facilities, and instead benefit from the difference in selling at the prices of supply and demand (spreads).

However, the number of brokers is very large throughout the world up to hundreds of companies, so we must be careful in choosing a good and reliable forex broker so as not to get caught up in fraud.

There are actually many good forex, CFD, Gold, and stock broker companies, and we will give tips on how to choose it, because if you don't understand then you can also be consumed by web / blog reviews that are actually one of the people the broker itself to promote the broker.

So that many lay people in the Forex world who finally feel disadvantaged.  How do you choose a good forex broker? The easiest way is to ask or ask for recommendations from friends who are experienced in forex trading.

Well, below the basic criteria for a good and reliable forex broker you must know:

1.  Facilities For Forex Brokers Facilitate And Fit Your Needs

Well, here is the broker, which is about the services or broker of facilitating traders. The first time a trader will glance at a broker is certainly interested in the offer from the broker.

In general, traders will judge Brokers if they provide:

  • Leverage starts from 1: 100, 1:200, or maybe 1:500. Leverage that is too high to thousands can be dangerous and results in bankruptcy quickly; but if it is lower than 1: 200, it will curb you when you open a trading position.
  • Low spread, the closer to zero is better.
  • Demo forex account, which is a trading account that can be used to try broker platforms and services for free without the need to make a deposit first.
  • Various deposit and withdrawal methods, ranging from Bank Wire (bank transfers) to e-payments such as PayPal.
  • Forex trading platform that is easy to download and use. In general, world forex traders use the Metatrader (MT4 or MT5) . However, if the broker provides a different platform then it doesn't matter; provided the price data can be obtained smoothly, fast order execution, complete technical analysis tools are available, and you can use them proficiently.

2. Clear Broker Identity

A good forex broker has a clear track record, starting from when it was established, what company was sheltered, to where the office was located.

A good forex broker should provide a complete communication medium, ranging from chat, email, telephone, to the office address. Conversely, you need to be careful when finding a forex broker with an address only in the form of PO BOX or precisely the address is ambiguous location.

3. Verifiable Broker Regulation Status

Regulated brokers are often considered better than unregulated brokers, even though there is not 100% guarantee. Regulated Brokers means that they have obtained a license from certain financial regulators.

A good forex broker must be subject to the rules and supervision of a financial regulator in the country where the forex broker is based or operating. For example:

  • In UK, forex brokers need to get a license first from the Financial Services Authority (FSA).
  • In US, brokers must be registered with the Futures Commission Merchant (FCM), Commodity Futures Trading Commission (CFTC) and become members of the NFA.
  • In AUS, forex brokers need to get a license from  Australia Securities and Investments Commission (ASIC),
  • In Cyprus, the regulation of forex brokers is under the authority of CySEC. However, law enforcement is only of medium quality.

Usually, brokers will state the regulatory status on their site. However, sometimes there are entities claiming to be regulated in a country, even though that is not true.

Therefore, you need to do a crosscheck on the relevant regulator website to ensure the truth. You can access the complete list of regulators and links to each site on the List of Forex Broker Regulators.

There is nothing wrong if you deliberately choose an unregulated forex broker, because there are not a few numbers of brokers who turn out to be reliable.

However, you should avoid forex brokers who actually commit fraud regarding its regulatory status.

4. Communicative Customer Support (fast respond CS)

The broker's commitment to providing support at least 5 days a week, must be the main requirement. The more complete the communication method like email, telephone, and chat will be better.

Live support (chat) facilities can really help us, when we need assistance to overcome technical problems when trading forex. Quality of support and response can vary between one broker and another broker, so be sure to test them before opening an account. 

Here are tips that you can try: Make a few questions about any forex, then tell them, can be via email, chat, or telephone,  then see the speed and quality of their response.

Indeed, pre-sales services are usually better than post-sales services. So, we just take it for granted, if pre-sales services are already disappointing, especially later when you become a customer.

Some of the features mentioned above are the basic criteria that are usually needed by forex traders in choosing brokers.

However, you can have your own needs because of that, when choosing a forex broker, also pay attention to its features.

If you do not find a service or offer that suits your needs after reviewing a broker, then look for another forex broker that is suitable for you.

If you are still confused with the basic criteria in choosing a broker, you can read this other blog article which is about "Types of forex brokers that traders must know and how to choose it?".