It is crucial to select the right forex broker for a more successful forex trading experience. Here are some features you can look out for.

Whether you’re just starting out on your trading journey or in the market for a new broker, it’s important to consider your trading profile when deciding on a brokerage to open an account with. This means listing your habits and needs as a trader and seeing if any potential brokers meets those needs. Are you a scalper with a need for speedy execution and low spreads? Or perhaps you’re of the Muslim faith, and require an Islamic trading account. Or maybe you wish to trade commodities in addition to forex. These are all considerations to make before you open an account with a brokerage – here’s our guide to what to look out for.

The Cost Of Trading: Spreads, Fees, And Swap Rates Provided By The Forex Broker

When picking a forex broker, one should definitely look out for its cost of trading. forex brokers usually profit through commissions or spreads (difference between the prices which forex is bought and sold at).

Fixed spreads are static and remain the same pip value regardless of the market’s liquidity or volatility, and are more suited to scalpers, or news traders that are looking to profit off the volatile periods of news releases. However, re-quotes and slippage are common with fixed spreads as forex brokers offering fixed spreads usually operate on a market maker model – and control the execution prices through a dealing desk.

Variable spreads can offer better deals in times of high liquidity (sometimes as low as Zero pips), or during periods when the market is calmer. Variable spreads arising from No Dealing Desk executions also mean that forex traders get faster results and greater liquidity as a counterparty can come from various sources. This also reduces the need for requotes, or the frequency of slippage. However, variable spreads can sometimes run high, and may spring surprises like setting off stops and limits during times of volatility. Hence, as a forex trader, it is important to figure out the kind of forex broker which functions in a way that complements your style of trading forex. Besides spreads, most forex brokers do not charge extra fees.

For forex traders that tend to hold their positions overnight, it’s important to also consider the swap rates based on whether you are earning or paying an interest. PU Prime, for example, offers competitive rates that keeps overnight fees low.

Some forex brokers also offer incentives for opening or funding an account. These can be bonuses on a percentage of your deposit, or even a flat bonus for just opening an account with a broker. Both help to increase your margins and act as additional capital for your trades. 

Adequacy Of Investor Protection Provided By The Forex Broker

Another important thing to look out for when picking a forex broker is whether or not it offers adequate investor protection that includes protection of a forex trader’s own funds, and regulation by the appropriate agencies.

While financial regulation differs from region to region, most top-tier authorities will, at the very least, mandate that forex brokers segregate client funds. This means that the money a forex trader puts in will be kept separately from the forex broker’s funds and not using its own operational costs. This offers protection for one’s money in the event of any unforeseen circumstances, for instance, if your broker goes into liquidation in the future.

It is also worthwhile to note that there are some forex brokers that offer an extra layer of protection through periodical audits conducted by external parties, like PU Prime. You can check out the different types of trading accounts PU Prime offers here.

Regulated by the Seychelles Financial Services Authority (SFSA).

Services Provided By The Forex Broker: Account Types, Client Support and Tools

Most forex brokers offer 24/5 support as forex trading takes place in every hour of the day. As there is so much to navigate in the world of forex trading, it is important to look out for a responsive forex broker. Receiving responsive support from your broker is not just invaluable when faced with technical issues as it can also provide forex traders a sense of assurance.

It is also worthwhile to look out for forex brokers that provide comprehensive educational materials – like informative articles, video tutorials, or even e-books, to supplement your knowledge in forex trading.

For the more experienced traders, you might also want to consider the kinds of trading tools a forex broker provides, whether it’s the range of order types, the option for social trading, analysis tools, or a demo account.

Depending on your trading needs, you might want to look out for whether a broker offers multiple account types. For instance, if you prefer to trade often and in large volumes, you might want to consider one that offers accounts that charge a commission and low spreads, as opposed to no commission and higher spreads. On the other hand, if you are looking to trade extra-small volumes in order to test a trading strategy, you might want to check if the forex broker does offer a Cent Account.