How to Choose a Forex Broker

How to Choose a Forex Broker

This article aims to analyze the elements which are important to consider when choosing a Forex broker. With so many different Forex brokers to choose from nowadays, it is essential that you select the best one to help give you the edge in this fast-paced trading environment.

1) Regulated & Fund Security

It is essential that the broker that you opt to trade with is regulated. This means that should anything go wrong at anytime you will have more protection than if you are with an unregulated provider. Check out on the ASIC if the Forex broker is regulated. There are so many scams on the internet that you can never be too sure. Vantage FX is an Australian based Forex broker, regulated by the AISC. Vantage FX keeps client funds segregated at the AA rated National Australia Bank. The Australian government guarantees all NAB deposits.

2) Trading platform

Chose a broker whose trading platform you like and are comfortable using. This often just comes down to personal taste. Vantage FX offers its clients a broad spectrum of platforms, ranging from web based, downloadable, mobile apps. Furthermore, they also offer their clients the MT4 platform, which is considered the industry standard, but also MT5 and the corresponding mobile platforms. Within this extensive suite you are guaranteed to find a platform which is suitable for you.

3) Spreads & Execution

There is absolutely nothing wrong with searching for a broker that provides very low spreads. In fact it’s a good thing to do considering the spread is a principal cost in trading. The lower the cost the more potential profit. Do however watch out for marketing gimmicks. You may see a low spread advertised but that doesn’t mean you will always get that low spread.

Raw ECN brokers provide by far the best spreads. Vantage FX is one such broker, where their pricing feed comes directly from leading liquidity providers and banks. This feed can come from as many as 70 institutions meaning that a low spread is a given. There is a small commission fee that must be paid which is low compared to other brokers (and easily compared!).

Furthermore, execution is also much faster using an ECN feed. This is hugely important, because if you have slow execution then your position could easily lose a pip or two. When you multiply this across all your trades, that is a lot of pips to lose!

So, it is not just a matter of tight spreads. You must consider spreads, commission charges, execution spread when you are considering the costs of trading.

These are just the basic points which need to be considered. There are also many other considerations to keep in mind, such as account types, leverage available, education package, customer service attention, different markets and pairs available, no dealing desk, straight through trading and allowing for your trading strategy even if it means scalping.