How to look for an online broker (forex)
Things to look for when looking for a good online broker
- Compliance to the law.
- I don’t personally look for the cheapest. Because most of the time, what you pay is what you get. You pay little, most of the time, you’ll get low quality product and/or service.
- I look for a solid good one, which is compliant to the law (in each country it has present in), this way, they won’t take your hard earned profits.
- There are instances in which broker do nasty things to take away our profits
- closing long trade profits
- create a broker specific spike closing our short term profits or worse, closing what’s been profitable trade into a nil profit or worse, a loss trade
- the worst is, literally taking money from our accounts (I have seen this when I looked for a good reputable online broker in FCA broker check)
- Size matters. I personally look for a large one (The broker must be present in (and comply to) large western countries ie UK, US and Australia). Again ,it won’t be the cheapest (cheapest fee or thinnest spread) but this way;
- It has enough liquidity to enter and exit freely. Once you gain sufficient experience, this is crucial. It is less important in forex but very important in stock.
- It will be more accommodating in terms of providing a large varieties of forex pairs, cfds, etc that you want to trade on.
- They will have more (more people and more ways to) and faster support to you (when trading forex, it does count a lot)
How to check for compliance:
I check the broker in all 3 countries (US’, UK’s and Australia’s) regulators.
Recommendation is IG – highly recommended.
The reasons IG is recommended:
- Compliant. I did not see in FINRA, FCA & ASIC any notes, this means to me that IG is relatively safe. It did not have any notes of taking people’s money (literally out of the account), churning people’s money for over trading. So IG is safe in my opinion. And I have been using since around 2015 and it’s been very good.
- Accommodative. It can list a foreign stock if you request them to do so.
- Prompt service. I called, chatted, requested for IT help, they promptly resolved my queries.
- Reasonable thin spread on majors (major forex pair)
- Zero fees on forex trading
- Reasonable charting and online trading platform.
- (I won’t cover stocks but it provides shares (Australian and US) at relatively low fees – a plus for most people)
If you open a CFD account (can trade forex) with IG and make 5 qualified trades within 6 months of opening the account, you might receive $150 from IG.