What to look for when choosing a Forex broker
- Thread starter FP Markets
- Start date
reliability is a big issue when it is time to choose a broker , in practical its a hard task , because right now most of brokers are found to be scams.
I think it is okay to be choosy when you are looking for a trusted forex broker. I was also very picky when doing so. I took the facts like, easy availability, reliability, safety of the account, and quick withdrawal process as my key factors on the basis of which I found some good brokers to continue trading with. I would also suggest you select a broker that can even help in increasing your knowledge about forex.
There's a thin line between good and bad brokers giving same factors you mentioned. It can acts as a reliable or delusional. That very thin line heavily counts on regulations.
Suggest to have brokers with strong and multi regulations, especially FCA UK and Cysec. But again, it's not easy as the word sounds, you can take these above factors into consideration with such regulated brokers. ICM, Hotforex, fxpro, fxview, icmarkets proved to be worthwhile in my personal experience.
Which type of broker should I choose? A dealing desk broker? Or a no dealing desk broker?
That’s completely up to you! One type of broker isn’t better than the other because it will all depend on the type of trader you are.
It’s up to you to decide whether you’d rather have tighter spreads but pay a commission per trade, versus wider spreads and no commissions.
Usually, day traders and scalpers prefer tighter spreads because it is easier to take small profits as the market needs less ground to cover to get over transaction costs.
Meanwhile, wider spreads tend to be insignificant to longer-term swing or position traders.
To make your decision-making easier, here’s a summary of the major differences between Market Makers, STP brokers, and STP+ECN brokers:
https://www.babypips.com/learn/forex/which-type-of-broker-should-i-choose
That’s completely up to you! One type of broker isn’t better than the other because it will all depend on the type of trader you are.
It’s up to you to decide whether you’d rather have tighter spreads but pay a commission per trade, versus wider spreads and no commissions.
Usually, day traders and scalpers prefer tighter spreads because it is easier to take small profits as the market needs less ground to cover to get over transaction costs.
Meanwhile, wider spreads tend to be insignificant to longer-term swing or position traders.
To make your decision-making easier, here’s a summary of the major differences between Market Makers, STP brokers, and STP+ECN brokers:
https://www.babypips.com/learn/forex/which-type-of-broker-should-i-choose
I personally prefer a non-dealing-desk broker. Here is why...
Market makers claims that they don;t have any conflict of interest with winning traders!
In a perfect world that might be true ...if they can match every buyer and seller internally then there is no risk to them and they won;t mind if you keep winning
But that is a BIG IF! and because of that possible conflict of interest there is a possibility of 'Bad behavior' by these brokers .. time and again we have seen it
You open yourself to the risk of 'conflict of interest'
But on other hand are there retail focused TRUE ECN/ STP etc like a true major exchange
Another big factor is client money safety
UK is better than AUS/ NZ/ USA
FX futures on major exchanges could be an alternative but you won;t get the leverage and granularity...! but on other hand you can do other things like FX Futures Options !
In a perfect world that might be true ...if they can match every buyer and seller internally then there is no risk to them and they won;t mind if you keep winning
But that is a BIG IF! and because of that possible conflict of interest there is a possibility of 'Bad behavior' by these brokers .. time and again we have seen it
You open yourself to the risk of 'conflict of interest'
But on other hand are there retail focused TRUE ECN/ STP etc like a true major exchange
Another big factor is client money safety
UK is better than AUS/ NZ/ USA
FX futures on major exchanges could be an alternative but you won;t get the leverage and granularity...! but on other hand you can do other things like FX Futures Options !
it depends, especially now a days where anyone can be a broker, but traders should just be smart about it, a good broker, good regulation, good reputation, and trading conditions should be very acceptable. there is no such thing as a perfect broker. thats a fact, but there are good brokers out there