Many people and forex companies opt to deal with brokers instead of dealing directly with the companies. Brokers are better placed when it comes to understanding the needs of their clients and what the forex companies expect from them. Their specialty is in risk management and everything else concerning forex securities which places them as the best choices for clients as well as agents for the companies or financial institutions dealing with foreign exchange. One such firm is Rakuten Securities Australia which offers the best CFD and forex brokerage services. Being one of the top licensed and regulated brokers in the world, Rakuten broker understands everything about the trading platforms and everything else they can affect your sound judgment when it comes to trading. Before choosing any broker, you should, however, ask yourself a few questions.
What makes a good forex broker?
The number of forex brokers is vast and choosing which one to go with can be a daunting task, there are however factors to look at before you decide which brokerage firm or which individual broker you need to transact your business. These are:
The first most important thing to find out before you choose a broker is to confirm whether your choice is operating legally. Find out he is legally regulated to operate by the right authorities like the ASIC, NFA, CFTC, FCA and other national securities. This will give you peace of mind knowing that your broker is acting within the stipulated laws and your investments will be safe.
Being legally regulated also means that the brokerage firm undergoes regular and periodic reviews and audits which makes them comply with all laid down standards in the forex trading industry.
* Type of platform they offer
The forex global market has many different kinds of platforms. Before you choose your broker, its good to find out what platform they use. The most common platforms are the web-based platform, the ECN/STP platform and the MT4 platform. The best platform by far is the MT4, so look for a broker that offers that. This is because MT4 is used widely all over the world and compared to other platforms, it has offers more benefits.
* Features of the broker
It is important to find out the features of the broker you plan to work with. There are three distinct types of forex brokers. The market makers, Electronic Communications Network broker (ECN) and the Straight Through Processing (STP) forex brokers.
Market makers buy and sell securities to make a profit. He acts as the middleman between banks and other brokers and still manages the unders and overs of each pair of currency from traders. Brokers that are not true to their calling can manipulate their distribution to benefit themselves.
Straight through processing forex brokers pass their clients orders directly to the liquidity providers immediately they receive them. He does not filter the orders through any dealing desk. This cuts down on any delays and costs. Many of the STP brokers have a large base of liquidity providers. These range from banks, investment corporations, hedge funds and other brokers.
ECN or Electronic Communication Network broker links clients with bigger liquidity providers. This linkage uses an advanced technology setup known as FIX Protocol. A good example of an ECN broker is Rakuten broker. The brokers use all existing online avenues even after normal working hours to get the best services and available prices for their clients. The broker earns his fee or commission after every successful transaction.
* Debit and credit rollovers
Check if your broker offers the credit and debit roll over interest before engaging them. Some of the brokers in the market will charge rollover fees irrespective of what direction you want to choose for your trading. Look for a broker that does not charge additional charges or rollover fees on what you choose to do. Remember the rollover interest fees keep changing and sticking with one that charges means you have to top up what you pay often.
The above factors are just but some of the few traits to look out for when in search of the best broker. If you want to succeed and make profits, you have to choose wisely and not forgetting that there are very many scammers out there too.