Forex trading has become a common and passive profession worldwide. As a result, many people are participating in the currency market almost every day.
Therefore, many novices in the forex market are facing a lot of confusion in choosing a Forex broker. And in the end, due to lack of knowledge often do not choose forex broker appropriate for them.
These are the 8 key factors when choosing a broker-Forex
1. Regulations
Maybe it's starting by looking at whether the broker you choose has a license and regulatory approval SA.
Market regulators to protect investors against fraud or fraudulent activity on the corridor.
They also provide supervision of brokers registered with them, ensuring fair conditions of trade, transparency, accountability by the intermediary of any problems between the client and the broker.
In South Africa, the body control market Conduct Authority of the Financial Sector (FSCA) supervises and regulates the activities related to market financial institutions operating in the country. For novice trader. A deposit bonus is very handy.
international regulators as the main markets of the UK FCA, ASIC in Australia, CySEC Cyprus - all doing the same to protect the interests of investors by regulating the market.
Some brokers show their offshore regulations and registration of their clients under the rules, that is not good enough to ensure adequate funds or good trading conditions protection.
In most cases, you will find information about brokers' regulations on their website in the footer or on your registration page. Always ask your agent for its FSP license number before investing.
Most regulators, including - FSCA have a general search where you can search by entering the name of an agent or broker license number FSP them.
There are about 100 + FSCA regulated brokers that offer forex and CFD for the retail traders in a regulated environment.
2. Investor protection
This is an important consideration, and to ensure that their funds are deposited on the platform of the corridor where he will be safe. In bankruptcy or worse event manager of similar cases, the risk of an investor is limited.
The amount of protection offered is often pre-defined and limited.
For example, in the US, the number of investor protection is up to $ 500,000, while Europe generally € 20,000. This protection is usually offered by the Funds protection of investors or state some independent insurance providers.
South Africa has no funds to protect investors backed by the state at this time. However, some FSCA regulated brokers can still offer some protection.
For example, HotForex (IC Markets SA Pty Ltd) are regulated by the FSCA has insurance program liability for the protection of investors to the limit of € 5,000,000 in terms of risks to errors, omissions, negligence, fraud - that it can cause a financial loss for the corridor. Brokers often display this information in the 'security fund' on its website.
Another important factor to ensure the safety of the funds is - if your broker has a separation of customer funds operating needs of the company. This limits the corridor for the use of funds deposited by the client's capital needs.
3. The fees for trading and non-trading
Before opening an account with a broker, you should check always pay trading fees for the broker, and if any maintenance fees or hidden.
Most brokers earn a profit by charging a fixed fee or fee per transaction volume. This is known as the spread.
Some brokers may charge lower margins, but they can charge other fees for non-commercial inactivity charges on deposits and withdrawals, the costs of maintaining the account, etc., which causes higher total cost.
In addition, some brokers increase their deployment during high volatility. Therefore, analyzing the overall cost of the different trading platforms and make sure you go with a broker that offers the lowest spreads and commissions batch on the instrument you want, without other hidden costs.