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Forex trading now has become a common profession across the world. When it comes to Forex trading then you have to choose a Forex broker that meets your expectation. The regulations, commissions, platforms, minimums, and account fees are just some of the factors to consider when choosing a Forex and CFD broker online which you have to watch when choosing a broker. The foreign exchange market is the largest financial market in the world, with a turnover of over $ 4 trillion a day. Despite its enormous size, this market does not have a central exchange allowing traders to carry out their transactions. Instead, Forex traders must conduct their trading activities through an intermediary, the Forex broker. This shows the importance of the broker's role in the negotiation process. When it comes to choosing a regulated broker, traders literally have thousands of Forex brokers from which to choose on the internet. But the real question is how you can be sure the broker you have chosen is right for your business needs. To assist you in your broker selection process, we have prepared a guide with a list of key factors that you should consider when choosing a broker. Regulations The first thing to consider when selecting a broker is whether it is regulated by a competent regulator (to learn more about the regulation of Forex and CFD brokers). By doing business with a regulated dealer, you can be assured that they have met the operating standards set by the regulator. Some of these standard regulatory requirements include adequate capitalization and separate accounts to protect client funds. In addition, the regulation provides protection for the fund in the event of the company's insolvency and ensures that the broker meets rigorous standards as a financial service provider. Countries with financial regulatory agencies backed by strict enforcement include: Australia (ASIC) Eurozone (Mifid and local regulators) India (SEBI) Japan (FSA and JSDA) Switzerland (FINMA) UK (FCA) USA (CFTC and SEC) Trading platform and software Because the trading platform is your gateway to the marketplace, you want to make sure that the trading platform you use is reliable. Most brokers will offer traders a selection of trading platforms to choose from. Most of the time, trading platforms are provided by third-party trading solution providers such as MetaQuotes Software. Some brokers have also begun to develop their own trading platforms to try to differentiate themselves from other brokers in the industry. Often, these proprietary platforms are the best trading platforms because they are specifically designed by the broker's clientele. Nevertheless, a good broker should be able to provide a good selection of platforms. Indeed, some traders prefer to trade from the desktop and some traders prefer to trade from their smartphone. Additional features Examine the features offered by trading platforms. Do they come with: The complete package of cartography Wide range of technical indicators One-click trading on the trading platform Risk management tools such as stop loss order and leak stop. Although all these elements may seem innocuous at first, they will later play a crucial role in enabling you to experience a transparent and productive trading experience. But when it comes to choosing a platform, it's really a matter of personal choice. Most of these platforms will have the same basic functionality. The best way for you to find the platform that suits you is to try them with the demo account provided by the broker. For brokers who do not provide a demo account, they may not be newsworthy. Commissions and spreads This market, unlike other traditional financial markets, operates primarily on spreads rather than commissions. This is the reason why most brokers advertise that their services are without commission. So, how do brokers earn money? Simply, they earn by charging the traders. The spread is the difference between the purchase price and the selling price. For example, if the Bid & Ask price of the EUR / USD currency pair is 1.0875 / 1.0878, it means the spread is 3 pips. As a Forex trader, you will encounter 3 types of trading cost structures charged by a broker: Spread fixed - when the spread does not change and you know the amount of the spread before trading. Floating spread - This spread is variable and constantly varies according to the volatility of the market. Commission Fees - These are calculated as a percentage of the Broker Margin. You must be aware of the amount to pay before negotiating. As a general rule, for traders looking for transaction costs with certainty, fixed spreads will be favored. Traders looking to pay a smaller spread would prefer floating spreads. In the end, the best choice will depend on your specific business needs. The type of spread you will receive will depend to a large extent on the type of business model on which the broker operates. The business model of the broker During your search for a broker, you will encounter terms such as "STP", "ECN", "NDD" and "Market Maker". All of these terms are actually used to describe the business model used by the broker. So what do they all want to say? There are two main types of brokers: the trading desk and the non-trading office. Dealing Desk Forex or Market Maker traders process their clients' trading instructions through a trading desk within their company. A transaction broker takes the other side of the transaction, which means that when you open a position such as EUR / USD, the transaction will be executed by the broker and they will then be exposed to this transaction. Non-Dealing Desk A non-trading dealer (NDD) transfers the transaction directly to a third party. There are two types of NDD broker (ECN and STP). They are both essentially the link between you the trader and the market maker or the reseller. ECN With the first type (ECN) when you press "Buy" on your trading platform, your trading orders will be processed on the broker's computerized trading system and transmitted via the Electronic Communications Network (ECN) without a trading desk. the trading term "non-trading office" (NDD) comes from). STP With the second type of NDD broker, upon receiving your transaction orders, he will forward them directly to another party for execution by the market maker's trading desk. In this case, the broker is called Straight Through Processing (STP) broker. Forex brokers ECN and STP are both intermediaries to several trading desks or market managers in the global Forex market. Market makers or traders will transmit their prices to the ECN or a third-party liquidity provider with the volume for which the quotation is valid. Why is it important? The broker's business model is important because it will affect the type of spread you will receive and whether the spread will be fixed or variable. Forex Broker for Beginners For beginner traders, look for brokers with the following qualities: Comprehensive Educational Resources on Trading - Many brokers provide a variety of educational materials to help traders master their skills. These usually include webinars, videos, courses, guides, and articles. Unlimited access to the demo account for professional traders - most Forex brokers, if not all, provide demo-trading accounts to their clients. This is especially useful if you are new to the world of Forex trading or if you want to test a broker's platform before trading for real. User-friendly trading platform - there are a variety of trading platforms on the market, some more complex than others. As a novice trader, you do not need a complex platform with features like EA and complex trading strategies. This comes later, but you should now look for a quick and easy platform to grab. Forex Broker for Professionals For professional traders, their trading needs differ considerably from those of a novice trader. Generally, professional traders prefer brokers who can provide them with: Comprehensive Trading Tools - As a professional trader, you will now need several tools, including a commission calculator, an economic calendar and, of course, complex real-time charts to implement trading strategies. Strong leverage - not for sensitive souls, professionals will seek to use this leverage to multiply their capital. Leverage increases the risk and also increases the reward. Low spreads - if you trade a lot, you want to make sure your spreads do not eat away at your capital. It is important to check the spreads to pay before choosing a broker. In general, the higher the type of account you use, the lower your spreads. Forex broker for day trading Generally, for a day trader, most brokers will be able to meet their trading needs. However, given the shorter period with day traders, it is preferable that the broker be able to provide a range of different instruments for the day trader to look for trading opportunities. These may include a signal service, tools such as an economic calendar, updating market news and results reports. As you will probably place more trades in the short term, make sure you know the spreads before trading. Forex broker for Scalping Scalpers are traders who occupy their positions in the market for an extremely short period of time. Although they only hold a position in the market for a short period of time, the frequency of their transactions is higher than that of the average trader. Their goal is only to make a small profit on all the trades they do, spread over a large number of trades. Note that not all brokers allow scalping. As such, if you intend to trade as a scalper, you should always check with the broker that you intend to register if it allows scalping. Types of account The majority of the sector's foreign exchange brokers offer traders a selection of trading accounts to suit different traders' categories. Micro Account - The smallest trading account type is the Micro trading account where a transaction lot equals 1,000 units of the traded instrument. Mini Account - The following trading account type in the hierarchy is the Mini account where a lot represents 10,000 units. Standard Account - The standard account is a lot equal to 100,000 units. With Micro and Mini accounts, only a low minimum initial investment is required for you to start trading. With the standard account, although the minimum investment may vary from one broker to another, you will generally need more trading capital. Given the different minimum investments for each type of trading account, you must select the trading account corresponding to your investment capital. Customer service Most novice traders tend to forget to consider customer service when choosing the broker with which they will sign up. They may not realize the importance of customer service in their overall business experience. With customer service, it's not about whether you'll ever need their help, but about when you'll need their help. Because no matter the experience or the knowledge of a merchant, it will always be necessary to appeal to the customer service. At this point, you want to be able to contact the support team without any difficulty. It is therefore important to check whether the broker you intend to register with is able to provide you with reliable customer support. Check if there are multiple ways to contact customer support. Most brokers will provide their customers in several ways, such as email, live chat and phone, so their customers can contact customer support. Value-added services In a sector as competitive as online trading, some brokers will try to differentiate themselves from other brokers by offering additional value-added services such as free market analysis, news feeds and trading signals. Most of these value-added services are provided free of charge, but some brokers may require you to deposit a minimum amount before you can access these services. Questions to Ask the Broker How can I choose a broker? We are here to help with that! Check out our list above and choose the most appropriate broker for you. Should I choose a regulated broker? Yes, you should try to choose a regulated broker with whom to work. This guarantees recourse in the event of litigation or insolvency of your broker. Remember that by using a regulated broker, you will also have access to an investor compensation fund, which ensures your deposit up to a certain amount. What should I look for when selecting a broker? You should consider the range of platforms offered and even ideally test the platform you want to use. Take a look at the additional resources offered by this broker, for example. Signal service, educational tools, copy business. Finally, do not forget to inquire about spreads and types of accounts before depositing a deposit. Conclusion As noted above, many factors must be taken into account when choosing your broker. Nevertheless, with the help of this guide that we have provided, you should be able to see which broker is best suited to your needs. To further facilitate your search, we also conducted extensive reviews and verified each broker on our list of recommendations to ensure it met the required standards. Once you have found the right broker to work with, you can focus more on your trading activities and trade more confidently, increasing your chances of succeeding in the market.