It's time to choose the first broker

Forex broker once! Beginners who have only little experience in trading on virtual funds eventually have to face the choice of their first currency broker and face a number of doubts and dilemmas. This is completely natural because no one is born with perfect knowledge of it. Little experience means that you do not know what to pay attention to and what is not important. I hope this article will help you make the right choice.

Credibility of the forex broker

Security of funds is a fundamental element that should be taken into account at the very beginning. All companies with a dubious reputation should be eliminated from the list first. A broker is a financial institution that not only has your funds, but also stores personal data and documents and is to mediate in transactions concluded on the market. Therefore, it should be supervised by the regulator in the country in which it is registered. You should check whether it has the appropriate licenses and what country it is. Surveillance of the British Virgin Islands does Mauritius they don't sound very credible. I do not want to evaluate the way they work, but the fact is that the requirements to be met to obtain a license in the so-called tax havens are much less restrictive, and the legal system itself is more liberal. Consequently, it is easier to both open and close this type of activity. The quality of service provision can therefore go hand in hand with this ease.

FOREX BROKERS - ALWAYS CURRENT LIST OF OFFERS

It is also worth looking at the opinions on several online forums regarding the brokers of interest to us, where investors comment on their offers. I wouldn't take all opinions as sacred truth because we never know who wrote them. It can be both unfair competition and a very inexperienced player. However, several dozen similar opinions should not be accidental.

Transaction platform

The application on which we will analyze and conclude transactions must meet our expectations. We must be able to move around it, we must like it and have the tools we want to use in trading. If you plan to use non-standard machines or indicators, find out if it supports them. If you care about the speed of operation, check it at many angles, for example by loading multiple charts or adding a number of indicators.

Financial instruments

Forex brokersin addition to standard instruments like currency pairs, they often offer other things like CFD on company stocks, indices, agricultural commodities or precious metals. Even in the currencies themselves, there is a big gap. Some offer 20 basic ones, while others offer well over 50 pairs. You need to define what financial instruments you will need to trade. Are the so-called majors (8 major currency pairs) or you also need more exotic currencies or stock indices from the USA and Europe. Sometimes beginner traders choose an inferior broker just because they offer more instruments, and then find they only invest in the three major currency pairs anyway. It's not necessarily a good decision.

Transaction costs

This is one of the most important features of a broker. The total transaction costs, i.e. the offered spreads and any commissions, are the main cost we incur when concluding transactions on Forex market. With many transactions throughout the year, it can have a significant impact on our financial result. The lower the cost the better. Compare transaction costs between offers on the instruments you plan to play. Then try to estimate the number of transactions per year and you will see for yourself how important it can be.

We should pay particular attention to swaps when we plan to make long-term transactions. In the short term, they will not matter much.

Payment and withdrawal costs

The costs of deposits and withdrawals are important. Important but only for two groups of investors:

• those who often make deposits or withdrawals,
• those who operate a very small deposit.

Fund transfer fees can represent a large total cost when they are made on a regular basis with high frequency. In such a situation, therefore, special attention should be paid to it. Also when you operate a small deposit and the fee for it is high, you should think about the sense of opening such an account. So what if the broker offers an account from $ 100 if the commission and the payout will be $ 20? It is different if we treat this account as a test "for losses".

In other cases, the cost of deposits and withdrawals is a tertiary matter. The most important aspect is the transaction costs charged by the broker. If we make a withdrawal once a quarter, it may turn out that even a large commission when withdrawing capital is irrelevant because the broker offers much lower transaction costs than a competitor and as a consequence we will save a lot more.

Practice shows that investors often pay too much attention to the costs of withdrawals. Then they withdraw funds less than once every six months, thereby overpaying on transaction fees.

Service quality

Good contact with the broker is very important. Professionalism and quick problem solving results in spiritual peace and mental comfort in a situation when there is a failure or other crisis situation. Reliable provision of information without unnecessary eyes making and confusion is equally important and it is worth checking with several questions to Support.

T-8c

A very insignificant advantage that is often exaggerated. I invite you to read separate articles on this topic.

• Is PIT-8C so important?
• Taxation of Forex Income - Part 1
• Taxation of Forex Income - Part 2
• Taxation of Forex Income - Part 3
• Taxation of Forex Income - Part 4. What about cryptocurrencies?
• How to easily settle a tax on a foreign broker [VIDEO]

Training and courses

Educational activity is important and was undoubtedly a great asset in the past. This has become standard nowadays. Free training and Webinars organized by companies on the basics of technical analysis, platform operation or even more advanced Harmonic TradingThis is no longer an advantage in fundamental market analysis. This is something the broker has to offer to be competitive with the rest. Let us not be tempted by his offer only because he will offer us free training - let us require him to want to educate us at least in the basic scope. After all, it is on commissions from our transactions that he will earn.

Forex is such a broad field that we will eventually have to pay for the education of companies specializing in training or examine more advanced issues that interest us. Learning to invest is hard work, which you have to do mainly yourself.

Additional promotions

Brokers tempt with their promotions, however, not all promotional offers are as good as they initially look.

READ NECESSARY: Broker bonuses - watch out for promotions!

Always read the terms and conditions of the promotion carefully. Bonuses are usually subject to additional criteria, while commissions reductions are usually of a temporary nature. You have to estimate which offer will be more beneficial for you, taking into account your deposit and the way you invest.

Language barriers

Currently, there are many forex brokers on the Polish market, but there are even more of them on foreign markets. The competition is therefore even more intimate, and this may be followed by an even better quality of services. If you do not know a foreign language (usually basic English is enough), you do not have to worry and delete these companies. It is worth asking if the foreign broker offers help in Polish. If not, does it have any Polish partners who will be able to help us with a possible complaint or opening an account.

Summation

Keep in mind that there is no perfect broker on the market. If there was one, everyone else would go bankrupt. One broker may be good for investor A, and another will be better for investor B. It all depends on the requirements, capabilities and individual preferences of each trader. Sometimes you have to make a compromise and decide on a higher commission to have access to a better platform. If we really care about a given type of training, we will have to choose a company that offers a smaller number of instruments.