Currently there are hundreds of forex brokers of various sizes offering their services to clients . It is very easy to use the forex market as a retail business to gain high profits by scamming clients. To avoid the troubles associated with the industry we advise you to work only with regulated, licensed firms.
Knowing the right questions to ask and doing the necessary research will increase your chances of choosing the broker that is best for you. Evaluate your provider with these important questions:
- Are you a registered company? Where are you licensed?
Reputable and trustworthy brokers are regulated. Regulators ensure that complaints and breaches of financial rules are advertised publicly. See our list of Regulators.
- Is the company a broker or a dealer?
Understanding the nature of a broker versus a dealer is important since there are currently a few different types of companies to work with for over-the-counter forex trading.
- How long have you been in business and how many clients do you have?
Brokers should be evaluated same as you would evaluate a bank before setting up a large savings account.
- Do you have good relationships with reputable banks?
Banks are more heavily regulated, which gives extra peace of mind, as well as financial security.
- How fast is the order execution?
With modern technology executions should be a second or less than a second.
- What are the costs?
There are three commission structures used by Forex brokers: fixed spread, variable spread or commission charge based on a percentage of the spread. Check which structure your dealer uses.