Foreign currencies can provide a profitable trading opportunity for investors. Whether you are a novice or experienced trader, you will need a Forex broker that offers reasonable spreads, provides access to the currency pairs that you want to trade, and has an intuitive trading platform that you can access. You should also ensure that they are FCA regulated and that they provide accessible customer service communications.
Different countries have different regulators so the Financial Conduct Authority (FCA) acts as watchdog and regulator for Forex brokers in the UK, while BaFIN act as regulators in Germany. Brokers that are regulated by the FCA must meet certain standards and regulatory requirements, including the need to keep client money completely separate from their own business money. Compliance provides a degree of guarantee that your money is safe, and that the broker is held to a certain level of standard so that you can trade safely, knowing that you are protected.
Commissions And Spreads
Most brokers do not take a commission on Forex trading, but make their money on the spread, or the difference between the buy and sell prices. However, this isn’t the case with all brokers, so do bear this in mind when comparing services. If you pay a commission, and your broker offers anything other than short spreads, then you could be paying more than you need to for every one of your trades. Conversely, don’t overlook those brokers that do charge a commission, because some like FXPro, can provide 0 pip spreads on the most liquid currency pair markets.
It is feasibly possible to trade almost every currency in the world, which means that there are hundreds of currency pairs to choose from. However, most traders will specialise in one or a small number of currency pairs in order to have a better and deeper understanding of the market that they are trading. Whatever currency pair you specialise in, ensure that the broker you sign up with offers this pair. Also, if you are relatively new to trading, then bear in mind that you may wish to expand into related but different pairs in the future so consider surrounding pairs as well as the specific pair you want to start trading.
You will be using the trading platform every time you make a trade, and also whenever you research prices, check spreads, fund your account, and perform a range of other trading related tasks. If you find the trading platform difficult to use, or even if you simply don’t feel comfortable with it, then this can have an adverse effect on your trading. Use any demo accounts or trial offers to evaluate the trading platform and ensure that you are comfortable and happy with it.