For those starting forex trading for the first time, then the first step is finding a suitable forex broker. This decision is extremely important, as your forex broker and platform provider will impact your forex trading experience. Although at first glance, this task may seem overwhelming due to having so many different options, it is still possible to narrow your choices and pick one that is right for you. To make things easier, here are a few important factors to consider when you are deciding which forex broker to work with. 

Account features

When it comes to account offerings, each broker will have something different. This is why it is important to do your research on brokers you are considering before committing to them. There are four main elements to think about when comparing account features, these are: commissions and spreads, leverage and margin, ease of depositing and withdrawing funds, in addition to any initial deposit requirements.

• Commissions and Spreads: One way that a broker gets compensated for their service is by charging a specific percentage on the spread. The spread is the difference between the bid and ask of a currency pair. In fact, brokers that do not charge any commissions tend to have wider spreads. As always, it pays to know your broker gets compensated and what fees it requires. 

• Leverage and margin: Some brokers will offer their customers leverage in their margin accounts. Leverage is a huge advantage in forex trading, as it allows traders to magnify their trading positions for only a fraction of what it is worth. This means that those with little funds can still access a wide range of trading opportunities. However, bear in mind that leverage can also magnify losses as well. This is because the traders have to pay back the entirety of what a position is worth, not just their initial deposit. As always, be sure to use leverage with caution. 

• Ease of depositing and withdrawing: Every forex broker has a specific amount that traders can withdraw. Some brokers may allow their customers to fund their accounts via PayPal, wire transfer, credit card, bank check, or even a business or personal check. Sometimes, a broker may charge a fee for withdrawals. So always be sure to keep this in mind! 

• Initial deposit requirements: Most forex accounts do not need huge deposits, especially when leverage is utilised. This makes forex trading very popular with new investors and traders. Of course, the initial deposits required can vary depending on account type. So ask yourself whether going with a standard, mini, micro, or managed account is what you need. 

Customer service

As forex trading happens 24 hours a day, it makes sense that a broker should have customer support available anytime. This is a necessity for novice traders, who may find it hard to navigate their provider’s platform and need regular support. In this case, it may be best to give a quick call to a prospective broker. This will give you an idea of the kind of customer support they offer so you can better decide whether they are the right broker for you and whether you can work well together.

Currency pairs offered

While there are plenty of currency pairs that can be traded, only a few are extremely noteworthy and popular. These include EUR/USD, GBP/USD, JSD/JPY and USD/CHF currency pairs. While a broker can technically offer a huge selection of currency pairs, what is most important is whether they offer you any pairs that you are interested in. After all, it does not make sense to go with a broker that does not offer you the currency pair you want to trade in!

Trading platform 

A trading platform is essentially how a trader can access the forex market, making it vitally important. Therefore, it is essential that forex traders know how to use the platform and software, as well as their tools and features, such as fundamental analysis. Therefore, it makes sense to pick a platform that is intuitive and easy to use. A trading platform with a well-designed interface will have clear buttons indicating whether you are buying or selling, with some even having a ‘panic’ button that closes all your open positions. You definitely do not want to use a platform with a poor interface – as that can slow down your trades and lead you to make costly mistakes. The good news is that before you commit, most brokers offer demo trading accounts. This is a great way to practice your trading strategy and learn how the platform works without any risk. Always be sure to try before picking a certain broker and platform. 

Regulations and compliance

To keep yourself from falling for scams, an important element you need to consider is a forex broker’s reputation. For instance, you will want to check whether they are part of an organisation or are either accredited or registered. In Australia, a brokerage firm needs to have an Australia’s Security and Investment Commission (ASIC) authorisation. This license makes sure that all trader’s funds are secure and that the broker’s operations are completely transparent. The other main regulatory body to check for is Australia’s Prudential Regulation Authority (APRA), which oversees banks and insurers. Most of this information can be found inthe ‘About Us’ section of the website. If you are concerned about safety, you should make sure to only open accounts with brokers that are licensed and regulated. 

Educational tools

If you are a novice trader, this may also be worth thinking about. A few brokers do offer a variety of resources for their clients that help them learn more about forex trading. Check to see whether your broker offers webinars, tutorials, and videos regarding the essentials of forex trading, currency pairs, and certain popular forex trading strategies. The broker should also include a section teaching clients how their platform works, and how to customise it. Other brokers may even allow account holders to interact with one another through a social forum or platform, so they can share ideas and trade tips with each other. Learning from your peers can be a fantastic way of improving your own forex trading strategies.