According to reports published in 2019, more than US$5.1 trillion is invested in the forex market annually. Considering the scope of the market and leveraging on the technology, several online forex brokers have mushroomed in recent years. Thus, choosing a broker has become a daunting task. The only effective solution to this seemingly cumbersome yet essential task is to read forex trading reviews.
Forex Trading Reviews: What to Look for in a Broker
One can find numerous forex trading reviews on online brokers. However, not all reviews are written with the highest order of integrity and objectivity. So, the first thing to do is to identify a website that offers detailed forex broker reviews.
Here are some essential tips on what to look for in a broker review:
It is always safe to invest with a broker accredited by the local regulating agency. Unregulated brokers may provide better deals, but your money is not secure with them. You cannot approach any regulating agency for cheating or fraud by an unregulated broker.
Different brokers provide different leverage options. Look for high leverage. According to experts, a 100:1 leverage limit is more than enough for an average trader. Higher leverage certainly attracts you to invest a larger amount and consequently leads to higher risks.
Not every forex broker deals in all currency pairs. Find a broker that provides good deals for the currency pairs that you are most interested in. Make sure that the broker offers a good range of currency pairs so that you can expand your trading in the future.
Most of the trading occurs through dedicated trading platforms specific to every broker. Compare different trading platforms for user-friendly interface and online support.
For short-term traders, spread plays a determining role. Choose a broker that provides spread range between 2 to 3 pips for the currency pairs in which you are interested.
An effective way to choose a forex broker is to follow a flow chart pattern. Prepare a list of all the popular brokers. Read reviews written by experts and users and shortlist the best three. Now create a demo account with the brokers and compare their services. By following these steps, you will be able to make a smart choice of forex broker.