How to Pick the Right FX Broker for You

How to Pick the Right FX Broker for You

By Mateo Jarrin Cuvi

So you’ve decided to become a trader and join the countless others who earn a wee bit of extra income as a valued member of the Forex market.

Before jumping in, however, you need to pick a Forex broker you can trust and who will help you achieve most, if not all, of your trading goals.

With a myriad of options out there, this process may be easier said than done.

Don’t worry, though, as there are plenty of attributes, functionalities and benefits you should be on the lookout when picking the Forex broker destined to lead you to stardom.

We’ve decided to make things easier for you by putting together this checklist of sorts with what you need to know when making your choice.

Safety Above All

You want your money to be safe. That’s non-negotiable. Duh.

As succinctly put by Investopedia, “the safety of your funds and private information is more important than any other consideration when you open a forex account because brokers can get hacked or go bankrupt.”

Hence, you need a Forex broker that will do everything within its power to protect your pesos, care for your cash, safeguard your swissy, defend your dollars, you get the point.

For instance, FXPRIMUS provides its traders with up to 5 million Euros in professional indemnity insurance and safeguards their funds separate from the company’s so that in the unlikely event the firm runs into difficulties, your investment is protected.


Knowledge is Power (and Pizza)

Yes, you can find whatever you want or need online. That includes the A to Zs and 1-2-3s of Forex trading.

However, to facilitate your journey as a professional, amateur or part-time trader, it’s always good to go for a broker that has plenty of educational resources ready for you to devour.

You want a broker that has a large repository of materials that will teach you the basics of Forex trading and hold your hand along the way as you become a wiz at opening and closing positions.

Even as an expert, you should seek a company that will challenge you with insightful information and data and maybe surprise you by introducing you to a new trading strategy or two.

Pay close attention to the availability of webinars, live streams, videos, podcasts, tutorials, e-books, blog posts, in-person workshops (COVID-19 permitting), market news, economic calendars, chart readings (no, not of the astrological variety), etc. The options of educational materials are endless.

Most importantly, your broker should offer you access to a demo account at no cost whatsoever where you can hone your skills, apply new strategies and take a beating without actually putting your money at risk.

Execution, Execution, Execution!

There are many different kinds of brokers around, and how they execute your trades varies.

The most commonly available include Straight-Through Processing (STP), Electronic Communication Network (ECN) and Market Makers or Dealing Desks.

STPs do not need a dealing desk as all trades are sent to market makers, brokers, dealers, hedge funds or other investors, who then establish the prices (bid and ask) at which the trades are executed.

Simply put, under this model, the broker serves as an intermediary or bridge of sorts, connecting the trader to the liquidity providers.

Keep in mind that STPs can also be facing a market maker or a broker/dealer. In this case, settlement depends on the pricing and whether the broker (who can be a market maker) has enough inventory for internal crossing.

As the name suggests, ECNs use electronic communication networks to link traders to the market.

ECNs pick up ask and bid rates from a wide range of market participants, allowing them to provide traders with lower spreads and great transparency when it comes to information.

In simple terms, as explained by Investopedia, “an ECN broker only matches trades between other market participants” and does not “trade against the client.”

Keep in mind that using ECNs comes at an additional cost since this service involves higher fees and commissions than a regular STP.

At the other end of the broker spectrum you will find Market Makers or Dealing Desks.

Even though the automatization of trading has taken plenty of protagonism away from dealing desks, they are still around to make things easier for traders.

Dealing desks can act as both a Principal and an Agent vis-a-vis a trader’s order.

What does this mean?

As a principal, the dealing desk is basically competing with the trader by taking the other side of the order. So, either buying or selling against what the trader requested.

As an agent, on the other hand, the desk will find a taker for the trader’s order elsewhere.

So make sure you are aware of these differences and their many advantages and disadvantages before signing up with a broker.


The Costs of Trading

Nothing is certain in this world, except death and transaction costs.

Yes, keep an eye out for any fees you might be charged by your broker when trading or doing anything for that matter on the platform.

Generally speaking, most brokers make their money from the spreads they offer you as a trader.

As we know, there are two types of spreads available to traders: Fixed or Variable.

Fixed spreads are pre-set and do not change with the market, while variable spreads swing and shift and transform themselves as the market moves.

Some brokers may charge Commission fees, which are calculated based on a percentage of the spreads offered by the broker.

Because of their nature, ECN brokers generally add a fixed fee or commission to their services, whereas STPs make their money off of the spreads.

The World is Your Oyster

What does your broker of choice offer you via their account?

The account’s nitty-gritty is of utmost importance, so make sure to study every nook and cranny of what’s being provided and the rules and regulations governing said account.

This might include looking at the levels of leverage and margin on offer, the spreads available (the lower, the better), any minimum deposit requirements to get started training, and the ease with which you can deposit and withdraw your funds.

For example, when it comes to managing your funds, FXPRIMUS makes it easy for you to deposit and withdraw money in a fast and secure manner using a cornucopia of payment systems without incurring any extra fees*.

Additionally, we have set third-party Boudica Client Trust to oversee the withdrawal process and ensure that your withdrawal requests are executed without delays.

Similarly, you want to review what instruments are available to trade via your particular broker of choice.

How many currency pairs are listed for trading? What about precious metals, equities and indices? Can collectible Panini World Cup stickers also be swapped? And so on…


Treat You Like Royalty

We know you don’t want to deal with a broker who doesn’t look after you or provide you with the tender loving care you deserve.

Plus, you know the old saying: the customer is always right. Well, almost always.

So find a broker that is known for its impeccable and attentive customer service. One that is willing, ready and quick to answer your questions 24/5, handle your complaints in a diligent and responsible manner, and provide you with the reassurances you need to know you are in good hands.

Even better if said customer service representative is available to you via multiple methods of communication (email, live chat, phone, telepathy, etc.,) and in a vast array of languages in case you are in the mood to practice your Klingon or pig Latin.

Best of luck picking the right broker for you!

To check out a list of all of our ongoing promotions and offers, have a look at our website here.

*T&Cs apply
**Any opinions, news, research, analyses, prices or other information contained here are provided as general market commentary and do not constitute investment advice. FXPRIMUS does not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from the use of or reliance on such information.

Risk Warning: Trading on margin products involves a high level of risk , which may result in the loss of all invested capital. Show Less

risk Show More

Get Started

Risk Warning: Trading on margin products involves a high level of risk , which may result in the loss of all invested capital.

Get Started