When starting out as a forex trader, one of the most important decisions you will make is your choice of forex trading broker. Fast, intuitive online forex trading brokers make it easier than ever to begin trading forex, but different platforms provide different levels of functionality and ease of use.
A good forex broker will provide fast access to the forex market and a range of tools to help you get started and stay informed. Along with the basics, there are factors such as regulations, fees, customer support, and deposit/withdrawal options to consider.
Whether you’re a novice or an experienced trader, finding the right forex trading broker requires careful consideration. In this article, we’ll explore some factors to consider when choosing an online forex trading broker.
What You Should Know When Choosing A Broker
There are several factors to consider when selecting an online forex trading broker. In this section, we’ll break down some key factors to consider when comparing brokers for forex trading.
Key Factors to Consider
- Spreads
The difference between the bid and ask price is known as the spread. The lower the spread, the lower the costs of making the trade. Brokers will typically offer either fixed or variable spreads, and if you’re looking to be an active, regular trader, understanding how these will impact your profitability is essential.
- Cost and Commissions
Some brokers charge a commission per trade, while others incorporate their fees into the spreads. When comparing brokers, you must understand their pricing structure and find one that aligns with your trading strategies and style.
- Leverage
Leverage can significantly increase profits by allowing traders to control larger positions with a smaller amount of capital. However, it also carries increased risk. Understanding how leverage works and the levels your forex trading broker offers is essential.
- Margin Requirements
The margin is the minimum amount of money required to open a trading position. Choose a broker that provides clear details about margin requirements and how they are applied to forex trading. Insufficient margin can lead to margin calls and the closing of your trades.
- Speed and Slippage
Speed of execution is essential for forex traders. This is particularly important in volatile markets, as delays in executing orders can lead to slippage, where trades are executed at a different price than expected. Forex brokers that can offer reliable platforms with fast execution times will keep slippage to a minimum.
- Markets Offered
Forex brokers offer trading in currency pairs but may also provide access to other commodities and asset classes. If you think you may want to diversify your trading portfolio over time, consider a broker that can provide access to a diverse range of markets.
- Customer Support
A reliable online forex trading broker should offer responsive customer support via different channels like live chat, phone, and email. This can be particularly important for beginners, helping to ensure that any issues are quickly resolved.
Types of Forex Brokers
Forex brokers have different operating models. The most common are:
1. Dealing Desk (DD) Brokers
Dealing Desk (DD) brokers create their market for traders. They take the opposite side of trades and profit when traders lose. Offering fixed spreads, they are often places where beginners first encounter forex trading.
2. No Dealing Desk (NDD) Brokers
No Dealing Desk (NDD) brokers connect traders directly to the interbank market or liquidity providers.
These brokers can be categorised into two types:
- Straight Through Processing (STP)
STP brokers route trades directly to liquidity providers without intervening. They tend to offer variable spreads. Because of their speed of operation, they are suitable for traders who require fast execution.
- Electronic Communication Network (ECN)
ECM brokers facilitate direct interaction with other market participants, including banks and financial institutions. Their spreads tend to be tighter, and they may charge commissions.
3.Hybrid Brokers
Some brokers offer a hybrid service incorporating features of both the Dealing Desk and No Dealing Desk models.
Forex Trading Comparison
Before you opt for an online forex trading broker, you must compare their range of features. Focus on factors such as regulations to ensure that your money will be safe, the range of services they offer, and the trading conditions in which they operate.
The overall reputation of the forex trading broker is also worth paying attention to. Take a look at review and comparison sites to see what other traders are saying about their experiences. FXEMpire, which compares independent brokers, recently rated ActivTrader as the best-regulated broker.
Why You Should Choose ActivTrades As Your Broker
Choosing the right broker is crucial to your success in forex trading. ActivTrades has established an industry-leading reputation over two decades. Working with a strong regulatory framework, it offers comprehensive features and is strongly committed to risk management.
What makes ActivTrades one of the best forex traders for beginners and more experienced traders?
- FCA-Regulated and Audited for Security
Our clients must be confident that their money and personal details are secure, so we take security very seriously. Regulated by the Financial Conduct Authority (FCA), ActivTrades operates to the very highest standards of financial security and integrity. Being FCA-regulated gives our clients added peace of mind, with funds being held safely and managed in segregated accounts.
- Risk Reduction Features
We take a proactive approach to risk reduction, making it a good choice for beginners and more cautious traders. We provide a free demo account to enable traders to gain experience, confidence, and know-how before risking real money on the markets. This is preloaded with £10,000 in virtual funds, allowing traders to explore the platform and test strategies without risking their funds.
- Low Minimum Deposits
You don’t have to deposit thousands of pounds to start trading on ActivTrades. We cater to traders with varying budgets, and our low minimum deposits make it an accessible option for beginners. ActivTrades allows you to begin cautiously.
- Advanced Tools and Platforms
ActivTrades provides a range of cutting-edge platforms, including MetaTrader 4 and MetaTrader 5. These platforms offer advanced charting tools, technical indicators, and Expert Advisors that allow users to automate trading.
- Competitive Spreads and No Hidden Fees
ActivTrades is one of the best forex trading brokers for controlling costs and allowing traders to retain more of their profits.
- Comprehensive Customer Support
Traders rely on fast, efficient customer support for their online trading. At ActivTrades, our support team is available 24/5, and can be reached via phone, live chat, and email. We aim to address any queries or concerns as promptly as possible.
- Enhanced Safety Measures
All ActivTrades accounts have negative balance protection, which ensures that traders cannot lose more than their deposited funds. This provides active protection, not least for beginners who might be unfamiliar with some of the risks of leveraged trading.
With our strong regulatory oversight, robust risk management, fast customer support, and user-friendly features, ActivTrades has become one of the top forex brokers globally.
Whether you want to practice forex trading risk-free, are looking to enter the live markets, or are a more seasoned trader, ActivTrades provides the tools and support required to trade forex successfully.
It’s easy to open an account and start trading.
Useful Guides for Forex Trading
Forex trading can seem daunting and confusing for beginners. To simplify matters, ActivTrades has produced a range of useful guides covering essential topics.
Forex Trading for Beginners
Our guide to forex trading for beginners breaks down the basics, introducing key terms, market structure, and how forex pairs work. It then leads you through your first trade and helps you understand essential concepts such as spreads, leverage, and risk management.
Forex Trading Software for Beginners
This guide explores the tools you’ll need to trade effectively as a beginner trader. It looks at why forex trading software is so popular and introduces popular platforms like MetaTrader 4 and 5. It also helps you choose software to suit your particular trading style. Whatever your experience or overall trading goals, this guide has you covered.
How to Open a Forex Trading Demo Account
Learning how to trade on a demo account is one of the safest ways to learn forex trading. By using virtual currency, you don’t have to risk real money until you feel confident. This guide explains how to open a demo account, test strategies, and build your confidence before moving to a live account.
Best Forex Trading Platforms Guide
With so many trading platforms available, it can be challenging to determine which one is best for your needs. This guide compares the top forex trading platforms, highlighting their features, usability, and compatibility with various devices. Whether you’re a beginner looking for simplicity or an experienced trader searching for advanced tools, this guide will help you make the right choice.
Beginner’s Guide to MetaTrader 4
MetaTrader 4 is one of the world’s most popular platforms for forex trading. This guide provides step-by-step instructions on navigating MT4, from opening an account, downloading the software, setting up charts, and placing trades.
Our guides are designed to provide you with the knowledge and skills to trade forex, develop your trading experience, and increase your confidence.
FAQs
Do you need a broker to trade forex?
Yes, you need a broker to trade forex. Brokers provide access to the forex market and offer platforms to execute trades, such as MetaTrader 4. They also ensure smooth trade execution and compliance with regulations.
What should I look for in a forex broker?
You should consider factors such as reputation, regulation, available platforms, instruments, and customer support. A reputable authority, such as the FCA, should license the broker. Find out why ActivTrades is one of the best online forex brokers here.
Can beginners trade forex successfully?
It’s certainly possible for beginners to successfully trade forex, but it takes practice. Starting with a demo account is highly recommended, as it allows you to practice without risking real money.
What moves the forex markets?
Forex markets are influenced by factors including the overall economy, geopolitics, and central bank policy. Learn more here.
Can you be a successful forex trader with limited capital?
Yes, success with limited capital is possible by using leverage wisely, managing risk, and starting with a demo account to build skills. Learn how to do this here.
The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and as such is to be considered to be a marketing communication.
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