Not all brokers are created equal and you should to do your homework before committing any funds. The following is a list of things to check before opening an account:
1. Licensing and Regulation
- Is the broker licensed and regulated as a provider of financial services? If so, can you check this broker’s license number and complaints with the regulating body? We recommend dealing only with reputable regulated brokers (see also How Is Forex Regulated?)
- Do you trust the judicial system in the country where your broker is licensed?
2. Currency pairs offered for trading. Does the broker offer the currency pairs that you intend to trade?
3. Transaction Costs
- Do they charge commissions separately or include them in the spread? (see also What Is A Spread?)
- How this broker’s spreads compare with other brokers?
- What are the overnight position holding costs?
- Are there any other costs involved?
4. Order Execution
- How fast are orders executed?
- Do you always get the best possible price?
- How is the slippage? Slippage is the major expense. A few pips here and there amount to significant difference in money made or lost.
5. Account types and margin available.
- What types of accounts and leverage are offered? How does it compare with other brokers licensed in the same country?
6. Initial deposit.
7. Deposits and withdrawals.
- How easy it is to deposit and especially withdraw funds?
- Is there a minimum for withdrawal?
- What are the withdrawal costs?
8. Trading platform
- What software platforms are offered?
- How easy is it to trade your trading system with platforms offered?
- Can you access your account and trade while away from your home computer?
- Is there a mobile app available? Can you analyze the market and trade on the go?
9. Customer service
- Do you need support in your trading?
- At what hours is the support available?
- How easy is to get through to support and what is their attitude?
10. Additional services
- Do you need any additional services such as market analysis, news feed, etc.?
- What other services are available and do you really need them?
- Make sure to Google your broker’s name in combination with such words as fraud, complaint, slippage, feedback and such.
- Check opinions of others on Forex message boards
12. Trade a demo account for a while
- Open a demo account with the broker you like to get a feel on how things work with them.
To see the list of Forex brokers that we use ourselves and highly recommend, please visit our Forex Resources Page.