Conducting some online research will help you choose the right broker and make the best possible negotiations, without any unpleasant surprises!
Below is what you need to look for in an online broker before committing to them.
1. Good standing with financial authorities
In the UK, you can check whether an online broker is legally active by visiting the FCA website. You can verify the operator's affiliation with the supervisory authority. The Financial Conduct Authority regulates firms from the financial industry in order to maintain integrity across UK markets. The FCA also verifies all financial products, services and investment activities and authorized ancillary services.
In addition, the FCA regularly updates a blacklist of brokers to avoid. If it is a French-based broker, it is important that the broker be regulated by the Autorité des Marchés Financiers (AMF), which means that the broker has been approved and complies with certain rules of compliance and security.
Similarly, it is important to check the security of client funds. Choose a Forex broker with bank accounts in Europe and especially with segregated bank accounts to prevent his funds from disappearing at the same time as the broker (in a worst-case scenario).
2. Quality of the service
Obviously, each transaction is very important and transaction service must be of the highest possible quality. Thus, the quality of the execution of orders at the asking price is essential. Similarly, it is important to choose the broker with the platform with which you are most comfortable and that best suits to your needs, the most widespread and most used being Metatrader4 and Metatrader5.
In addition, check that your broker can provide you with flexible tools, an online platform for desktop and mobile so you can check exchange rates, convert and track payments at any time, wherever you are.
Another important point is the money transfer processing time. While banks can take a few days, most currency brokers can transfer funds internationally the same day. So, if you make a conversion in the morning, a currency broker can send the money and place it on your international beneficiary account that same afternoon.
3. Compare rates
This is somewhat more complicated as most currency brokers only display exchange rates on their website rather than profit margins. It is interesting to find a broker with low spreads but be aware that it does not mean you will have this spread on all your orders, all the time. It is therefore necessary to remain attentive because a displayed average spread does not guarantee this spread when you place the order. In addition, there should be no additional charge for conversions as this is normally included in the exchange rate. It is possible to request quotes from several brokers to check this particular point.
4. Diversified markets
Investing in several markets at the same time is profitable. It may be useful to work with a broker that offers different markets that will diversify your portfolio: Forex, indices, commodities, stocks, crypto currencies, bonds, and so on.
5. Flexibility in the strategy
Look for a broker that works in accordance with your trading strategy. For example, do not put limits on trading styles. The same is true for leverage as Forex is a market that is often traded with leverage. It is important that you be able to set the desired leverage yourself.
6. Training and teaching tools
An online broker does not have the right to give investment advice but can make general training on the subject available to its customers. For beginners, it is very important to understand the trading vocabulary as well as the main strategies to adopt. It is always useful to choose a broker that offers online training, webinars, information videos, a glossary... all the tools that will be useful in becoming familiar with the trading world.
When choosing an online broker, the aim is to find a trading partner that will allow you to be more efficient and more profitable whilst ensuring the security of your funds and transactions. The criteria mentioned above are all indications of whether you have found the online broker that meets your expectations.
To help guide you in your choice, do not hesitate to consult our broker comparison:
