When you start to invest in Forex you have to create a safe trading environment. Choosing a broker is the first step to protect your investment!
Financial trading is a regulated activity in almost every country in the world, especially in the most important financial centers such as the United Kingdom, the United States, the European Union, Japan, Australia and Canada, among others.
Before taking this step make sure your broker is licensed. Trading with an unlicensed broker will only offer you the protection contained in the terms of the contract. This is not the most ideal scenario.
When choosing your broker, be sure to protect yourself legally❗
There are 3 main points that you should consider when looking for safe conditions to trade or invest:
✔️ Segregation of client funds: ensure that your money is not used by your broker for anything, except your trading, and that it is therefore always available for withdrawal if you request it;
✔️ Financial Services Compensation Scheme: Defines the amount of funds that will be compensated in the extreme case that the broker or bank is bankrupt.
✔️ Efficient processes for handling customer comments and complaints: ensure that if your queries are not resolved in a few hours, they are immediately sent to the compliance or customer service department.
Whatever happens, make sure your investment is protected. There are other important aspects when choosing your broker such as:
- The trading platform with which the broker operates
- The spreads offered to the trader
- The quality of execution
- The types of accounts they offer
- Instruments and styles of trading offered to the trader
- Customer Service
- Trader training, such as personalized analysis or free online webinars
- Trading accounts differ in other things besides the minimum deposit!
In fact, the minimum deposit issue is the last thing to consider when opening a long-term trading account, despite being one of the points that receives the most publicity. Instead, pay attention to instruments, the execution model, leverage, and tight spreads. The way the quotes are published is also important and depends on the broker.
You have to be careful with Dealing Desk accounts, or Market Maker brokers (market makers), unless you are specifically interested in the conditions offered by them. Its features often include momentous execution, instant execution, and lower minimum deposits. This means that you are trading with the broker instead of through him.
A trading account with a broker is very similar to an account in a bank. The main difference is that the funds in your Trading account can only be used for trading in the financial markets.
There is a great variety between trading accounts depending on the broker with which you decide to invest in Forex.
The type of account you should choose to trade Forex will depend on your Trading strategy. The accounts vary among others depending on:
- your minimum deposit requirements
- financial instruments to be traded