Are you fascinated by the world of forex trading and impressed by its hugely lucrative potential? Do you want to start trading the foreign exchange markets, from the comfort of your home or while on the go, but get stuck on step one of the process? Well this is natural, as everyday people can now access the forex retail market online, but to do so they need a forex broker, as their intermediary, and forex brokers pop up every day like mushrooms, making the landscape crowded, fiercely competitive and often confusing.
Discerning thus, which broker is the best for an aspiring trader to choose becomes a task that is crucially important, yet complicated and it is further affected by the fact that the hugely lucrative nature of forex trading does not only draw traders, but also some unscrupulous, scam brokers, who are out to deceive their clients. This makes it even more important and necessary for traders to only choose their brokers after due diligence and well substantiated research.
Are forex reviews the ideal solution?
In their attempt to find and choose the right and most suitable Forex broker, aspiring traders very often resort to forex review sites to look up brokers and shape their opinion on them. Forex reviews may indeed be a useful tool in the hands of traders seeking their preferred forex broker, but at times, they may also hinder this process. Some review sites may well be biased either in favour or against specific brokers and this is why traders should be cautious when reading any review and be aware that it is possible that the information presented may be deliberately misleading.
This being said, traders should be aware that there are certain things they should be specifically looking for in Forex broker reviews, if they are to rely on those in order to pick their future forex broker:
- Check the objectivity and impartiality of the review site and pay attention to signs, such as an overly positive or ‘sales-like’ tone, that may be hiding an affiliate relationship between a review site and a broker being promoted.
- Check the relevance and adequacy of the information being provided, especially evaluating whether the information presented focuses on those broker features that are most crucial and important for traders and their trading experience and chances to succeed and not on peripheral, irrelevant topics. Reviews should be to the point, but also comprehensive enough to also reveal the culture and vision of a brokerage and not merely their offered features.
- Ensure the information is presented in a manner that is free from overly technical jargon and it is easily comprehensible by the average person, who is aspiring to become a forex trader. Those visiting a review site must be able to get a more detailed analysis of the information presented on the sites of brokers themselves, and not a mere reproduction of such information. Analysis should be clear, balanced and helpful to better help traders make up their mind.
- Take into account the review website itself and whether it is easy to navigate and comprehend. Information that is poorly presented may well be inaccurate as well, so only trust review sites that go to the trouble of allowing you to locate the information you are seeking, easily and quickly.
- Prefer review websites that have an edge over others for offering an insightful look into the offering of brokers, especially on those aspects that are most crucial for trader/customers. Also look out for clear explanations, as well as charts and tables which make comparisons easier to understand, while you should always pay particular attention to user contributions, such as reader reviews, grades or real-life testimonials.
Learn how to effectively read forex broker reviews
To make the most of a forex broker review, you need to know how to read one and learn to focus on those features presented which really matters to a trader. To help you sift through the rubble and put things in a better perspective, here’s the most crucial broker offering aspects and features you should be trying to get wiser on through studying and comparing forex broker reviews:
- The commissions and spreads charged
Generally speaking, you should prefer those brokers that charge you low and fixed spreads, but remember that a low commission alone should not be your deciding factor and that you need to make sure you fully understand the entire fee structure used. Often forex broker reviews include comparison charts listing such information.
- The initial deposit requirements
Especially if you are new to the world of trading, you should prefer brokers which allow you to open a trading account for a low initial deposit. However, be aware that the benefits to be had from your actual amount deposited will also be affected from and depend on other factors as well, such as leverage and minimum lot size. Remember to check out the initial deposit requirements on forex broker reviews, bearing in mind that these vary from broker to broker, as well as from account type to account type. Also, make a point to record all the accepted payment methods for making such a deposit, as not all brokers accept all methods. Remember to also note all fees for opening, maintaining and even for closing your trading account and compare these across the brokers you are considering to choose.
- The leverage and margin requirements
As the higher the leverage the higher the risk, but also the earning potential, whether you will prefer a broker with high or low requirements, largely depends on your trading plan, taste and style. Though beginners tend to prefer lower leverage and thus lower risk, there is no right or wrong decision, provided you fully understand what you sign up for.
- The forex trading platform and other software
Most forex broker reviews include their evaluation of the broker’s platform and software offering and you should pay particular notice to those as the good functionality and reliability of the platform, as well as the existence of additional, customizable features will greatly enhance your trading experience and maximize your chances for success. Again, the features and functionalities you should seek depend on your own, personal trading preferences so you need to define those first for your quest to be effective.
- The currency pairs available for trading
The number of available forex pairs for trading is perhaps not as important a factor, since most major pairs are offered by all brokers, while more exotic ones may not be such a good idea to venture into, especially for novice traders. However, once again, how important the actual assets offered for trading are, depends on how you plan to be trading and on what. If you have a specific currency in mind or a specific strategy to follow, then naturally you should seek for forex brokers that can accommodate you better. Moreover, as cryptocurrency trading is gaining popularity and momentum you should perhaps show a preference to brokers that offer crypto trading alongside regular forex trading.
- The quality and availability of customer support
Forex reviews almost always evaluate the level of customer support offered by forex brokers and rightly so, because being able to obtain support, advice, guidance and real solutions to any problems or even disputes that might arise during your trading life, is of paramount importance. Make a point to seek, through the reviews, brokers that offer support on a 24/7 basis, preferably in your own language. Moreover, find out whether a broker also offers educational and training opportunities for its clients, as a knowledgeable trader is always much more successful.
Reviews alone will not do the trick
Though forex broker review sites, especially when you know what to look for and what to concentrate on, will greatly help you narrow your research and enable you to more easily locate the most suitable broker, you should not simply follow what the reviews say. Besides checking out several brokers and several review sites, to have a picture as complete as possible, which will enable you to draw valid conclusions and make effective comparisons, the most important step is determining exactly what YOU are looking for. If you do not accurately, honestly and precisely identify your own specific needs, you stand little chance of actually finding the ideal and most suitable forex broker for your trading endeavour. Also, when you know exactly what you want, reading forex broker reviews will become easier and more effective and efficient.
Therefore, besides reviews you will need to perform your own research and analysis as well, as none knows and understands your own requirements better than yourself. A systematic and thorough approach is necessary, along with time and effort, in order to make the right choice of broker and this decision is clearly one of paramount importance, as how suitable for you your broker is, poses as the most basic aspect of being a successful forex trader. What you should aim for then, is to first decide what type of trader you want to be and what kind of services you will need to achieve this, before resorting to forex review sites in order to find your ideal forex broker. In practical terms therefore, before delving into forex review sites, ensure that you identify and define your financial objectives, the types of trading you want to do, and the services you know you are definitely going to need while trading. At this point, and armed with this specific list of requirements in mind you can start comparing brokers, on your own or with the help of forex review sites.
When selecting your broker do ensure that you consider more than price and do not simply jump on the cheapest offer you can find. Prices and charges will indeed be a factor for your selection, but the actual services you will be getting are definitely much more important. Equally if not more important is also the effectiveness and efficiency of the brokerage and whether they actually deliver on what they promise.
The task at hand then, though complex, is fairly simple: the best broker for you is the one that offers the best mix, in terms of services, account types etc, for the kind of trading you want to do and for the money you want to pay, and this is exactly the broker you should be aiming to identify.
Once you find the broker, just make sure it is a secure and reliable one, that is dependable and trustworthy. Though many review sites will say that being regulated is the number one tick box your prospective broker should tick, we shall refrain from saying so, as we beg to differ on this point, as explained further below. However, you will need to carry out your own due diligence and check the background of a broker, whether regulated or not, to have your own assessment of whether or not the can be trusted with your money. Moreover, also ensure that any prospective broker implements strict security policies and technologies so that your account and all personal information will remain safe, encrypted and protected from any attempts for unauthorized access.
Putting your own needs as a trader over the opinion of reviewers
Without negating any of the analysis presented above, and without saying that broker reviews are not an instrumental and useful tool when trying to decide which broker to choose, relying solely on reviews may lead one to make the wrong, or at least not the most suitable choice. To highlight where the problem could lie, let us use an example. Let us say you are an aspiring new trader and you stumble across a broker that seems interesting and offers features that you are particularly keen on. For argument’s sake, let us say that this broker is Osprey FX and you are drawn by their speed of execution, simplicity and extensive offer of cryptocurrency trading. Your natural move, before proceeding to open an account, would be to search online for reviews of the particular broker. If you do so, you will find that the vast majority of reviews concentrate on the fact that Osprey is an unregulated broker, and immediately label it as scam and urge you to avoid them.
Is that though, the best decision for you? We shall not argue that as a general rule of thumb regulated brokers are not perhaps safer for traders, however we do disagree that all unregulated brokers should be avoided by default and this is our main objection for the way many review sites rush to discredit them, not based on any evidence that they are indeed unscrupulous, but merely on the absence of regulation and without examining and fairly presenting any other features or benefits they might be offering that traders would be interested in or whether or not they are actually credible or have engaged in any wrongdoing.
Having previously discussed the topic of regulated Vs unregulated brokers, highlighting our view that this is often a false dilemma as is illustrated in OspreyFX Forex Affiliate Program case study, we shall once again stress that not all unregulated brokers are scammers and thus not all unregulated brokers are unsuitable. In fact, for traders willing to assume some added risk, perhaps the flexibility and more innovative approach, often adopted by unregulated brokers, may well increase a trader’s chances for success, especially if the specific offering better suits and matches the specific trader’s own wants and needs. At the end of the day, it all comes down to you and your own personal goals and requirements as a trader. After all, it is you who will be trading and it is your funds that will be at risk. Therefore, when trying to decide which forex or crypto broker to open an account with, yes do consult review sites and yes do compare what several of those say about a broker you are considering. But, also make sure you are wise and clever enough to move beyond the obvious, and not decide based on generalizations, misconceptions or a narrow view and standpoint.
Define your own needs and preferences, your goals, aspirations, risk tolerance levels, your limitations or strongpoints, in short, have a clear idea about what suits you best as a trader and then decide on the broker that best and most convincingly meets those needs. In fact, you can even try out a few brokers before you settle with the one to stick to, provided you have the tolerance to risk some funds in order to find out how the broker works under real trading conditions.
Do remember that trading success is very much feasible, but that also it does not come over night or without some careful and wise decision making and effort on your behalf. And making the right broker decision is definitely a decisive factor that could greatly hinder or massively boost your trading success potential and prospects. And no matter what reviews might say, if a broker works best for you, then go ahead and make that choice!