So you’ve decided to trade forex. However one thing has still to be sorted out. You want to get the best from your broker and you want to be sure that all you expect to get are fulfilled. What questions do you need to ask to get satisfactory answers from your broker? Here are 10 questions to ask your broker about the services you need to make your trading career a successful one.
1. Does the broker offer micro lots?
Many traders forget to ask this question without knowing that the answer will have a direct bearing on their risk management profile. For instance, if a trader has $1,000 to trade, and has been advised not to risk more than 3% of the capital in any trades. Supposing he wants to take a trade where the stop loss is 60 pips, it would definitely be in his best interest to know what the trade sizes are. Trading with a broker that offers 1 mini-lot as the minimum trade size will stretch an account of that size. So you need to know if your broker offers micro lots.
2. Are you regulated?
A broker should be able to answer this question easily, it’s a Yes/No option. Regulation means that the broker has been assessed for viability, can meet capital requirements, segregates client accounts and uses best practices in their business model to protect clients’ interests.
3. Do you offer a guaranteed stop loss?
Read about the events of January 15, 2015 when the Swiss National Bank de-pegged the Swiss Franc from the Euro. A guaranteed stop loss prevents the nasty events that slippage on stop losses caused many traders and market makers on that day. Do note that few brokers offer this and some may even charge for the guarantee. Does your broker offer it and is there a charge or is it free?
4. Do you offer training courses?
The best a broker can do to encourage new clients is to at least give them some tutorials on how forex trading works and how their platform works.
5. Do you offer friendly bonuses?
Bonuses are an incentive for traders to start off their trading business. It has been abused by many brokers, but there are some who still give bonus under conditions of mutual benefit for both trader and broker.
6. What are your deposit and withdrawal options?
You need to know what options or means of transaction your broker is giving you to be able to deposit or withdraw money from your trading account. Are there methods suitable for you or are there restrictions?
7. How long have you been in business?
The length of time a company has been in business says much about their reputation and how well they have satisfied customers, because it is when traders are active on a platform and generating revenue in spreads that the brokers can stay in business.
8. What platforms do you offer?
Traders should try to ask their brokers what trading platforms are on offer. Nothing can be more shocking than signing up with a broker only to be hit with an unfamiliar platform.
9. What currency pairs and trading instruments do you offer?
These days it is very cool to be able to trade gold, silver, a few indices as well as currency pairs all from one platform. So you should ask your broker about the assets offered for trading on their platform.
10. Withdrawal times
Trading is all about the money. So it would not be out of place to ask your broker how fast withdrawals are fulfilled. You would want to lay your hands on the profits as fast as you can, wouldn’t you?
Risk warning: Forward Rate Agreements, Options and CFDs (OTC Trading) are leveraged products that carry a substantial risk of loss up to your invested capital and may not be suitable for everyone. Please ensure that you understand fully the risks involved and do not invest money you cannot afford to lose. Our group of companies through its subsidiaries is licensed by the Cyprus Securities & Exchange Commission (Easy Forex Trading Ltd- CySEC, License Number 079/07), which has been passported in the European Union through the MiFID Directive and in Australia by ASIC (Easy Markets Pty Ltd -AFS license No. 246566).