Choosing a Top Regulated Forex Broker

There are many who are eager to enter the Forex market. With FX traders on the rise, new traders are finding it difficult to carry out their business. It will be essential to select the best regulated broker who can provide proper and timely guidance to achieve success in the highly volatile market and to make money. Unfortunately, there are several scrupulous and amateur brokers who are better avoided. It will be useful to get registered with a reputed broker to enjoy long term benefits.

As a matter of fact, the secret to achieving success is not dependent entirely on the selected platform, but more with their attitude and trading capabilities, considered to be the recipients for success. A broker is to be selected by determining few clear guidelines according to the specific needs.

Taking Care When Selecting

One of the leading Forex brokers had applied for insolvency, which placed spotlight upon brokers & their regulations. With per day trading volume crossing $5 trillion, foreign exchange market known popularly as FX or Forex is considered to be the largest market in the world. The in-depth liquidity and size of this market combined with five days/weekly trading, does make it quite an appealing choice to traders.

What You Need to Know?

There is no clearing house or central exchange unlike commodities and stocks. Since lack of transparency exists in this market, it is found to be vulnerable to several types of manipulation and malpractice. The brokers in the UK are regulated by the FCA (Financial Conduct Authority) to ensure ethical and fair business conduct and to adhere to several industry standards. The firms are required to keep their clients’ funds separate from the company funds. It is not possible to use the segregated deposits as company assets, in case, brokerage firm gets insolvent.

Avoiding Issues

The importance to us a FCA regulated broker is being underscored by the January 2015 event that involves the SNB (Swiss National Bank). There can take place unexpected events, at times referred to as the black swan events, at any point of time, to cause chaos and confusion. The Swiss decision had created turmoil in the global financial markets and several FX brokers have suffered major losses and others declared bankruptcy. But the ones being FCA regulated did offer their customers with immense relief.

FCA Regulated Brokers

The listing includes those brokers who have been found to offer financial stability, trading platforms and excellent execution. When choosing the best one, it is necessary to consider some preferences like execution software, competitiveness of spreads and markets available.

• OANDA: This Canadian based foreign exchange firm provides competitive spreads, low being 1.2 pips in USD/EUR. It also offers MetaTrader 4, besides own fxTrade platform.
• City Index: Being established in 1983, it offers Forex trading besides spread betting and CFD’s. MetaTrader 4 platform provided with added features and tools.
• Interactive Brokers: This Greenwich, Conn based firm provides direct access towards interbank FX quotes, as well as to operate using ECN (Electronic Communication Network) market structure.
• Forex.com: This company is owned by GAIN Capital, the parent company and established in 2011. It was the first mover to enable the retail trader to reach currency markets.
• FxPro: It was established in 2006 and is considered to be a reputed online broker providing Forex trading combined with CFDs. cTrader and MetaTrader4 trading platforms can be found.
• FXCM: This company offers no-dealing desk model combined with competitive spreads. It offers trading in various types of currencies including that of the Chinese Yuan.
• IG Markets: Established in 1974, it started as spread betting business with the name of IG Index. It offers pair trading including USD/JPY, USD/AUD and EUR/USD and spreads being low by about 0.8 pips.
• Activ Trades: It was established in 2001 and offers FX trading to its clients in micro and mini lots, with competitive spreads and diverse product offering.
• CMS Forex: This proprietary VT Trader platform is offered, allowing clients to have direct access to trading from the chart. It also offers multiple technical indicators.
• HYCM: This company has been in business for about thirty years. It offers multiple trading platforms along with wide range of trading instruments. Belonging to Henyep Group division, this global conglomerate has presence in about twenty countries.

Most of them being located outside the UK are regulated by the other bodies like NFA (National Futures Association) in the U.S. Retail Forex industry is said to be developing and improving constantly. However, traders are required to remain vigilant to scrutinize where their funds are to be parked for investment purpose.

Tips When Choosing

• Trading platform features: there can be varying trading platform layouts. However, they will have sell and buy button. The broker selected needs to offer correct rates along with robust trading environment. some essential features to look into are spreads, commission, major currency pairs, timeframes, tools, suitable indicators, profit and loss sheet and robots. Registering for the demo account will help to understand any specific platform.
• Affiliate with regulatory body: Investments in thousands is to be made with the selected broker. For safety purpose, a credible broker is to be chosen. Credibility can be found out by checking if the brokers are regulatory body members.
• Withdrawal and deposit: It needs to be smoothly performed, without the hassles involved. When making profits, cash can be allowed to be withdrawn if desired and withdrawal charges are to be less.
• Customer support: Having round the clock customer support and prompt assistance can mean a lot to achieving success. Without appropriate communication link, major financial losses can be suffered.
• Trading cost: Commissions are to be paid on every trade placed. In Forex, ‘ask price’ is deducted from the ‘bid price’, which is taken as broker’s commission and referred to as ‘spread’. Commission needs to be low Tight spread will not be a concern for the position trader.

Conclusion

Above are the tips that should be followed to choose a regulated Forex broker. Selecting the right one is sure to provide the trader with peace of mind, satisfaction and opportunities to make it big in the market.