September 14th, 2021 | Updated on March 16th, 2022
Before you decide to work with any forex broker or brokerage, you must do your homework. We are talking about potentially large sums of money, of course – which means you will need to work out whether or not that lucrative option is worth pursuing. However, this means you will need to consider more than just regulatory compliance.
So, where do you start? A good launchpad may be to consider approaching a comparison site that brings together multiple different forex brokers. Forex Traders is one such example that is well worth looking into.
Crucially, it is essential to look at the bigger picture. Not all forex brokers will offer the same platforms, education, or event support.
Just as there are many different trading attitudes and strategies, different brokers and brokerages are operating across the board.
Therefore, let us consider a few key checkpoints when hunting down the perfect forex broker for you.
Listen To Other Traders
The most important avenue to consider when researching forex brokers is previous customers. What do seasoned traders and clients have to say about your prospective broker or brokerage?
Could they offer you insight into the actual value of service, the support they have received, or even the amount of money they have made through such a platform?
It is all to do with knowing where to look. Of course, Google reviews and social media buzz are great places to start hunting for opinions.
However, it is also a good idea to consider looking into forex trading forums that are entirely independent of any kind of brand or broker. For example, you may be able to find unbiased opinions and feedback through Reddit.
Unfortunately, you cannot trust the marketing of a forex broker alone. The same will apply to any reviews or testimonials they host on their websites or social media accounts. They are unlikely to push forward their negative reviews!
Try Demo Mode
Any reliable forex broker worth the investment should give you the option to try an account in demo mode. Effectively, it is a ‘try before you buy’ model.
While this side of the research may not give you much insight into the regulation side of the equation, it will at least help you understand how a particular system works before you start investing.
A worthy broker should also allow you to try demo mode without making any financial or contractual commitment. It is worth searching for and comparing brokers that at least have a free demo available if it’s your first time in trading.
If you already have some experience in forex trading online, then demo mode is helpful for you to compare platforms.
Consult The CFTC
The CFTC, or Commodities and Futures Trading Commission, is the central body involved in regulating and monitoring forex trades across the US. Through the CFTC, you’ll be able to check whether or not a prospective broker is above board and is properly run.
Again, good forex brokers and those with nothing to hide will list their regulations clearly. They will also be happy to answer any questions you may have about regulations and monitoring.
However, if you notice any particular red flags or hear alarm bells, always head to the CFTC as a matter of precaution. It is, as the cliché goes, better to be safe than sorry.
When dealing with large sums of money through markets as volatile as those in forex, it is especially important to research any brokers you are interested in working with carefully. Otherwise, you could be losing large sums of your hard-earned money.
It’s Wise To Plan Ahead
Forex trading is exciting, and that is largely why so many people leap into the markets without much thought or planning. The same can apply to Bitcoin trading, too!
However, as mentioned, failure to plan and research appropriately could lead to significant losses on your part. Thankfully, there are many different ways for you to research potential brokers, meaning that you have little excuse not to do some background work.
The best brokers will not be afraid to show you their regulation status and will happily answer any questions you may have. However, remember to consider more than just the word of a brokerage – look at other traders’ opinions and try out a demo mode or two in the meantime.