How do I choose the Best Forex Broker? To select the best Forex Broker is not an easy task, there are so many aspects to consider and it may be difficult to analyze them all. We understand the difficulty of the decision.
That’s why we created the list above. You can choose the best Forex broker for you by considering the above factors and choosing the one that best meets your needs. Do you know another Forex Broker to add to this list? Let us know in the comments!
Yet, the sad truth is you can NOT directly invest in the Forex market unless you use a Forex broker. What this means is, you must open an account with a Forex broker in order for you to trade Forex. In other words, you must have a broker create an account for you and deposit funds into that account. This is required by the Forex providers and it is also required by regulators in most countries.
However, there are some Forex brokers that offer "Direct Access" which enables you to open a trading account and fund it yourself. But know this: Direct Access accounts are not as regulated as accounts where a Forex broker does all the trading for you. That's because when you are trading directly, the exchange and the broker are responsible for your trades.
Simply put, a "license" is a permission or authorization granted by a regulatory body such as a government agency, that allows a person or entity to operate in a certain way. So, if you want to start a business or do something legally required, you must get a license.
For example, in the United States, nearly everything a person or company does must be done in accordance with various federal statutes and regulations. And, without a license, most activities are considered illegal. Therefore, if you are planning to offer Forex trading services to the public, you MUST have a license from one of the following regulatory bodies:
Thus, all those mentioned above have the legal right to grant a license to operate in their jurisdiction. However, not all brokers who offer Forex trading services are licensed by these regulatory bodies. Therefore, it is important to know the following: A broker that is licensed by one of the regulatory bodies mentioned above can legally offer you the following services:
However, a "non-regulated" broker cannot provide any of those services and, therefore, they are operating in violation of the law. That's why we suggest you avoid brokers who are not properly licensed.
First, it means that the broker is subject to strict regulatory oversight which ensures that they are honest, reliable, and offers the highest possible standards of customer service.
Secondly, because a broker is regulated, they must follow a specific Code of Conduct which spells out the precise details of how a broker is to operate. This ensures that all brokers offer fair and equitable dealing to their clients and that there is no conflict of interest when recommending or placing trades for their clients.
Brokers must also be transparent about their fees and clearly disclose all terms and conditions for opening and maintaining an account.
And secondly, what does it mean to me as a client? The first step to finding this information is using a reliable source such as the following:
Which ever jurisdiction your broker is licensed in, they will have published on their website, the "Codes of Conduct" that apply to them. These documents will outline the specific rules and regulations that apply to brokers operating within that jurisdiction.
If you are trading with a broker who is not properly licensed, you run the very real risk of being cheated out of your hard-earned money. Worse yet, you may even end up losing all or part of your investment due to the actions of a rogue broker.
First, ensure they are honest, reliable, and offers the highest possible standards of customer service. Secondly, because a broker is regulated, they must follow a specific Code of Conduct which spells out the precise details of how a broker is to operate. This ensures that all brokers offer fair and equitable dealing to their clients and that there is no conflict of interest when recommending or placing trades for their clients. Brokers must also be transparent about their fees and clearly disclose all terms and conditions for opening and maintaining an account.