Basic information about the best Forex brokers
Forex brokers have become extremely popular and preferred by foreign exchange currency traders. With their stable and fast growing presence on the web, Forex brokers are top ways for gaining some additional outcome by traditional finance specialist. Though, the intuitive and easy to be used software types and modern interfaces have made it possible for people with little finance knowledge, but with great analyzing skills to join the Forex brokers, too. Thus, the bigger Forex marker players have moved their strategy on the online Forex platforms. On the other side, the new traders also take the benefits of being on the Forex brokers. But before coming on such a website, it could be good for them to learn the basic information about Forex brokers. With the following explanations and examples we would like to make it easier for any Forex trader, who begins its experience, to understand the basic rules. So, let`s get started with the essence behind the traditional Forex brokers on the web.
What is a Forex broker?
The Forex broker has an intermediary role during your foreign exchange experience. It is the border between you as a trader and the interbank. On the other side, the internbank is the place, where you make business with more than just one bank. In short, the internbank is a backroom, where many people or many groups of people are making business deals with stocks, commodities, foreign currencies and etc. The Forex broker, itself provides you prices from different banks that it is linked and connected to. In general, one Forex broker works with more than just one bank and eventually it provides the traders the best prices among all of the banks. To get the advantages of trading on a Forex broker, though, there are only two main conditions. First of all, you have to be motivated and prepared enough to join the market. And second of all, you need to choose a Forex broker website that suits your needs and preferences and then, make an account.
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There is nothing special or difficult in creating a Forex broker account. The procedure is similar to all the online procedures of having a profile or account in similar websites. Though, there is something specific about the Forex broker accounts, too. They are very similar to bank accounts. So do the openings processes. You will be required to provide specific documents and identity verifications since the main job in a Forex platform is connected with money, deals and banks. Also, in most cases you will be preliminary offered to try a demo account on the particular Forex broker account. It provides a chance to all the new customers to play for free without investing any money, but checking if the Forex broker covers their own requirements and expectations of the platform for online trading. Once you make up your mind and decide that the Forex broker is ok, you can then make your deposit and begin the real online trading – with real winnings and real losses. Keep in mind that each Forex broker has its own minimum deposit conditions. They vary according to the Forex broker type. However, mainly the average preliminary deposit it between 50 and 200 USD. As to the currencies, different Forex brokers offer different currencies for trading. In general, each broker covers the main currencies – USD, GBP, Japanese Yen and EUR, of course. These currencies aren’t those currencies you will trade, because they are numerous. Besides, with currencies, Forex broker offers you chance to trade with commodities, stocks, precious metals and etc.
What is Forex leverage?
There is one more thing you need to know about the Forex brokers. They give you leverages. The averages might be 10:1, 100:1 and etc. Thus, a 10:1 leverage says that each 1 EUR (or USD, GBP and etc) in your count gives you a possibility to trade with 10 EUR. Be aware that large leverages up to 1000:1 might be quite attractive, but they usually come from suspicious Forex brokers, who are usually named in the web as Scam.
Balances in Forex brokers
Due to the leverage in a Forex broker, you will have two balances in your personal account. The first one shows your actual balance – the net balance – it incorporates the money you will have after closing the account. Though, the other account adds to this sum of money all your open trades. An open trade is a trade that hasn’t been finished yet. It does not have a result yet, so your deal isn’t closed and you do not know if you win, or lose yet.
What is a spread in Forex broker?
To end up with the essence behind the Forex broker, we will add some explanation about the spreads. The spread is a general commission, which might be different in each Forex broker. Here is an example. When you have an account in a Forex platform, you immerse to the market, right? By doing so, you will be offered a particular price, which dough differs from a prices the Forex broker can actually give it you. The difference is named spread.
How to choose the best Forex broker for your online trading experience?
Due to the large abundance of different Forex brokers on the market, it could be difficult to determine the most suitable, proper and beneficial one. This task is harsh for both – new traders and high punters. However, if you stick to some essential features a great Forex broker can have, you will determine your choice easily. Follow this guide and choose Forex broker that fits your preferences, abilities and skills.
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- The account features
- Customer support services
- The Forex broker software type
- Special extras
- Dealing desk – This is a market maker. Such a Forex broker provides fixed spreads. These brokers are usually the counterparty of the players, who do not make their trades directly.
- No dealing desk – It offers a direct accessibility to a particular interbank market. Also, there is no requiting of the price here – you trade with no restrictions at all.
- Straight Through Processing – The transactions here are instant due to a robotic system, so you are not intervened by the internabk market.
- Electronic communication network – It has real-time order book schedule. The transactions are directly processed here and the market is usually operating like a No Dealing Desk broker.
- Multilateral trading facilities – There are no discretionary rules here and all the traders use all the instruments at once.
To operate on the market legally and safely a Forex broker must be regulated. According to its basement (most of them are based either in Cyprus, or in UK by the way) they have different regulatory methods. However, the last few years made a Forex broker to obtain EU-based regulations, too. This made it happen for a Forex platform to be double protected. And today most of the old Forex brokers are regulated by a particular institution (depending on its region) and by EU agencies, too. Such a double regulation is a sign that your money is safe, your personal data is protected and your online trading experience will not be threatened by a fraud.
We have discussed most of these features – commission, spreads, leverages and etc. All of them determine the Forex broker essence. Some players prefer big leverages. On the other side, other – mostly the high punters – will look for the spread levels. In all of these cases, any player can figure it out if a Forex broker is ok for their own, individual online trading experience. In addition to the mentioned Forex account features, we can also add the payment methods. They can vary from different debit and credit cards, bank transfers and the popular e-wallets such as Neteller and Moneybookers Skrill. The terms and conditions for withdrawals are also key points, when choosing a Forex broker. The currency pairs are the other offers by a Forex platform you need to check in order to find out whether it is the right for you.
They are important for both – new traders and high punters in Forex online trading experience. The customer support should be provided at multiple languages. Also, make sure it does work 24/7, because Forex market is linked to 24/7 working time. Some players love trading at nights. However, others prefer to read the morning Forex news and then to make their daily Forex strategy. Check out the customer support methods for communication, too. A good Forex broker usually offers all of them – e-mails, phone calls at several hot lines for different regions, live chat and online forms for fast questions and inquiries. Last, but not least professionally arranged customer support services are handled by live people. Any robotic system for answering client`s questions or dealing with different issues are incapable to manage them all.
The platform that the Forex website uses is essential. It gives the player safety and easiness, while he is trading on the Forex market. The Forex platform is also supposed to be intuitive and simple to be navigated. Meanwhile, a complex and too colourful and bright (due to a bunch of ads and promotions) might destruct your attention, while trading. And you do know how important the concentration is on the Forex market. Make sure thet design of the Forex broker is simple, ordered and cool enough to suit your preferences, too.
The special extras on the Forex broker might be different. Some of them are connected to the Forex platform. Different Forex software types offer different tools and instruments. On the other side, most of the Forex website has a special centre for education. It is very important for all the new traders on the market. In such a centre, people receive live lessons, explanations of basic Forex temrs and rules, as well as free of charge materials, tutorials and lectures. However, when a trader hears Forex extras, the first thing he thinks off is the bonus system. Since the bonus system in a Forex broker is an essential element, we will discuss it in details below.
What is a Forex bonus?
The Forex bonuses are special extras. They are usually money, which the Forex website gives the player. According to when the Forex bonus is given it might be either a Welcome bonus, or inside-the game bonus. The Welcome bonus types are the most popular ones. They are given specially to the new customers on a particular Forex bonus platform. Besides to attract the customer`s attention, the Forex bonuses also aim to give him a chance to decide whether to stay on the website, or no. Thus, one of the most preferred bonuses – the No Deposit Bonus – provides the trader some sum of money (usually from 20 to 100 USD) to trade without making an initial deposit. The only condition to apply for such a bonus is not to have an account on the Forex broker yet. The other Welcome bonus is linked to your initially made deposit. These bonuses are in %. The most beneficial Welcome bonus is, of course, 100%. So, if you make a deposit of 100 USD and you have such a bonus, you will eventually have 200 USD in your Forex account as a beginning for your online trading experience. There are other bonus types, which are given during your current trading on the website. They might be given as rebate and also measured in %. So, if you make a deposit of 100 USD – a third one for instance – and the bonus for rebate is 50 % – you will add to your account 150 USD more. Special customers such as loyal clients and VIP clients also can be rewarded with some special bonuses, too. Attention – always read the terms and conditions for using a bonus on a Forex broker. Some of them might be quite tricky. If you do not understand the terms and conditions, reach the customer support centre to get the necessary additional explanation and information.
Different Forex broker types
Here are the main Forex broker types you will meet on the global Forex market:
We wish you luck and success in your first steps on the Forex market!
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