Best Forex Broker for Beginner Traders

Hello friends! Online Forex trading for beginners can not be difficult if you made the right choice of broker. Thus, choosing the best Forex broker is the first thing you need to do as a novice trader.

Many newcomers fall into the trap of scam brokers whose sole purpose is to steal their money. To avoid scammers, it is important to learn to recognize the best broker for beginners. In this guide you will learn how to choose a Forex broker, how to avoid scam brokers, and we will share with you some of the most important criteria that trusted Forex brokers.

How to choose the best forex broker

The best Forex brokers for beginners combine several important qualities: first-class regulation, low fees and extensive experience in the services market. Everything else is secondary.

See also our independent Forex brokers rating with real reviews from traders.

Regulation of the best Forex brokers for beginners

The first thing you need to look at when choosing a broker is to regulate it. Do not forget that Forex trading is a financial activity associated with risks. This is why the best Forex brokers are licensed by financial regulators. If brokers are regulated, you can safely replenish your account with large amounts, since the regulator will not only ensure the safety of your funds, but also return them to you in case of bankruptcy of the company.

In countries with developed economies, there is a state structure that monitors the commercial activities of Forex brokers. Here are the main Forex trading and financial regulators around the world:

• Australia - Australian Securities and Investment Commission (ASIC);
• United States of America - Commodity Futures Trading Commission (CFTC);
• United Kingdom - Financial Regulatory and Supervisory Authority (FCA);
• Cyprus - Cyprus Securities and Exchange Commission (CySEC).

Commissions and spreads of Forex brokers for beginner

Each broker charges a fee from his clients for his mediation services between traders and the interbank market. Some brokers charge a certain commission for the transaction, others a spread.

What is a spread?

You probably noticed that there is always a difference in price Forex currency pair for long and short positions. This is known as spread.

Imagine that you open a position to buy EURUSD at 1.1245 USD for 1 EUR. If the EURUSD spread is 1 pip, you will pay 1.1246 USD for 1 EUR to your broker.

Now you understand that the lower the spread, the less you pay per trade. It is in your best interest to work with a low spread broker, especially for major Forex currency pairs.

Types of Forex Brokers Accounts

As a rule, the largest brokers offer at least two types of trading accounts: standard and professional. On a standard account, the broker will charge a fixed or floating spread on each of your transactions. On a professional account, he will charge you a minimum spread plus a fixed commission.

Standard and professional accounts give you great flexibility in your trading. If you trade in small amounts, you do not need to pay a commission for each transaction. The standard type of account is the best choice for you. But if you trade in a large lot, then the spread will increase. In this case, a professional account will be the best solution for you. He will hold a fixed transaction fee plus a small spread. Below you can see the average spreads on various types of accounts:

Spreads can be as low as 0.1 pips for EURUSD in a professional account. On the other hand, many Forex brokers charge a minimum of 1 point per trade. Therefore, it is important to carefully choose the broker and type of account in order to get the best deal.

Leverage and broker margin

Leverage and margin are very similar and relate to borrowing money from your broker. Leverage is the ability to borrow money from your broker. Margin is the money you already lent.

This may sound strange, but you have to borrow money from your broker to be able to trade Forex. If you trade with $ 10,000 and invest 25% of your deposit in your transaction, what profit will you get? For example, EURUSD today is moving from 1.0800 to 1.0770 (30 points).

What is your profit if you trade in the right direction?

$ 10,000 × 0.25 × ((1.0800 - 1.0770) / 1.0800)) = $ 2500 × (0.0030 / 1.0800) = $ 2500 × 0.0028 = $ 7 profit.

Is $ 7 a day high profit? Note that catching a movement of 30 points is a great success in trading. This will not happen every day.

Now imagine that every second day you get $ 7. Within one month you will receive 15 days × 7 = 105 dollars, and this is excluding loss-making transactions, and without them no strategy is possible Forex.

If you were to trade with a leverage of 1: 100, you would multiply this effect by 100:

$ 105 × 100 = $ 10,500 per month. This is the amount with which you can earn a living.

This is how you can earn more with leverage by having a much lower amount on your account.

See also what regulated brokers are.

Best Beginner Trading Platform

MetaTrader 4 - the most popular Forex trading platform. Novice traders prefer MT4 because it is easy to understand and easy to trade. In addition, you can customize it the way you want. It uses the MQL4 programming language, which is convenient for creating indicators and Forex robots.

The best Forex brokers for beginners use the MetaTrader 4 trading platform. Here's what the MT4 platform looks like:

In the middle of the screen you will see trading chart on a black background (you can adjust the color scheme) . Your trading instruments are located on the panel above the chart. On the left side of the chart, you have available currency pairs. At the bottom of the screen is a list of deals. Every time you open a deal, you will see it there.

Financial instruments for Forex trading

The largest Forex brokers offer a wide range of financial instruments. Although the main Forex currency pairs are the most popular, some exotic pairs can give you a profitable trading opportunity. This can lead to large market fluctuations and a large number of points in your pocket.

The best Forex brokers provide more than 50 currency pairs. In addition, they give you access to trading in metals, goods, stocks, indices, cryptocurrencies and other trading tools.

This set of trading tools is more than enough for every beginner Forex trader.

See also what cryptocurrency brokers exist.

Trading charting tools

Technical analysis is crucial in online Forex trading. With it, you can determine possible short-term price movements before opening a deal. But you will not be able to conduct proper analysis on the chart if you do not have the necessary tools for Forex trading.

The best Forex brokers offer their customers a rich set of tools for analyzing charts. These tools will help you draw trendlines, support and resistance levels, as well as Fibonacci levels. Other tools are built-in indicators and oscillators, which can predict the upcoming price movement.

Fortunately, the MetaTrader 4 platform by default includes a rich set of trading tools. And if the required tool is missing, you can always create it using the MQL4 coding language, or hire someone to do it for you.

In addition, the largest Forex brokers offer a unique Autochartist tool. This is a separate platform that scans the market for trading opportunities. It gives you a forecast of how the price will move, and also builds support and resistance levels. This makes it an extremely useful tool, especially when determining your levels stop loss.

Forex execution speed

The Forex market is very dynamic and prices are constantly changing. Each Forex trade takes a certain time for its execution. The more time it takes to execute an order, the more the price will differ from the expected one.

Imagine that you are trading with a broker who needs 10 seconds to execute a transaction. When you decide to enter the market at a certain price, after 10 seconds the price may change. And there is no turning back, as you have already clicked a button to place a deal.

The choice of a broker with a high speed of execution of transactions is the key to success in trading. The average order execution time of the best brokers is 6 milliseconds. One second has 1000 milliseconds, which means that the order is processed almost instantly. Thus, you will enter the market at the price you want to receive.

Another advantage that the best Forex brokers provide is that they offer you to use VPS servers so that your transactions are not interrupted, even if you are having problems with the Internet.

See also who ECN brokers are and what are their advantages.

Customer Support

Regulation and trading conditions are important for choosing the best Forex broker for beginners. However, this is not all. The third parameter of a reliable Forex broker is excellent customer support.

The best Forex brokers in the market will answer your questions via chat, e-mail or call back to your phone number in a short time. Reliable Forex brokers have offices in major cities around the world and receive phone calls on business days. Thus, if you have an emergency, you can immediately get professional help.

Settlement of disputes

There are scam brokers on the market that you would like to avoid. A reliable Forex broker provides its clients with a strict dispute resolution policy to maintain trust.

You can ask the support team what instructions they have for resolving disputes, and how to file a complaint with their company and regulatory authority. A reliable broker will first consider the complaint within the company, and if it is rejected, you can always file it with the regulatory body that controls the broker.

Deposit replenishment methods

You may need the flexibility to deposit money into your trading account. Because different countries have different rules, fees may vary. Therefore, it’s convenient to choose the most inexpensive payment method for making a deposit.

The best Forex brokers will offer you a wide range of payment methods. Some of the most common methods are debit or credit cards, bank transfers through payment systems such as Skrill or Neteller.

Withdraw options

Withdrawing money from your trading account is one of the most important parts of successful trading. What is the point of having a profitable Forex trading strategy when you cannot get your profit?

Many Forex brokers will offer you many ways to replenish your account, but they will allow you to withdraw funds only by bank transfer. This is a limitation, as a bank transfer may not be the best way to withdraw funds to your location.

Choose brokers who can offer a wide selection of payment systems for withdrawing funds.

See also what quick money withdrawal brokers are .

Conclusions

Thus, when choosing a broker, first of all, see if he has a regulator license. This will help you keep your funds in the account safe, and in the event of bankruptcy of the company, all your money will be returned in full. In addition, you can always contact the regulatory authority to resolve disputes.

The second very important point when choosing a reliable broker is the provision of a wide range of services. This includes a variety of assets for Forex trading, low fees, high speed of execution of transactions, the availability of trading tools for technical analysis.

And the last, but no less important criterion for choosing the best Forex broker is the availability of a round-the-clock support service and a wide choice of ways to replenish a deposit and withdraw funds.

We hope that our recommendations will help you choose the best Forex broker for beginners and not fall into the tricks of scam brokers.

Read also the article "How much should I start trading on Forex?".