How to find an ethical Forex Trading Broker?

How to find an ethical Forex Trading Broker?

by Ivan Tan

The foreign exchange trading (Forex trading) is a highly volatile but profitable online trading which involves hundreds of billion dollars daily. Online Forex brokers thrive hard to gain from the huge market. There is a significant growth in the number of online Forex brokers. So, you have to give high attention before you ask someone to be your trading partner. Some essential tips are given below to have a hassle free trading.

Online Forex trading practices decentralized method for the easy transaction of foreign currency but some unprincipled brokers gain advantage from this market method. You have to be very vigilant for not to be trapped with such fraudulent brokers. Please stick on to the below given tips to avoid fraudulent.

1. Please ensure that you have contacted all of the references provided by the broker. Give an ear to their opinion about the broker. But, do not choose the broker by relying only to the endorsement of the references.

2. Make sure that the broker has proper registration with local regulatory authorities. For US based brokers, you can cross check their registrations as FCMs (Futures Commission Merchants) with the CFTC (Commodity Futures Trading Commission) and NFA (National Futures Association).

3. Verify their account requirements like Minimum deposit, leverage, and, spreads and never fail to compare the rate with other brokers. Ask them whether they levy any commission or lot fees or are there any hidden fees. Some fraudulent brokers charge hidden fees.

4. Select only brokers who provide user friendly environment because it will help you to understand the trading and can easily navigate through their website. Double check the facts (such as chart) given in the website of the broker; there is a chance of exaggeration in those information. Some websites facilitate new users to have a demo account in order to acclimatize with the new trading environment.

5. Some brokers may trick you by quoting significantly low commission and spreads. In this case, there are chances of requoting by the broker. It means the broker requote you and not the prices called by you for the two currency trading.

6. Requtoing by the broker once in a blue moon is a normal practice but if you find the broker do it often, you must be very vigilant. Requoting may cost you more than 9pips. It is advised that you must select only brokers who adopt 'no requoting' policy.