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The most reliable Forex brokers – the main criteria for choosing

As Forex is rapidly gaining popularity in Lithuania, the most important task for new traders is to choose a reliable Forex broker. Only the best Forex brokers are able to provide quality services, so in this article we will help you choose a trading partner that meets your needs.

In the article about Forex trading, we got acquainted with the basics of the currency market and the essential principles of its operation. So, if you are interested in trading currencies or other instruments and you want to further deepen your knowledge, now is the time to choose a Forex broker and open an account with him. But first, we would like to point out that the importance of this step is very often underestimated by beginners who are starting to trade in the Forex market. The quality of the services provided by the chosen broker will determine a significant part of your final trading result, therefore, when choosing your trading “partner”, we recommend paying special attention to his reliability.

But which Forex brokers are the most reliable and how do you choose the one that best suits your needs from a fairly large number of them? In this article, we will get to know all types of Forex brokers in more detail, discuss the main criteria for evaluating brokers, and advise which Forex broker is the best to choose for a trading novice. We hope that the information presented in the article will help you make the right decisions and avoid problems related to the quality of the broker’s work.

Who are Forex brokers and why are they important?

Forex is a huge global currency exchange , where currencies are traded 24 hours a day. Because the Forex market is so large, there are many different participants: banks, investment companies, insurance funds, international companies, Forex brokers and you, the small investor. However, small investors cannot even compare with the large participants of the Forex market in the volume of their orders, so they can trade currencies only through intermediaries. So, Forex brokers are the intermediaries between small investors and the Forex market. With the help of a broker, with even a small amount of money, you can easily enter the huge Forex market and trade currencies in it through the trading platform provided by the broker.

The best Forex brokers not only provide their clients with quality access to the currency market, but also provide consulting services, Forex training for beginners, and trading platforms that allow investors to conveniently place buy and sell orders. It is with the help of the most reliable Forex brokers that small investors can trade currencies around the clock, five days a week. Of course, all these services are not provided for free, so Forex brokers charge a certain amount of commission for mediation.

So, now you see why a reliable Forex broker is so important to your trading results. All that’s left is to pick the best one, right? But how to do that?

How to choose the most reliable Forex broker?

Since “Forex” is rapidly becoming popular in Lithuania and the world, there are quite a few “Forex” brokers providing investment services operating in the market. When competing for new customers, brokers prepare offers based on different business models, which can differ greatly from each other. In fact, even seasoned investors could be overwhelmed by the sheer number of offers offered by Forex brokers. So, it can be very difficult for a beginner to choose a reliable Forex broker by himself, so we will present the most important criteria that must be considered when choosing a broker:

Order execution method

Regulation of broker activity

Minimum deposit

Leverage

Number of trading instruments

Trading platforms are offered

Taxes apply

Customer service

Order execution method

Probably the most important thing when choosing a reliable Forex broker is to find out what method of execution of customer orders the broker uses. All Forex brokers in Lithuania and other countries are divided into DD (Dealing Desk) and NDD (Non-Dealing Desk) types according to the method of execution of orders.

DD-type brokers do not take their clients’ transactions to the interbank foreign exchange market, but “create” this market themselves, buying currency quotes from Reuters, Bloomberg or other data sources and showing them to their clients. This type of Forex brokers are also called market makers, because it is in the currency market created by them that clients trade. It can be said that DD-type brokers trade against their clients: when the client buys the currency, the broker sells, and when the client sells the currency, the broker buys. Since the DD broker takes the opposite side of the ongoing transaction, it is easy to predict that it is among this type of Forex broker that most cases of unfair manipulation of currency quotes occur.

NDD-type brokers transmit their clients’ orders directly to the interbank foreign exchange market, so instead of trading against their broker, clients trade with many other traders in the market. The price provided by the broker always corresponds to the real market price. In other words, after the client submits an order to buy the currency, the broker processes this order and sends it to the market, where it finds a real seller of the currency. It is important to note that NDD brokers mostly earn from the commissions they charge, so it is important to them that their clients trade as successfully as possible.

Regulation of Forex broker activity

Regulation of the broker’s activity is another important criterion for choosing a reliable Forex broker. First, you should make sure that the chosen broker is generally a legally established and operating person. You can usually easily find the registration information and licenses available for a reputable broker on their website. You should also know that Forex brokers in Lithuania can provide services only if they are included in the list of financial market participants published on the website of the Bank of Lithuania. Be sure to check whether your chosen broker or his representative office is registered in this list. The Bank of Lithuania has also prepared a list of entities that do not have the right to provide any financial services in our country, but offer them online. Be sure to check out this list too!

Activities related to trading in financial markets are regulated in many countries around the world, so a reliable Forex broker will also be supervised and regulated by the relevant financial authority of the country where the broker is registered. This is very important, because in the event of a dispute with your broker, you will be able to turn to this institution for mediation in solving the problems that have arisen. Forex broker regulatory authorities to be aware of:

FCA – Financial Conduct Authority of the United Kingdom

CySEC – Cyprus Securities and Exchange Commission

ASIC – Australian Securities and Investments Commission

IFSC – International Financial Services Commission

EFSA – Estonian Financial Supervisory Authority

Minimum deposit

Before opening a trading account, the Forex broker will ask you to make a minimum deposit. Depending on the broker, the size of the minimum deposit is usually around 100-200 euros. You can also find brokers that allow you to open “micro” accounts and start trading by depositing just 10-20 euros. It should be noted that DD-type brokers often offer their future clients a first registration bonus instead of a minimum deposit, so if necessary, trading in the currency market can be started for free.

Leverage

Forex beginners shouldn’t trade with high leverage, but they should look into what leverages could be chosen for future trades. For example, it is possible that as your knowledge and experience grow, you will decide to trade with more leverage in the future, but your chosen broker will not be able to offer it. So, think about this question now so that you don’t have to waste time looking for a new broker later. Forex brokers usually offer the following leverages: 1:20, 1:40, 1:50, 1:100, 1:200, 1:500, 1:1000.

Number of trading instruments

When choosing a Forex broker, you should also look into what other trading tools, in addition to currency trading, he can offer. The most reliable Forex brokers give their customers the opportunity to trade not only currencies, but also CFD trading of commodities, cryptocurrencies, shares, ETFs, indices. After all, if you decide to trade not only currencies in the future, you will be able to use the services of an existing broker instead of looking for a new one.

Trading platforms are offered

When you choose a Forex broker, you also choose the trading tools it offers. Your most important trading tool is a trading platform that gives you access to the financial markets. The quality of the trading platform and its technical capabilities can be of great importance to your trading results. The trading platform must be convenient, simple and have technical analysis tools installed. The most popular platforms offered by brokers: Metatrader, Act Trader, Alpari Direct and ahorro.PRO. Some brokers also offer their own trading platforms. Basically, the name of the tool does not matter at all, it is important that it is convenient and works reliably. Trying trading platforms is very easy – most Forex brokers offer free demo accounts where you can trade with the trading tools provided by the broker without any risk.

Taxes apply

As we have already mentioned, even the best Forex brokers do not work for nothing. No matter what investment instruments you trade, you will always have to pay certain fees to the broker. The broker receives his earnings through a set “spread” or the applicable commission fees for the execution of orders. Of course, it is always important to look for a broker with low fees, but sometimes it is more profitable to choose a broker that is more expensive but provides better quality services. After all, service quality also costs money. Also, don’t be fooled by the low fees advertised by brokers. Often, Forex brokers indicate an average fee for all trading instruments, so the published amount will not necessarily apply to the specific trading instrument you choose. So, if you have any questions about the fees charged by a broker, contact their customer service department and find out all the details.

Customer service

The most reliable Forex brokers can provide high-quality 24/7 customer service. When trading in the financial markets, speed is everything, so it is very important that the customer service of your chosen broker is able to solve the problems as quickly and efficiently as possible. Just call the broker of your choice. Ask him about applicable fees, available trading tools, leverage, trading platforms offered and their benefits, minimum deposit size and the possibility of opening a free demo account. The completeness of the given answers will allow you to decide whether the quality of customer service satisfies you.

Which Forex Broker to Choose for a Newbie?

When experienced speculators choose a Forex broker, their choice usually depends on the applied Forex trading strategy, but for newcomers to the financial markets, in our opinion, the most attention should be paid to the quality of services and customer service provided by the broker. After all, it is very important for Forex beginners to constantly learn and improve, so a good Forex broker should not only ensure smooth technical support for its clients, but also organize training, seminars and other educational activities that would help achieve the best trading results.

It is also worth noting that a number of experienced traders prefer NDD-type Forex brokers more often. Usually, traders fear that in the virtual currency market they have created, a DD-type Forex broker may manipulate currency prices or otherwise influence trading results in their favor. Meanwhile, NDD-type brokers allow you to trade in the real currency market. However, on the other hand, Forex in Lithuania is a strictly controlled activity that is supervised by the Bank of Lithuania, so you should not be afraid to try the services provided by both types of Forex brokers yourself and compare them.

Forex brokers worth trying

The abundance of Forex brokers is indeed very large, so choosing a reliable broker is quite difficult for beginners who are just starting to warm their feet in the financial markets. Trying out as many brokers as possible can be a waste of time, so here is a list of Forex brokers that we suggest you try first:

Admiral Markets

Forex broker Admiral Markets.

Admiral Markets is an NDD type broker registered in Estonia in 2001, regulated by FCA, ASIC, EFSA and CySEC financial authorities. The broker provides access to the Forex, Commodity, Indices, Stocks, ETFs and Cryptocurrency markets and offers professional MetaTrader4 and MetaTrader5 trading platforms. The minimum deposit is 100 euros.

FxPro

Forex broker FxPro.

FxPro is an NDD-type broker registered in the UK in 2006, regulated by the FCA and CySEC financial authorities. The broker provides access to the Forex, Futures, Indices, Stocks, Precious Metals and Energy Commodity markets and offers professional MetaTrader4, MetaTrader5 and cTrader trading platforms. Minimum deposit is $100.

Plus500

Forex broker Plus500.

Plus500 is an NDD type broker registered in Israel in 2008, regulated by ASIC, CySEC, FCA and ISA financial institutions. The broker provides access to the Forex, Indices, Cryptocurrencies, Stocks, Commodities, ETFs and Options markets and offers its own Plus500 trading platform. The minimum broker deposit is $100.

RoboMarkets

Forex broker RoboMarkets.

RoboMarkets is an NDD-type broker registered in Cyprus in 2012 and regulated by the CySEC financial institution. The broker provides access to the Forex, Stocks, Indices, Cryptocurrencies, Commodities, and ETF markets and offers professional MetaTrader4, MetaTrader5 and its own R Trader trading platform. The minimum broker deposit is 100 euros.

Alpari

Forex broker Alpari.

Alpari is an NDD-type broker established in 1998 and currently registered in St. Vincent and the Grenadines, regulated by the FSA (Financial Services Authority of St. Vincent and the Grenadines). The broker provides access to the Forex, commodity, index and stock markets and offers professional MetaTrader4 and MetaTrader5 trading platforms. The minimum deposit is 20 euros.

Or is it worth trying synchronous trading?

Synchronous trading is following and replicating the actions of another trader. This trading method is also very suitable for Forex beginners, as it allows you to observe the actions of experienced speculators in the market up close and under real conditions. One of the most popular and oldest synchronized trading platforms is ZuluTrade. It can automatically copy and analyze the transactions of professional speculators. If the chosen speculator trades successfully, then you earn a profit accordingly. In case of an unsuccessful trade, of course you have to share the losses. You can trade currencies, CFDs, cryptocurrencies and other financial instruments on the ZuluTrade platform. One of the biggest advantages of the ZuluTrade synchronous trading platform is that it allows you to create a free demo account and test the platform yourself without risking any of your own money.

The best way to test a Forex broker is with a demo account

Forex is a risky market where without enough experience you can quickly lose all your money, so even the best Forex broker cannot protect you from your own bad decisions. Although the quality of the services provided by the broker determines a significant part of the final trading result, the broker is only an intermediary between the market and the trader, and the final result will always depend only on you. So, if you have decided to trade Forex, you must be sure that you already have enough knowledge about trading in this risky market.

Well, if you are finally interested in currency trading and you want to further deepen your existing knowledge in real trading, then it’s time to choose your Forex broker. We hope that the tips in this article will help you to do so successfully. And don’t forget that the best way to test your chosen Forex broker is with a demo account. Good luck in trading!

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