One of the most crucial decisions that you will ever make as a new trader is choosing a Forex broker in UK. However, there’s this fierce competition among brokers which are all being determined based on their cost and services offered. As the demand intensifies, more brokers join the space hoping that they can capitalize amidst the surge of retail investors.
But as a retail trader, how should you choose a broker? Although there are a lot of factors that need to be considered, your needs as a trader must be the basis of your decisions. You must know the type of investments that you want to take as well as your goals in trading. After considering these things, you can start to evaluate the features of your preferred broker.
Factors To Be Considered When Choosing a Forex Broker in UK
Usually, brokers offer the same types of investment options such as mutual funds, individual stocks, bonds, exchange-traded funds, options, foreign currency exchange, cryptocurrencies, and futures trading. The type of investment that you will take also determines the commissions that you will have to pay to the broker. You must take a careful look at these commissions when choosing a broker.
The reputation of your broker is the best proof of their work efficiency. You must choose a broker with a good track record. But, this does not mean that those who are new to the industry aren’t trustworthy at all. You must always check if the broker is registered to a regulatory body to ensure that they won’t get involved in fraudulent activities.
As much as possible, keep an eye on brokers that offer promotions like no account minimums and such. Most of the time, brokers require a minimum investment of $500 but there are also promotions that allow you to open a trading account with a small deposit.
Although you certainly won’t avoid account fees completely, there’s a chance to minimize it. Some brokers charge every time you close an account or when you make withdrawals. The best way to minimize these fees is, of course, to choose a broker that will not charge these fees. You can also avoid services that require extra cost.
Pricing and Execution
Most brokerages offer free trades which means that you won’t have to mind the cost every time you open a trade. However, if you are an active trader, you may need to have your trades executed at the best possible time and at the best price available. In this case, you must first know how much your broker charges you with these additional services.
Tools, Education, and Features
New traders will have to look for a Forex broker in UK who can offer a wide range of educational tools, trading tools, and features that can help them obtain their trading goals. Knowledge is very important in trading. Therefore, as a new trader, you must find a broker with a good source of educational tools like live webinars, how-to guides, glossaries, and video tutorials.