The competition between forex brokers and forex dealers is incredibly high, growing with every passing day. They are all striving to gain the forex traders business by offering more and more features and services. They all market the benefits of trading with them and advertise the exemplary reviews of the relevant trading platforms. So, for the beginner trader choosing a broker or deal is an incredibly difficult task.
Finding the Right Forex Brokers
One of the core challenges facing a new trader is to investigate different brokers and determine whether or not their capitalisation is adequate and if they are regulated by their base country. These novice traders may not fully understand the trading rules and requirements, however all information is available via online resources. It is vital that one researches all these aspects and critically examines a brokers account for while the broker may offer outstanding trading platform features, it is all for nought if they are untrustworthy.
The Different Countries
One of the most appealing aspects of the forex market is that all trading is completed online. Traders do not trade ‘hand-to-hand’ as in the futures market and all trading is virtual. This means all traders can trade from any location, as long as they have a Wi-Fi connection.
As the forex market operates 24-hours per day, six days per week, they require several exchange bases to coordinate with the different time zones. It is these countries which have the strongest currency pairings, and if you live outside the base country it is recommended you work with an online forex broker within one of the base countries. This is to ensure the broker is regulated with the country. The base countries include:
– The USA
– The UK
– The Euro zone countries
The Importance of Regulations
If you live outside the base countries, it is recommended you opt for an online broker within one of these countries. However, if you choose to work with a local forex broker or dealer it is important to remember that the financial regulations may be different. While this does not seem significant, it is vitally important to forex trading as the base countries regulatory agencies supervise trades to ensure all trades are legitimate.
Another important point to remember when choosing an off-shore or local forex broker is the criteria to become a broker. In many countries the rules are rather stringent; however in some they are quite liberal. This can affect trading regulations as the forex brokers may seem less reliable to the supervisory regulatory agencies.
Does the Location Matter?
In conclusion, the location does matter. It is a personal preference as to which nationality forex broker you choose to work with, however the recommended option would be a forex broker within one of the base countries mentioned above. Yet, if you are looking with work with a forex broker from the Euro zone, be sure to check the broker is located in one of the countries with a strong regulatory system such as France or Germany. It is best to stay within major bases rather than choosing a country with a small financial sector.
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