If you intend trading currencies, you have to take it seriously and treat it like a business. If you were running your own business, would you employ an accountant you do not know anything about. You would speak to your family, friends and acquaintances first and obtain references before you appoint an accounting firm. Yet, there are traders who opt for the first name they find in the list of Australian forex brokers without doing any relevant checks on the firm. Like an accountant, your forex broker is also going to work with your hard-earned funds and you should ensure that you can trust the firm.
Before you can trade, you need a forex broker. Some of these firms are much larger than others, some offer you tighter spreads and others offer more services than others. Each of the Australian forex brokers comes with its own pros and cons, but there are some basic factors you have to consider before you choose one.
- You need to find out where the broker is incorporated. Is the brokerage registered in Australia, the US, the UK or offshore?
- You also have to ascertain if the broker is regulated. If it is, you need to know where it is regulated
- You need to find out the size of the brokerage, the level of capital and how many employees are available to assist you
- You have to confirm if the broker offers you 24 hour support because you must bear in mind that this is a 24 hour business
It is best for you to opt for a large brokerage that is regulated in one of the major countries. This will ensure that you have the right to appeal in case the brokerage declares bankruptcy. Larger brokerages generally have the funds available to offer you a secure, stable infrastructure that will not collapse when the market becomes too busy. Opting for a brokerage with a large employee base makes it easier for you to place telephone orders if you experience problems with your internet connection or the market has turned and you need to place trades immediately.
Check your Australian Forex Brokers Statistics
If you opt for one of the Australian forex brokers, you should ensure that it is registered with the Australian Securities and Investment Commission. This will offer you peace of mind regarding its financial status and security in the event that the brokerage declares bankruptcy. If you opt for a broker outside Australia, you should ensure that it is registered with the appropriate regulatory bodies in that country.
In the U.S., all merchants who are registered with the National Futures Association need to meet strict criteria as regards their financial security. These brokers are required to submit regular financial reports to the regulatory body. It is possible for you to access a firm’s latest financial statements on the Commodity Futures Trading Commission’s website.
When you select a forex broker, it is important that you ensure you are dealing with a trustworthy, secure, experienced firm who will offer you all the support you need to make your trading experience a profitable one.
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