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How to choose the right broker review?

We usually choose the Forex broker at the beginning of our journey with the currency market, but it also happens that if we have experience, we simply want to change it. Here are the factors to consider in order to make the absolute best choice.

Broker review – how to choose the best specialist?

Most people do not realize how important is the fact whether the broker is regulated and what it protects the client from. For the client, the most important thing is that the broker should be regulated (it is not about registration but about regulation) by KNF or the Financial Supervision Authority. Thanks to this the investor can be completely calm about his funds. Especially that in this case they are covered by the system of compensation by the National Depository for Securities. The investor is 100% protected up to EUR 3,000 and up to 90% up to EUR 22,000.

If we would like to choose a foreign broker, it should be supervised by the British FCA, there we can do much more than in Cyprus. Of course, we’re talking about black scenarios here, but everyone is worth considering. Therefore, before creating an account with a broker, one should check whether it is registered, and above all regulated by the KNF and whether it is not on the list of public warnings (this situation completely deletes the broker). Remember also about clients reviews.

ECN brokers – our broker’s offer

Actually, the most important thing about the regulator is information about the broker’s offer. What are the transaction costs, how many instruments it has in its offer and what type of broker it is.

The ability to distinguish the leverage for customers ended when the Financial Supervision Authority stated that it is high leverage that is the cause of customer losses, and to ensure investors’ safety has taken appropriate steps and reduced the leverage to 1: 100. Currently, all brokers who operate in Poland had to comply with the regulations, which is why the leverage does not play a significant role as a distinctive element at the moment.

It is worth paying attention to the lever that is offered on CFD contracts for indices, raw materials or shares. Here the difference can be significant.

This is important for long-term investors and those who are looking for a specific instrument for which they would like to conclude transactions. In general, the more instruments the better, but you must realize that most probably even if the broker has a thousand instruments, we will not use all of them.

Transaction costs are one of the most important things to remember when choosing a forex broker. Often, we do not realize how much we really overpay. Until now, there are brokers who offer 2-3 pips spread on major currency pairs.

Very important speed of order execution

The speed of order execution is equally important. This, unfortunately, boasts a very small part of brokers on the market. What should be the optimal time of order execution on the broker’s side from the moment of clicking to the appearance of the transaction? Time below 100 ms can be considered very good, most traders probably will not notice the difference even if this value increases to around 200 ms. Remember that 100 ms = 0.1 seconds.

Of course, the faster the broker realizes our orders the better. It must be remembered that we also need to ensure that the ping to the platform is as small as possible.

The speed of order execution is particularly important at the time of high volatility in the market (here, milliseconds can be very valuable and sometimes decide whether the day will be a profitable or lossy day), day traders know this perfectly.

 

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