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5 tips on how to find the right forex broker

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In forex trading, a certain amount of currency can be bought and held until the exchange rate rises or changes. If the exchange rate has developed favorably, the currency amount will be exchanged back at a profit. 

Best Forex Brokers : If you now exchange money in an exchange office, there is a better method for you and that is via an online exchange office called a “broker”.

Forex – the main financial market

One can exchange currencies through an online broker or forex broker, taking advantage of the ever-changing exchange rates. As with a currency exchange for a holiday, different currencies can be purchased and profits can be made with them. Currencies are always traded in pairs. The first currency in the pair is the base currency, the second is the quote currency.

The field of foreign exchange trading includes special wishes and also individual requirements for the forex provider. For this reason, there will not be a best provider. The investor will determine for himself whether a forex broker meets the wishes of his investor. 

Forex brokers who have a good reputation offer new customers the opportunity to open a demo account. This is how you can test the forex provider. However, it must be mentioned that there are quite hard criteria that a forex broker should meet.

5 tips on how to recognize a good forex broker:

Especially for the beginner the question arises how to find the right forex broker. Many forex brokers are based in Cyprus or offshore or advertise with bonus payments on the first deposit. But this bonus payment should not be relevant for the newcomer to forex trading.

Keep the following 5 points in mind when looking for a forex broker:

1. The demo account

This account is the only way to get acquainted with trading without incurring higher initial losses. However, there are still many forex brokers that do not provide a demo account for a beginner. This means for the beginner that he should include another broker in his shortlist. If no demo account is created, the learning content cannot be implemented.

2. Continuing Education Opportunities

Forex trading is governed by its own laws. If you just open a position and believe that there is a 50:50 chance of winning, you will lose. If you want to trade successfully, you have to acquire solid training. Good brokers don’t just provide their customers with an e-book. Tutorials and webinars are the best basis for getting started with the demo account. Video archives should also be made available. For the advanced investor, so-called face-to-face seminars are a good opportunity to exchange ideas with other traders.

3. Cost and Dedication

If you open a trading account and want to trade, you have to expect costs. Actually, all brokers require a minimum deposit when opening a trading account for the first time. This can be from 100 euros to 1000 euros. If an initial deposit is still judged to be too high, you should take a look at other providers. Preference should be given to those houses that don’t raise foreign exchange trading like it’s on a fairground, but as a serious business. A margin is also required for trading, which results from the leverage of the trade.

4. The cost

Of course, when looking for the right forex broker, the costs, the spread, play a role. The spread itself is calculated in forex trading based on pips, which is the last decimal place of a currency. Since the interest rate varies from broker to broker, a comparison is worthwhile.

5. The deposit guarantee

Most forex brokers are based in Cyprus. The deposit guarantee in Forex is not based on the EU directive, but is significantly lower. The funds are managed by third-party banks. With a German provider, it can be assumed that the provider is a member of the Deposit Insurance Association of German Banks, which means there is greater security. So check this out beforehand.

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