Despite its volatility, the forex market is a very good market to invest in at the moment. Open Europe reported that prices are regularly fluctuating from 50 to 100 pips in 2022, making it very profitable for traders. This means that people can make more money for every trade they perform. This makes forex an advantageous market that many are already utilising and looking into joining this year.
However, before you start trading, you must first choose a forex trading platform. To start, here are a few things to consider:
One thing to assess when choosing a trading platform is the currency pairings it offers. Some of the most traded currencies are EUR/USD, USD/JPY, and GBP/USD. These are also considered the most profitable currencies because of their high liquidity. This means that they are easily bought and sold, and there is a high number of trades made for these pairs. As such, people can more easily profit from them.
Before committing to a platform, be aware of whether your preferred currency pairings are offered. If you don’t know where to start, consider these popular pairs. Ensure that they are available and traded on the platform by checking their About page or Frequently Asked Questions section. There’s commonly a list of the currency pairs offered in these areas.
Compliance with regulations
In choosing a trading platform, regulatory compliance is very important for safety. The Financial Conduct Authority (FCA) is responsible for regulating financial services, including the forex market. They ensure the protection of consumers and traders by implementing rules for platforms. Today, they are well-known for being one of the most reputable regulatory bodies.
To know if a trading platform is FCA-regulated, go to the UK FCA register website (register.fca.org.uk). Then, type the trading platform’s name or license number in the search bar. If it’s licensed, the results will reveal that its status is ‘Authorised’. However, you may also encounter a status that reads ‘EEA Authorised’. This means that the platform is authorised in a different country, but is allowed to operate or has a branch in the UK. Checking a platform’s regulation compliance protects you and your finances as a trader.
Ideal account features
Forex platforms will each have their own account features, and you need to always look for three: ease of deposits and withdrawals, commissions, and trading tools available. Some other features to consider are deposits, commissions, and withdrawals. In terms of deposits, platforms usually offer as low as $50 to start trading. Of course, the amount you’re willing to pay will influence the platform you choose. If you’re new to forex, a low initial deposit can make you feel more comfortable in starting your journey as it’s not a big amount to lose.
Platforms take commissions for their services. Some take a commission per trade. If you’re going to trade often, this would also mean that they would get money just as frequently. However, other platforms can charge a percentage of the difference between the bid and ask of a currency pair. This can be good if there’s only a small difference since the platform also gets a small commission.
Lastly, choose a platform with the most features that can help you make more informed trades, like charting software and trade journals. The MetaTrader 4 platform on FXCM allows for precise lot sizes, which helps mitigate most risks associated with forex trading. A feature to set stop loss limits your losses when opening a new trade as well. Meanwhile, something like a take-profit order tool lets you close an open order when it reaches a certain profit that you set. Selecting a platform with features that fit your needs makes the trading process convenient.
The forex market is open 24-hours a day (for 5 days a week), so customer service must be available at all times. This is especially important for new traders so they can reach out to staff for questions or concerns. A platform that has round-the-clock customer service and support is a prime choice because issues can pop up anytime in a market that’s almost always open. For instance, if a transfer isn’t pushing through in the middle of the night, you can be assured that there’s someone who can immediately assist you.
Choosing a forex platform should be based on your needs but it must also meet certain standards like regulation compliance. After all, keeping your finances safe should be a top priority. For more financial advice, check out the Economy section on our site.