Trading in the Forex market has become one of the favorite investments for many traders around the world. Are you interested in starting investing in Forex?
In order to deal with complete calm and in a safe way in the Forex market, you need to check the best brokers for forex trading in US. Your broker will give you the tools to get started.
Especially in the US, there are very strict regulations regarding the Forex market, and only a handful of brokers are approved to deal in the market. Make sure to research your broker’s regulations to avoid falling victim to scams or fraudulent operations.
But, why to invest in Forex?
The Forex market is the largest and the one with the highest liquidity. Changes in the market are sudden and it’s in continuous fluctuation. This means that making a profit is a strong possibility, which obviously doesn’t come without risk.
Let’s start from the beginning. What is Forex? And, how do you choose a Forex broker?
What is Forex?
Forex, or FX, makes reference to the exchange of one currency for another. There are many reasons that motivate the exchange of currency: commerce, travel, or business.
While other markets have a physical location, the currency exchange market doesn’t. It’s all done online (what is commonly known as OTC – over-the-counter) and it’s open 5 and a half days a week, 24 hours a day. This is why is such an active market at all hours of the day, that is no surprise it is attractive to investors with hectic schedules or frequent travelers.
In Forex we talk about forex pairs, which are two currencies paired up for the exchange. There are fur groups of pairs.
- Major pairs: main currencies. It makes up more than 80% of the exchange in the Forex market.
- Minor pairs: currencies that are exchanged less often and usually paired among themselves.
- Exotic pairs: currencies from stronger economies paired to currencies from smaller economies.
- Regional pairs: currencies in one same regional block.
While everyone that has changed currency has made a forex transaction when it comes to business the goal is to make a profit.
How to choose a Forex broker?
These are some of the most important aspects you should consider when choosing an online forex broker.
Security
Forex brokers are regulated by international and national entities that put in place certain conditions to assure the traders’ safety when operating online. Making sure your broker is regulated by these entities guarantees your own security.
Regulatory bodies are located in the US, the UK, Germany, Australia, Switzerland, France, and Canada.
Costs and fees
Research your choice of broker to make sure their commissions and fees are known to you and there are no hidden fees.
Some brokers charge a higher commission on smaller transactions, while others may do it for free. In this case, expensive doesn’t necessarily mean better. But reliable brokers usually may charge to trade through them.
Online trading platform
Each broker has their own slightly personalized trading platform and since all the forex transactions will be happening there, you need to make sure it presents all the information you want, as well as the features you will be needing for forex trading.
You also want to check how easy and user-friendly it is compared to your level of expertise. Some brokers offer the possibility of trying a demo of the platform before committing your money.
Customer service
The last point is to make sure your broker is offering a reliable customer service that you can reach through the phone, email, or even by chat.