Out of the huge variety of offered brokerage services, sometimes it can be challenging to choose the most suitable one for oneself’s requirements. However, there are a few factors to be taken into consideration while choosing a brokerage company. Earning money on exchanges depends not only on the skills of the trader but also on the conditions in which he trades. Choosing a forex broker is an important decision that can affect the success of trading and the safety of the invested funds.
Forex Broker Categories:
Market makers: Brokerage houses that provide trading services for investors in an effort to keep financial markets liquid. Brokerages that act as a market marker typically operate a dealing desk and makes their money by quoting a bid/ask spread to customers. They charge the spread on each asset they offer. However, market makers are compensated for the risk of holding assets since they might see a decrease in the value of an asset once it has been acquired from a seller and before it is sold to a buyer.
ECN brokers: ECN brokers are non-dealing desk brokers, meaning that they do not pass on order flow to market makers. Instead, they match participants in a trade electronically and pass the orders to liquidity providers. Such brokerage companies use electronic communications networks (ECNs) in order to give customers direct access to other participants in the Forex market. Their earnings are based on the losses incurred by the traders plus the commission accrued for transferring part of the profit from trading operations from the most successful exchange specialists to other users from the ECN system.
STP brokers: or Straight Through Processing is the model which is used by FTD Limited, are brokerage companies that pass traders’ orders directly to liquidity providers. STP can be seen as a silent link between the market and the trader. This model allows clients not to worry about their deposits because the broker does not show much interest in clients’ personal finances. All trade transactions go straight to the market. In this case, as the broker is passing the orders directly to their liquidity pool, orders are filled at the best price possible.
The Most Important Factors to be Taken into Account While Choosing a Brokerage:
Reputation and Reliability
A company that a trader trusts his money must be reliable. No matter what favorable conditions it offers, and no matter how high the income is, if a broker, in the end, turns out to be a fraud, or simply goes bankrupt, the trader will not be able to withdraw the funds along with profits earned.
Before choosing one, it is vital to do comprehensive research on the firm, read reviews, talk to other traders who already work with them, open a demo account to test the platform, ensure the broker is licensed and regulated by a reputable authority, etc.
Licenses and Regulation
The presence of reputable licenses from regulatory organizations is the most important criteria for determining the reliability of a broker. If you ignore this factor, you can get an extremely unpleasant surprise in the form of a loss of your deposit after a short time. If a company does not have a license, then its activities are not controlled in any way and it is not known whether this company actually exists, or whether it only has an attractive website. Companies licensed by a reputable regulator strive to provide high-quality service and offer a good trading environment. And this is not surprising, because the clients of such brokers can file complaints with regulatory organizations, and they, in turn, will apply sanctions to the violator, up to and including termination of the license.
Speed of Order Execution
For traders, the execution time of orders is fundamental and should be fractions of seconds. Very often, the price movement of a currency pair in 2 seconds can be 30 or 50 points, and when an order is activated after clicking, for example, after 2 seconds, it is no longer relevant. It is vital that your brokerage fills your orders with lightning speed at the best possible prices.
Ease of Deposits and Withdrawals
You should pay attention to the methods of depositing and withdrawing funds. Some brokerage companies may restrict the ability to withdraw to the card. Reliable forex brokers will allow you to deposit funds and withdraw your earnings hassle-free. Brokers really have no reason to make it hard for you to withdraw your profits because the only reason they hold your funds is to facilitate trading.
The trading platform is the connection to the market for the investor. As such, traders should ensure that the platform and any tools are simple to use, visually appealing, have a range of technical and/or basic analysis tools and that trades can be easily obtained and exited. Try to choose a brokerage that offers a convenient Forex and CFD platform that suits your individual needs. We advise you to choose only those Forex brokers that offer trading through the most popular client terminals MetaTrader 4 and MetaTrader 5. These most popular platforms are considered simple, reliable and, at the same time, have wide functionality and the ability to install additional programs, trading robots, advisor indicators, etc.
Rich Selection of Forex Pairs
Today, you have a variety of trading tools for trading in the Forex market. The wider the choice of instruments, the more diverse the opportunities for a trader to make money. You can come to a decision to start considering portfolio diversification. Because of this, it is essential to find a broker that offers a rich selection of currency pairs that spans all minors, majors, and exotics.
Efficient Customer Support
The help of the company’s consultants may be required even when all services work perfectly, but some important nuance needs to be clarified. In such cases, it is very important that the support service responds promptly to traders’ requests. The competence of brokers when dealing with account/technical support issues is just as critical as their performance on executing trades.
Why Choose FTD Limited?
Our company is formed by a group of financial services industry professionals, who have a long and rich experience in the financial market. FTD Limited was formed after analyzing the market, all of the pros and cons of the offered services, taking into consideration the requirements and wishes of customers worldwide, in order to reach perfection in our services. FTD Ltd is incorporated under the laws of the British Virgin Islands as a BVI BUSINESS COMPANY with registration number 1944994, licensed and regulated by the BVI Financial Services Commission (FSC) under Investment Business Licence number SIBA/L/19/1123.
We offer Segregated Accounts, meaning that customers’ funds are always safe, holding funds of a customer separated from the funds of our company in the interests of the customer’s security.
We are an STP-type of a broker, as mentioned above in the article. STP brokerages cannot take a position against the client. Additionally, the orders are filled at the best price possible, with a high execution speed, making it convenient for the client to fill the order at the desired price.
We do not have Transaction Costs.
We provide web and mobile access to the latest of the generation MT5 platform, which is the most popular and user-friendly platform offering a variety of fundamental/technical analysis tools; economic calendar; alarms, etc.
We offer a free 14-Day trial demo account with $100.000 virtual cash available to start testing your strategies as well as our services before deciding if you want to start working with us.
Ease of Deposit and Withdrawal also makes FTD one of the most convenient brokerages, since you can deposit and withdraw money any time you wish by just transferring to/from your credit card.
Information of BVI FSC:
The BVI Financial Services Commission is an autonomous regulatory authority responsible for the regulation, supervision, and inspection of all the British Virgin Islands financial services. It was established in 2001 pursuant to the Financial Services Commission Act, 2001 and exercises control over the financial activities of companies registered in the British Virgin Islands. Among the priority tasks of the organization under consideration, it is worth highlighting combating money laundering.
The Commission is now overseeing all regulatory functions previously performed by the Government through its Department of Financial Services; ensuring the independence of the supervision of financial services; and fulfilling international obligations to prevent white-collar crime globally, while at the same time protecting the privacy and confidentiality of legitimate business transactions.
The Commission also has new responsibilities, such as promoting public awareness of the financial system and its products, tracking the scope of controlled operations, reducing financial crime, and preventing market abuse.
The regulator is offshore, however, this does not simplify the process of obtaining a license. An offshore zone has always been considered more attractive for financial institutions for doing business, but not all regulatory organizations are credible. The positive side of the FSC BVI regulator is that it undertakes to deal with complaints from customers.
So, in order to finally decide which broker to choose on the Forex currency market, you need to think over everything to the smallest detail, including the factors we have mentioned above. It is better to spend a couple of days thinking and studying companies than incurring losses later. It is important to choose a broker with whom you are comfortable working.
For any additional questions you might have, do not hesitate to contact us.
Wishing our readers a great and profitable week!