4 Essential Questions to Ask Your Prospective Forex Broker

As you'll be putting a portion of your hard-earned money into a brokerage's hands, it's important to verify the reliability and expertise of the brokerage. These four essential questions will help you know what to expect from a reliable brokerage.

1. What Does Your Service Suite Comprise?

A good and reliable brokerage will offer you a suite of services that will help you with your forex trading journey, such as:

• A user-friendly platform
• Advanced charting and analysis tools
• Educational resources
• Customer support

2. What Are Your Trading Costs and Related Offers?

Different brokerages will offer different fees for their services—generally, there are three kinds of expenses that you might have to pay as a trader:

• Spreads: A good brokerage will offer tight spreads allowing you better trading conditions. 
• Commissions: Most brokerages charge a small commission on each trade that you make—find a broker with low commissions to ensure better trading conditions.
• Markup offerings: Check the price differences in instruments between brokerages and choose one with the more suitable price.

If you're trading with leverage, be sure to check the brokerage's margin requirement as this will determine how much money you'll need to put down as a deposit—a low margin requirement means a smaller deposit.

3. Are You a Regulated Forex Market Service Provider?

All good and reliable brokerages are regulated, meaning they must adhere to certain rules and regulations set by the financial authority. This protects you as a trader because you know that the brokerage is held accountable for its actions.

4. What Is Your Speed of Order Execution?

In the fast-paced world of forex trading, every second counts and you don't want to miss out on any potential profits because your brokerage was too slow in executing your trade.

It's widely thought that a good execution time of a brokerage's trades should be less than 100 milliseconds. A good way to test how fast the brokerage is in real-time trading conditions is to open a demo account and place a few trades.

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