Forex brokers are the link between traders and the market. The popularity of forex trading is growing, and it is possible that more and more people will be able to access the forex market thanks to forex brokers. As a result, it is critical to select a trustworthy forex broker. In essence, they act as your agent, handling all transactions on your behalf. Given the abundance of brokers, selecting the best forex broker for your trading needs is difficult. When selecting a broker, you must be very deliberate and precise.
You should first familiarise yourself with the various account types, spreads, commissions, and broker types. Also, watch out if the broker is regulated or unregulated. It is advised to opt for regulated forex brokers for additional safety of funds and information. However, the fact that a broker is unregulated does not imply that they are dishonest. Even some unregulated brokers provide excellent trading services to their clients. Because getting a regulatory service is quite expensive, a lot of genuine & reliable forex brokers are operating without holding a regulatory licence.
In the article further we will discuss various factors you should consider before choosing your best pick.
Major Differences Between A Regulated And Unregulated Broker
- Regulation– Regulated brokers are trustworthy because they have obtained an operating licence after meeting the requirements set by top-tier overseeing authorities like FCA, CySEC, ASIC, etc. Regulated brokers go over-and-beyond to provide the best services possible. Also they provide their clients with risk management, infrastructure support, staff training, and financial stability. Whereas, there is no such security with an unregulated broker.
- Safety– There’s no doubt that regulated forex brokers are safe and reliable. All regulated brokers keep the clients funds segregated into other accounts which are coordinated with top-tier banks. Also, they provide negative balance protection of funds. However, with many unregulated brokers this feature is missing most of the time.
- Services– When the broker is governed by several top-tier authorities, they are most likely to provide high-quality services. The accounts, platforms, tools, educational materials are all top-notch and satisfactory.
- Reliability– Because you share a lot of personal information with your broker, reliability is quite important. A regulated broker is reliable, more trustworthy, and helps to ensure the security of your private information. Regulated forex brokers will always act in their client’s best interests. Apart from their service fees, they do not charge you any additional fees. Also, they won’t be manipulating you in any case.
- Customer Service– Whether you trade with a regulated or unregulated broker, high quality customer service is crucial. Any trader can fall into trouble at any time due to various factors like platform malfunctioning, payment issues, etc. Regulated brokers often have a great customer service team who are available at all times. They will always do their level best to help the clients with all the queries.
Overall, it solely depends on your preferences which broker you should pick. Both regulated and unregulated forex brokers offer trading services that allow you to participate in the forex market. Always consider your trading needs and risk tolerance before deciding on the best fit. Whether you’re a beginner or an experienced trader, always look for brokers with reasonable spreads, lower trading costs, the best customer service, quality educational tools, and simple deposit & withdrawal procedures. Also, make sure that the products and tools they offer are actually useful to you. Do not proceed until you are completely satisfied with the trading conditions and services provided by the broker.