If you want to start making money in the financial market, the first thing you need to do is choose a reliable broker. After all, cooperation with an unverified company can lead to a loss of funds even with competent trading. And today we will tell you about the main criteria that you need to pay attention to.
If a forex broker intends to provide honest and long-term services to traders, it will definitely be accountable to the official controlling organization. The authorized bodies issue special licenses, without which legal activities are not carried out. If your broker is not licensed, it is better to look for another option.
In addition, the documents must be carefully checked. Because not all regulators are equally reliable. There are organizations that for a certain amount issue a license to structures with a low level of business responsibility.
For example, the licensing by FSC (Financial Services Commission, Mauritius) does not guarantee the integrity of the broker, since it is an offshore regulator.
The name of the regulatory body will change depending on the country of registration of the broker:
- Europe - ESMA. European Securities and Markets Authority. Officially engaged in the control of financial market participants within the jurisdiction of the European Union.
- USA – NFA. National Futures Association. There is another American organization – FINRA.
- Japan – FSA (Financial Services Agency).
- Australia – ASIC (Australian Securities Commission).
- Russia - CROUFR. Commission for the Regulation of Relationships between Financial Market Participants. The CRFIN also partially works in this area. And the function of the "megaregulator " is performed by the Central Bank of the Russian Federation.
- Belarus – NBRB (National Bank).
- UK – FCA (Financial Conduct Authority).
- Italy - CONSOB.
- Switzerland - FINMA.
- Germany - BaFin.
- Malta - MFSA.
When choosing a broker, we advise you to look at its country of registration and find the name of the body that issued the license. If it is a recognized regulatory organization in the region, then you can increase the level of trust.
When the broker is honest, it publishes copies of the licenses on its official website. You should be able to easily find these documents and read them. If there is no information about licenses, or it is impossible to count it, it is better to pass by such a company.
After finding the license, you need to go to the website of the regulatory authority and check the data specified in the copy. It will not be superfluous to check with the support service of the regulator the validity period of the license. Since some scammers simply make a fake document in Photoshop, and pass it off as the original.
The broker's rating is an important indicator. If traders can not withdraw their money, face artificial disruption of transactions, various system failures and other troubles, then they will tell about it on thematic sites. Reviews do not always reflect the real picture, but if there is a reasonable negative, you need to pay attention to it.
Work experience is also important-it indicates the stability of the broker and its ability to provide services professionally. Some organizations that are not entirely honest may indicate false numbers on the site. You can use special services to check the validity of an individual site:
- Whois and others.
Everything that is online for less than 5 years, you can immediately ignore, or check very carefully. It is better to give preference to brokers who have been on the market for 10 years or longer.
You also need to pay attention to the presence of awards received from the jury of prestigious ratings and exhibitions.
Another way to check the broker's reputation is to visit one of the popular forums. For example, SMART-LAB. There's a "brokers" tab in the main menu. If you click on it, the rating chart will load. For each broker in the list, there is detailed information with comments from users. If your broker is a fraudster, you will not be able to find it in such ratings.
Liquidity is the ability to quickly buy or sell a financial asset at a market price. Reliable brokers bring traders' transactions to the market, and do not leave them in their so-called "kitchen".
To ensure the quick purchase and sale of an asset according to the requests of traders, liquidity providers are used. These are organizations with a large turnover of large transactions. In most cases, these are banks or companies that cooperate with them. They provide up-to-date information about market quotes.
A reliable broker will indicate which liquidity providers it cooperates with. This makes it possible to check how reliable the quotes will be during trading. Again, do not take their word for it – you can contact the representatives of the liquidity provider and check this information with them.
In trading, sometimes there can be various unpleasant moments associated with failures in the software (stop loss did not work) or, for example, errors when withdrawing funds. A reliable broker pays special attention to such problems and does everything to minimize their number. And if something like this still happens, the company will try to solve it with minimal losses for the client.
To ensure a quick response to traders ' complaints, reputable organizations always have a well-trained support service:
- employees get in touch in a short time;
- they respond by providing all the necessary information;
- they do not disappear until the issue is completely resolved.
Reliable brokers even have awards for the decent work of the support service.
There are also many unpleasant situations associated with the withdrawal of funds in trading. But a reliable broker should have everything perfect with this.
In order not to be among the customers who are waiting for their money for a long time, you should carefully study not only the reviews, but also the withdrawal conditions. Small print may be spelled out not quite profitable items.
It is necessary to pay attention both to the terms and to the methods of withdrawal. It should be possible to transfer funds to cards, bank accounts and wallets of popular payment systems.
The broker may use offshore accounts, little-known payment systems, cryptocurrency, and other suspicious methods of transferring money. This does not always indicate fraud, but it is worth paying special attention to.
In addition to the reliability features described above, there are other data that you should pay attention to.
A quality broker will do the following:
- increase the number of top liquidity providers:
- invest in a security system to protect customer deposits;
- minimize the possibility of price slippage on the chart;
- observe the parity of large and small deposits;
- form a real risk insurance fund.
When choosing a broker, you need to pay attention to the client agreement provided, as well as to the availability of public regulations and other appendices to the agreement. These documents should contain all the conditions for cooperation, including what we have described above.