When you should consider changing your forex broker
Selecting a broker is one of the most important decisions you will make when starting to trade currency or stocks. A broker will carry out your orders as you attempt to create a profit in the market – so it’s crucial that you select an intermediary that is trustworthy and reliable.
Fortunately, if you are unhappy with your current selection, you can move to a new broker. Here are four red flags that suggest that it may be time to make the switch.
Lacklustre platform
Day traders need a feature-rich platform to buy and sell currency pairs exactly when they need to. Using an unstable and unreliable platform will undermine even the best forex strategies, making it difficult to act when there are breakouts. Browsing a range of broker app reviews will help you to find a platform with advanced features that you can rely on.
You might want to switch brokers if you need a customisable user interface, the option to automate or schedule market orders or entry orders and access a range of technical analysis tools and charts.
No regulatory status
If you are working with an unregulated broker, then it may be time to start looking for a third party who is actually registered with a financial regulatory body in the country they operate in. If your broker resides in the UK, then they would need to comply with the FCA.
A regulated broker is more trustworthy and reliable, choosing one will protect you from fraudulent practices such as “free money” scams and excessive spread charges. Regulated brokers need to meet a stringent set of rules and regulations to operate, giving you peace of mind to conduct your forex trades without fear of reprisals.
High spread charges
You might also want to consider finding a new forex broker if you are unhappy with the spreads being charged on currency pairs. The offer of a three pip spread on EUR/USD, for example, might have been acceptable several years ago but it would not offer value in today’s climate.
All brokers charge for their services but making the switch to an intermediary with lower spreads will reduce the costs of making trades and give you a better chance of driving profits in the long term.
Bad customer service
Being able to contact your broker with ease when problems arise is important. Ideally, you want access to several different comms channels during the day so that you can sort out any issues quickly. Making the switch is justified if your broker does not offer the account or technical support you require or if the after-sales support is lacking.
Poor leverage
Trading on leverage is one of the best aspects of forex markets. It will enable you to expand your profits with a comparatively small outlay. Leverage supports low capital by increasing the ratio of credits to currency. If you are working with a broker that does not offer enough leverage, then it may be a good idea to consider other options available to you.