How to Choose a Forex Broker: A Step-By-Step Guide - Benzinga

Posted: 23 Apr 2019 12:02 PM PDT

Featured Forex Broker: FOREX.com

FOREX.com is the largest forex broker for US traders. You will get competitive pricing, award-winning customer service, actionable data and powerful trading platforms to help you make the best possible trades.

Whether you plan to trade forex or trade stocks on the stock market, remember that selecting a broker to partner with can impact your bottom line as a trader, so make sure your choice is as ideal for your needs as possible.

Note that traders based in the United States have a reduced selection compared to traders in other countries.

Step 1: Consider Your Trading Style

Your preferred trading style or strategy can help you determine the best broker for you. What generally distinguishes your various trading styles is the amount of time you hold a position, trading frequency and how trade entries and exits are timed. Trading styles also tend to fall into two broad categories: intraday or position trading.

If you are a long-term position trader who trades relatively infrequently, you might select a broker with a broad range of assets and great information and educational offerings. You might not need to choose one with the tightest dealing spreads since you won't be trading that often.

On the other hand, very active short-term traders are far more sensitive to dealing spread widths. Also, if you plan to frequently use stop-loss orders, then order slippage can make a significant difference to your bottom line as an active trader. Choose a broker with guaranteed order fills to help prevent that issue.

Another trading style factor could involve choosing a broker with negative balance protection. If you intend to place your account at risk, avoid a situation where a negative balance could put you into debt if a trading position goes sharply against you.

The most common trading styles are listed below.

Scalping

This very short term, active trading style involves rapidly entering and exiting the market to capture small profits. Scalpers need brokers that provide the tightest possible dealing spreads.

Day Trading

This intraday style involves closing out all positions by the end of your trading day. While this style can encompass a wide variety of strategies and trade plans, you avoid the extra risk of holding positions overnight.

Most active day traders benefit from a broker with tight dealing spreads.

Swing Trading

The aim of this momentum-based trading style is to buy low and sell high whether you need to hold a position overnight or close it out intraday.

Swing traders often use technical indicators like the relative strength index (RSI) to signal when exchange rates are oversold or overbought and may swing in the opposite direction.

They may also use support levels to buy ahead of and resistance levels to sell ahead of. Since they tend to trade less often, swing traders do not require the narrowest possible dealing spreads from their broker but must be able to hold overnight positions.

News Trading

This set of fundamentals-based trading strategy typically involves taking advantage of the volatility that news releases can create in the forex market. Most news trading positions are taken intraday immediately before and after news release events.

Since order slippage can be an issue at such times, a broker that guarantees order levels can be beneficial for news traders. You'll benefit from a broker that provides you with a top quality financial news feed so you get news as fast as possible.

Trend Trading

You can take advantage of extended directional movements in currency markets and can yield impressive returns with trend trading.

Trend traders like to use trailing stops to protect their accumulated profits. Dealing spreads are rarely an issue for this type of trader since they only go in an out of a market occasionally.

Carry Trading

This long-term trading style involves capturing the interest rate differences between two currencies by going long a high-yield currency and short a lower-yielding currency.

They also like to receive some exchange rate gains as well. This trading style is not very sensitive to bid-offer spreads but does require attractive rollover or swap pricing.

Step 2: Make a List of Features You Need

A quick overview of the services provided by any subset of the companies that offer online brokerage services will convince you that not all forex brokers are equivalent.

Accordingly, make sure any broker you decide to partner with provides a safe place for your margin deposit and offers the specific services you require for your preferred trading style.

Broker Type, Commissions and Spreads

Market maker brokers tend to have wider spreads and no commissions, while brokers who offer electronic communications network (ECN) access tend to have very tight spreads and charge a commission.

Regulatory Oversight

To help assure your deposit's safety and that you are treated fairly by a broker, they should be overseen by a major regulatory organization. U.S.-based forex brokers should be regulated by the National Futures Association (NFA) and the Commodity Futures Trading Commission (CFTC).

Website and Customer Service

Make sure the broker's site is available in your preferred language and that its customer service department offers the sort of support you need.

Most brokers provide access to support staff using phone, live chat and email.

Market Analysis and Learning Materials

If you're a newer trader, getting good quality educational material from your broker can be very worthwhile.

Many traders of any skill level will also appreciate high-quality market analysis to give them fresh ideas.

Online Trading Platform

Interactive Brokers online trading platfor — *The FX Trader online trading platform. Source: Interactive Brokers*

Be sure to look over a broker's software to see if you can easily use it and that it fulfills all your requirements. You might look for the popular MetaTrader 4 or 5 platforms from MetaQuotes.

An example of a proprietary forex trading platform is FXTrader provided by Interactive Brokers.

Step 3: Think About Your Budget

An important practical aspect of trading forex and choosing a broker involves taking your budget into account.

For example, check to see if the dealing spreads, fees and commissions (if any) charged by a broker are suitable for your preferred trading style. More active traders will want to choose brokers with lower transaction costs that can add up over time and adversely affect your bottom line.

Furthermore, make sure you have sufficient funds to meet the minimum margin deposit requirement of the broker you would most like to deal with or plan to choose another broker. Ask each broker about their minimum deposit so you can either budget for that amount or choose another broker.

Some brokers will allow you to open starter accounts with minimal money deposited up front, sometimes with as little as $25. Some brokers might require up to $10,000 to be deposited so you can use it as margin to secure the trades you decide to make.

Step 4: Choose Your Broker

Once you select the best forex broker for your particular needs, visit that broker's official website and fill in an online form to get started. All brokers can perform identity and location verification for you before opening an account and accepting your initial margin deposit.

Completing that step can take a few days before you can start live trading. In the meantime, open up a demo account and then download and start practicing using the broker's trading platform if you do not already know how to operate it. You will also want to get the broker's mobile app installed on your smartphone or tablet.

The table below contains a list of three reputable online brokers that accept clients based in the United States for trading forex, as long as you meet their minimum deposit requirements.

Here are a few of our favorite forex brokers.

Final Thoughts

Choosing an online forex broker for trading currency pairs is relatively easy these days given the many choices now available, although U.S.-based traders have a smaller selection due to local regulatory protections. Once you've decided on a reputable broker, contact the broker directly to open an account.

The Best Forex Brokers in Malaysia for 2019 • Benzinga - Benzinga

Posted: 09 Apr 2019 12:00 AM PDT

Recommended Broker: FOREX.com

With FOREX.com, you will get competitive pricing, award-winning customer service, actionable data, and powerful trading platforms to help you make the best possible trades.

Now that forex trading is officially permitted in Malaysia, traders should find the country relatively easy to operate in as a result of its unusually liberal trade policies and laws, although the concept of online retail forex trading remains relatively new in the country.

Remember to carefully consider your needs and the safety of your funds as you consider the best forex broker that offers services in Malaysia. Not all brokerages are created equal.

Quick Look: Best Forex Brokers in Malaysia

Trading Forex in Malaysia: What You Need to Know

Malaysia offers a local market with notable business potential for forex brokers, so several have established offices in Malaysia. Still, relatively few of them offer customer support or websites translated into Malay, so you may need to understand English to have a broader selection of brokers to deal through.

Local traders will be familiar with the Malaysian ringgit (MYR) that serves as Malaysia's national currency. According to the Bank for International Settlements (BIS), the ringgit accounts for roughly 0.4% of daily turnover in the forex market and was ranked 25^th among 2016's most actively traded currencies.

The country also offers decent financial regulatory oversight by Securities Commission Malaysia (SCM) that was established under the Securities Commission Act 1993. The SCM regulates futures and exchange-traded products, although forex products are not formally regulated yet.

The SCM does, regulate how brokers operate in Malaysia, and the National Bank of Malaysia (Bank Negara) manages the Malaysian ringgit's value. Bank Negara has committed itself to promoting a stable, sound and progressive financial sector.

Furthermore, traders of the Islamic faith may find Malaysia a particularly good place to open Islamic swap free trading accounts that comply with Sharia law since Islam is Malaysia's official religion. Malaysia's strong financial services sector specializes in providing Islamic investment products and Islamic accounts. Also, the Islamic Financial Services Act (2013) requires such services to comply with Sharia law.

Things to Consider Before You Open a Forex Account

Since not all online brokers are equal, the most important things to be confident about before opening a forex account is that the broker is secure and offers the services you require. The bullet points below describe the more common considerations you'll want to review before you select a broker as a trading partner.

Regulation

The primary consideration when choosing a broker should be the security of your funds deposited as margin. Select a well-regulated broker with at least one reputable regulatory body overseeing its operations and that segregates client accounts from its own.

Most foreign brokers accepting clients from Malaysia will be overseen by one or more good regulatory agencies, such as the National Futures Association (NFA) and the Commodity Futures Trading Commission (CFTC) in the United States or the U.K.'s Financial Conduct Authority (FCA).

Broker Type

Online brokers will typically act either as market makers or as electronic communications network (ECN) brokers. Market makers take the other side of your trades, while ECN brokers pass on the best price of a selection of market makers who use its electronic communications network.

ECN brokers typically show narrower variable spreads but may charge a per trade commission, while market makers often have wider fixed spreads but no commission.

Dealing Spreads and Commissions

The difference between the bid price and the offer price in a broker's quotation is known as the dealing or bid/offer spread. Since spreads and commissions add a cost to trading, active traders will want to keep them down as low as possible, while less active traders typically seem less sensitive to such considerations.

Trading Platform

Ideally, you want to find a broker that offers trading software with a customizable interface and that has the analysis features you require, as well as runs on the desktop, mobile or web platform you prefer.

Virtually all of the best online forex brokers will support using the popular MetaTrader 4 and 5 trading platforms developed by MetaQuotes that offers a complete technical analysis functionality with numerous valuable trading tools, including a wide range of third-party expert advisors (EAs) and custom indicator software that you can use or purchase. Some brokers also offer access via cTrader, NinjaTrader, their own proprietary platforms and social copy trading platforms like ZuluTrade.

Customer Service

Most traders, especially those with less experience, know the importance of being able to communicate promptly with their broker's customer support staff in case errors or issues arise. Traders new to the broker can also appreciate material on how to use their trading platforms.

Research, Analysis and Educational Materials

These written and visual aids can be a major plus for traders with less experience. Even more advanced traders may appreciate having access to a high-quality news feed and market analysis performed by professionals.

The Best Forex Brokers in Malaysia

If you want to deal through the best online brokerage available to Malaysian forex traders, choose from among the well-regulated brokers described below. Some of them even have offices in Malaysia and a website translated into Malay.

In general, reputable international brokers who have established a Malaysian presence would probably be ideal. This is because local representation often encourages brokers to behave more responsibly due to the greater risk of regulatory and/or other legal action being taken against them in Malaysia if clients complain.

Best Overall: FOREX.com

Commissions

Spreads start as low as 1 But vary based on trading volume

Best For

Forex traders located in the United States
MetaTrader 4 users
Beginner forex traders
Active forex traders

FOREX.com ranks as the top U.S. forex broker when it comes to client assets.

It is well-regulated in the United States by the NFA and CFTC, and it is also regulated in seven further jurisdictions that include Canada, Australia, the U.K., Singapore, Japan, Hong Kong and the Cayman Islands.

Although you're not able to communicate with them or view their website in Malay, Malaysian clients are welcome to open an account at FOREX.com.

Doing so requires just a $250 minimum deposit, and micro lot trading is supported.

The broker keeps client accounts segregated from its own funds, and it provides the Islamic account option most Malaysian traders prefer.

When it comes to trading platforms, the broker offers desktop, mobile and web-based offerings.

They also offer MetaQuotes' popular MetaTrader4 and 5 platforms and NinjaTrader, as well as its own Advanced Trading Platform and Web Trading platform.

FOREX.com only allows clients to trade forex using a rather low maximum leverage ratio of 50:1, and you can find out additional information at FOREX.com.

Read Benzinga's full FOREX.com Review

FXCM (Forex Capital Markets)

FXCM

Trade Forex 24 hours a day and 5 days a week with commission-free micro CFDs. Start your account now, with $50.

FXCM has branches in the U.K., South Africa and Australia, as well as an office in Malaysia.

They are regulated by the U.K.'s FCA, South Africa's FSCA and Australia's ASIC, so the broker segregates client accounts from its own funds.

You can start trading with a minimum deposit of only $50 with FXCM Australia or $250 with FXCM U.K., and micro lot trading is supported.

FXCM permits trading via MetaTrader 4, NinjaTrader and Trading Station, and you can even use ZuluTrade's web-based copy trading platform.

The broker offers desktop, mobile and web-based platforms.

Note that FXCM Australia offers up to 400:1 leverage on forex trades, while FXCM U.K. has a much lower maximum leverage ratio of 30:1.

FXTM

FXTM gives traders access to MetaTrader 4 and 5 on desktop, mobile and web.

FXTM has an office in Malaysia and allows Malaysia-based clients to open accounts. The broker also submit to regulation under Cyprus' CySEC, as well as the FCA in the U.K. This award-winning broker has excellent customer service and it offers a decent range of educational resources for less-experienced traders.

FXTM provides execution via MetaQuotes' popular MetaTrader 4 and 5 platforms that support desktop, mobile and web-based trading. The broker also allows clients to trade over 240 different assets, including forex pairs, cryptocurrencies and CFDs.

Traders can open an account with only $5, and you can get leverage when forex trading of up to 1,000:1. This popular broker could suit traders of any level. Check out FXTM.com for more information.

IG

Get access to over 15,000 global markets and support from teams in Geneva and Zurich.

IG offers an online trading service that accepts clients from Malaysia. Outside the U.K., it acts primarily as a market maker in contracts for difference (CFDs) on forex pairs, indices, individual stocks and commodities. It also offers binary options.

Headquartered in the U.K., IG is well-regulated by the U.K.'s FCA, as well as a long list of other regulators including BaFin in Germany, FINMA in Switzerland, ASIC in Australia, the FMA in New Zealand, the DFSA in the UAE, the JFSA in Japan and the MAS in Singapore.

While micro-lot trading is not permitted at IG, you can choose limited risk account type to avoid having more at risk than your account balance when trading. IG does not have a minimum deposit per se, but you will need to fund your account with enough money to serve as margin for your initial transaction.

IG supports the MetaTrader4 trading platform, and it also offers its own IG platform and the web-based ProRealTime platform. The broker also has a direct market access (DMA) platform known as L2 Dealer. Desktop, web and mobile platforms are available.

The maximum leverage ratio for currency pairs of 200:1 that IG offers falls into the moderate category.

Next Steps

Finding a reputable broker that takes forex trading clients from Malaysia isn't difficult, so just choose one of the above brokers and set up an account. You can generally try out services and platform using a demo account first. To open a live account, you will then need to provide personal identifying information and make a margin deposit of a suitable size to satisfy the broker's requirements to do so.