Read The Broker Profile

 

Choosing a broker is like recruiting staff for your own company. But instead of looking at applicant's CV, you should read the broker's profile. This will let you know a lot of information about your broker such as its brokerage type, regulations, location, support, services, etc., Sometime, you can find those information completely on the broker's website, but usually you can not because it's showed insufficiently on their website. Therefore, at forexful.com, we tried to investigated those brokers in order to reveal full profile of them. You just simply go to our broker list and choose your preferred one to read its full profile.

 

read forex broker profile

 

Below are information that you should pay attention while reading a broker's profile:

 

Year of foundation:

It's obvious that every broker have to start as new broker, but who have been standing for several years or longer could have more experiences in running their business. The fraudulent or bad companies would end up closing their shop after a short time. However, it doesn't necessarily mean that all new born brokers are amateur.

 

Location of headquarter:

In the internet era, it's not necessary to visit physical office of a broker, but it might be safer with a broker who located in a country that has a strong regulations as well as a solid financial background. The number of branch offices also tell you the broker's business size.

 

Brokerage type:

As you known, brokerage type of a broker decide the way your order will be treated. Hence, it is one of the most important factor that you have to choose for your trading plan. In our broker list, the brokers are classified by 4 types: Dealing desk (DD), Regular STP (STP), DMA/STP (DMA) and ECN/STP (ECN). Please inform that a broker can follow more than one brokerage model due to the account types they provide.

 

Regulations:

Regulations of a broker indicate that it is monitored and controlled by a independent regulatory body (or some). This will protects you from any fraudulent or manipulated actions of the broker. You should consider with brokers who have no regulation or regulated by a weird regulatory body (check it at regulatory body list).

 

U.S client acceptance:

Due to the strict regulations of the U.S, only forex brokers who register with both the Commodity Futures Trading Commission (CFTC) and the National Futures Association (NFA) have the right to conduct business with U.S residents. These rules even don't allow brokers to give the leverage higher than 1:50 with major currency pairs and 1:20 with other pairs.This means a strict set of regulations and a higher cost of running business are applied on those brokers. Hence, many forex brokers choose to run their business in other countries and ignore the U.S retail market. If you are U.S resident, you should look for brokers that accept U.S client. Using filter in our broker list will help you to short them out.

 

Trading platform:

Trading platform is a software that transform your trading decision into transaction data to be sent to trading server. Some platforms are simple and user-friendly, while others are more complex and professional. There are some adapt with auto-trading, some do not. You should try them on demo account to check if they are good for you.

 

Trading time zone:

Trading time zone is the time zone that is presented on the price chart of trading platform. For example, GMT+2 means time frame on chart is same to clock time at places that have GMT+2 time zone.

 

If trading time zone is GMT+0, weekly market openning on chart will be at 21:00 (summer) or 22:00 (winter) on Sunday and it will close at 20:59 (summer) or 21:59 (winter) on Friday. There are 6 D1 candlestick each week, in which Sunday candlestick contains only 2-3 hours. So, technical analysis on D1 time frame with this trading time zone may be a bit misleading, since the Sunday candlestick doesn't fully reflect the market activities in full-day like other ones.
 
If trading time zone is GMT+2 or GMT+3, weekly market openning on chart will be always at 00:00 on Sunday and it will close at 23:59 on Friday. There are 5 standard D1 candlestick each week.

 

Deposit/Account currency:

Deposit currencies are the currencies that you can send as deposit to your broker. Account currencies are the currencies that broker accept to reflect into your account. You should choose the deposit currency and account currency in the same or different type. If they are different, your deposit currency will be converted to your account currency by your broker.

 

Deposit/Withdrawal method:

Thanks to the rapid development of online payment nowadays, most forex brokers provide client multiple choices of sending/receiving money methods. Simply choose which is most convenient for you.

 

Deposit/Withdrawal/Other fees:

Some brokers apply fee on deposit/withdrawal actions. Some even charge other fees such as account maintenance fee, data fee, etc., Check them up if they are suitable for you.

 

Support language:

The languages that you can use to contact the broker or at least it is presented on their website.

 

Swap free account:

With this option, clients can trade without swap interest rate while holding a position overnight. Several brokers give this option upon client's request, while some others apply it for Islamite only. If you follow a long-term strategy, this is a considerable factor.

 

Retirement account:

This type of account allows forex traders, who retire in the U.S., to avoid the tax on their trading income.

 

Margin interest:

Some brokers pay the interest on the free margin of your account monthly. In this case, broker acts an additional role as a bank. Normally, the interest rate is on annual basis and free margin is counted at the end of month. For example: if you have $1000 free margin at the end of month and your broker pay 4% margin interest, that means you will receive ($1000 x 4%)/12 month = $3.33 for that month.

 

Order by telephone:

Beside of processing orders through trading platform on computer, some brokers also accept clients to place order by phone calling. This is important in the case you have trouble with your trading platform.

 

News feed service:

The broker/platform provides service that deliver news to clients.

 

Email alert service:

The broker/platform provides service that alert clients when margin call occur or about account statement via email.

 

Mobile alert service:

The broker/platform provides service that alert clients when margin call ocuur or about account statement via mobile network.

 

Managed account service:

A service provided by the broker that client (who acts as investor) authorizes a professional trader of broker (who acts as personal account manager) via a Limited Power of Attorney to trade on behalf of the investor in order to make profits.

 

MAM software:

MAM stands for Multi Account Manager, which is a service/software that allow professional traders or asset managers to simultaneously tracking and trading of multiple accounts with only one platform.

 

PAMM system:

PAMM system (Percentage Allocation Management Module) allows clients (as investors) to join their capital into one account which is managed by another client (as manager). Profit/loss of joint trading account is distributed automatically to each investor's accounts base on ratio of his capital share. The manager, who is responsible for trading account, will be compensated by an agreed amount percentage of the monthly net profits.

 

LAMM system:

LAMM system (Lot Allocated Management Module) allows clients (as investors) to join their capital into one account which is managed by another client (as manager), but each investor can define the maximum lot size for his own capital. That means manager determine the other parameters of the position like entry, exit, stoploss and takeprofit points but each investor set his limited lot size (which means risk level). Profit/loss of joint trading account is distributed automatically to investors' accounts base on the ratio of his maximum lot size. The manager, who is responsible for trading account, will be compensated by an agreed amount percentage of the monthly net profits.

 

Segregated account:

Segregated account is the client's dedicated account which keep client's fund in a separated (segregated) bank from the broker's fund. The broker cannot use client's fund for any purpose. This will protect client's fund from any risk come from broker such as bankruptcy.

 

VPS hosting:

VPS hosting (Virtual Private Server hosting) is a dedicated remote server that keep client's trading platform running uninterrupted. This is the idea solution for traders who use robot in trading, since this automatic trading style requires the trading platform to keep running in order to let the algorithmic program operating correctly.

 

Bonus:

Many brokers give bonus program to promote clients making deposit. Most of bonus programs are interesting, however they usually attach some conditions to fully obtained.

 

Rebates:

Rebate is a policy given by brokers or introducers in which clients are paid back some money base on the transacted volume. This is a very attractive policy since it compensates a part of fee that you should have been charged normally (such as spread or commission). This rebate ammount can be significant after a period of trading.

 

Forexful.com, as an introducer partner of brokers in our brokers list, give you our own rebates if you open live account with some particular brokers through our website.