Forex Comparison Site Benefits For Forex Traders
I was chatting to a friend not too long ago about day-trading shares. He and I often have robust conversations about certain stocks we believe or see potential in. Our share portfolios are not that large, this is no secret. Like many investors, we’re trying to improve this in part by investing in a few small cap stocks we hope could help us earn many multiples of our initial investment over the long term (fingers crossed).
On this particular occasion however, we were talking about the day trading of stocks. My friend is not a big believer in day trading shares. When he feels like he wants to increase his risk profile a bit and try to make a quick buck he’ll trade forex.
Having a keen interest in foreign exchange, I started quizzing him about the forex trading platform he uses, why he uses it and the reasons for choosing this particular forex broker in the first place. He couldn’t offer me a convincing answer for any of these questions. He said he was bored in a lecture at university the one day; saw an advertisement for CMC Markets and within about 15 minutes of doing some very preliminary research, opened a trading account. I asked him what features in particular he was looking for in his “lengthy” research to which he replied, “the company with the biggest new account bonus.” A number of years have passed now since he opened his CMC Markets Forex trading account but still he remains loyal to the brand. This is despite his trading circumstances changing significantly; he’s more experienced now and trades with a lot more money. He says he would change brokers but there are so many Forex companies out there and he doesn’t know where to begin to compare them?
And this is one of the major reasons why we started Compare Forex Brokers! We have segmented the Forex market into a number of niches and compare Forex companies’ services within each niche. If you’ve ever tried to research a Forex broker by visiting their website first, it is more than likely you’ve switched off and decided to spend your time doing something more productive. It’s not your fault. Companies operating in the Forex industry don’t invest a lot of time or effort in clearly communicating the features of their business to potential clients. A lot of the time this responsibility is left to experts in traders’ forums or Forex comparison websites laced with affiliate banner ads that only distract users and over-complicate this research process.
Improving The Research Process
Here at Compare Forex Brokers we are all about the user and trying to perfect their research process. We understand the value and impact a comprehensive comparison website can have on this experience and try to ensure that just the right amount of information is available to clients. We get currency trading but where we differ is that we also have the added benefit of knowing exactly what searchers are looking for in a comparison website. We have a successful track record managing comparison websites in other industries such as Health Insurance and Telecommunications.
What we’ve learned is that industries and businesses are constantly evolving. As technology improves trading platforms become more efficient, new payment methods are made available and new commodities such as Bitcoin can be traded, in addition to currency.
Our commitment to our clients is to constantly keep up to date with these trends and reflect these changes in our comparison tables as swiftly as possible. This is to ensure traders are ALWAYS making the most accurate decision when it comes to selecting a Forex broker.
As mentioned, when comparing forex brokers we try to make things simple for you by breaking down our comparison into niches or categories. These niches are what we consider to be the most important considerations when choosing an online broker for forex traders. These sections consist of some or all of the following sections:
- Spreads – Spreads is likely to be one of your primary considerations when selecting a broker. As a rule, you will want to choose a broker that offers the narrowest spreads for your desired currency pair. Choosing a broker with low pips or narrow spreads means you will be paying less each time you buy and sell foreign currency.
- Accounts: As part of this section we not only examine the spreads but the difference account types the broker offers and the key features of the account and the trading costs. For example, many brokers offer a ‘basic’ trading account and a ‘pro’ trading account. You will find a ‘basic’ account has no costs for each trade however the spreads will typically be wider when compared to the ‘pro’ account. An industry standard will be 1.0 pip wider but this will depend on the broker and in some cases the currency pair. ‘Pro’ style accounts will have narrower spreads but will have trade commissions when you execute a trade. Other features might include the Lots and the currency pairs available.
- Technology: Brokers can use different mediums to execute trades. This will impact the spreads on offer. Where possible we try to identify the technology, Types of technology include Market Maker, Straight-Through-Processing (STP), Electronic Communication Network (ECN) and Direct Market Access (DMA).
- Execution Speed – Fast execution speed is very important when dealing with variable spreads otherwise there is a risk slippage may occur. Execution speed matters especially when there is absence of risk management tools. We look at the speed offered by the broker and the technology behind it and explain when it should matter to you.
- Trading Platforms – Some brokers use propriety software for trading while other brokers don’t. There are pro and cons of each. We look at the platforms available by brokers for fx trading and explain the features of the platform and why you might wish to choose a broker with the platform. Typical platforms available include MetaTrader 4, MetaTrader 5, cTrader.
- Risk Management Tools – Some brokers offers extensive range of risk management tools while other brokers only offer basic tools. We look at the risk management tools and explain when you might benefit from these features. Risk averse traders might have a bias towards brokers that have guaranteed stops and guaranteed negative balance protection despite the higher costs of spreads. We also explain the role of industry regulation and help you understand the risks involved with forex trading.
- Customer Service and Customer Support – Not all brokers offer phone support, some only offer live chat or email support. In addition to this not all brokers offer support 7 days of the week. We look at the customer support offered. In addition to this we look at other elements of customer service on offer such as education tools. A good broker will offer forex trader free resources when it comes to CFD trading. These tools are very helpful for developing your trading strategies and improving you technical analysis skills.
- Joining Bonus – Some brokers offer a bonus for joining them. This feature might be useful when deciding on a broker.
- Other CFDs – Online brokers may offer a wide range of contracts for difference when trading. This might include Indices, Cryptocurrency, Shares, Treasuries. Some traders might have a need for a broker than allows for trading with multiple CFDs.
In today’s world people are in a rush to make decisions. We will help you make that quick decision when it comes to selecting the right broker for your needs. However, you can rest assured that when your Forex decision is made through Compare Forex Brokers it is accurate and considered. If only we were around when my mate opened his first trading account?