According to Investopedia, forex is the largest financial market in the world with an average trading value of more than 4 trillion US dollars every day. So it is not surprising that many parties want to take advantage of this business. Many people are interested in this forex market because of its high liquidity, 24-hour trading hours, and the amount of leverage received. So, what should you consider when choosing a forex broker? Here is the review.

What are the things to consider when choosing a forex broker?

Regulators such as Bappbeti together with BBJ and KBI within a certain period of time will usually release a list of fraudulent forex brokers that you should avoid. However, many investors or traders still become victims of fraud. Here are the keys to choosing a forex broker so that you do not become a victim of fraud that is still happening today.

1. Pay attention to the regulatory status of the forex broker

Make sure the forex broker has a license from the regulator. Trusted forex brokers need to comply with the rules and supervision of regulators according to those in their respective countries. That way, forex brokers will not do anything that is detrimental to traders or investors. If a forex broker commits a serious violation, the regulator will revoke the company's license and impact the company's reputation because it no longer has an operating license. If you choose an official Indonesian forex broker, make sure you have a license from an official regulator such as Bappebti, Indonesian Derivatives Clearing House, and Jakarta Futures Exchange. Meanwhile, if the broker comes from abroad, they will usually list the license with the words "licensed" or "regulated", then the name of the regulator that oversees it. To ensure the security of funds, make sure the foreign broker you choose is one of the best forex brokers in the world according to reviews from other traders. The following are forex regulatory institutions that are authorized to provide regulations for brokers in various countries:
  1. Commodity Futures Trading Regulatory Agency (Bappebti). Forex broker regulator in Indonesia
  2. Financial Conduct Authority (FCA). Forex broker regulator in the UK.
  3. CFTC (Commodity Futures Trading Commission) and NFA (National Futures Association). Forex broker regulators in the United States.
  4. Australian Securities and Investments Commission (ASIC). Forex broker regulator in Australia.
  5. Financial Service Agency (FSA). Forex broker regulator in Japan.
  6. MAS Monetary Authority of Singapore. Forex broker regulator in Singapore.
  7. SFC Securities and Futures Commission. Forex broker regulator in Hong Kong.
  8. Autorite des Marches Financiers (AMF). Forex broker regulator in France.
  9. Federal Financial Supervisory Authority (BaFIN). Forex broker regulator in Germany.
  10. Commissione Nazionale per le Societ e la Borsa (CONSOB). Forex broker regulator in Italy.
You can check the list of forex brokers registered with Bappebti 2020 and 2021 on the official Bappebti website. For those who prefer international forex brokers, you can check on the official regulator website above according to the country of origin.

2. Choose a forex broker that has educational services

Understanding the risks of forex investment is something you should pay attention to. Investment in the futures industry including forex is safe to do, as long as you understand the risks well as a trader or investor. Because the world of forex trading is a high risk high return investment, you must choose a forex broker that provides forex learning facilities through educational classes. These forex trading education classes can be in the form of webinars, e-books, trading videos, and others. During a pandemic like this, all classes are usually held online, so you can learn effectively and efficiently. If forex learning facilities are provided completely and up to date, you don't need to bother looking for forex learning materials. You can also join event or educational classes held by the GIC Forex Academy. Becoming a reliable forex trader is not an instant thing. It takes a willingness to learn persistently, focused, and consistently.

3. Pay attention to the facilities provided by the forex broker

The facilities provided by the broker will greatly affect your forex trading process later. Every forex trader has different primary needs, so don't forget to learn about this first before deciding to choose a forex broker. However, in general, good forex brokers provide:
  • Low spread, the lower the better
  • Leverage starting from 1:100
  • Easy to download online forex trading platform
  • Brokers provide free forex demo account 
  • Has various deposit and withdrawal methods
Try to note the list of forex broker facilities above and study it further to make sure.

4. Has a low minimum deposit requirement

Before you really understand the trading strategy, a low minimum deposit requirement is quite important. Why? If you experience a big loss in the early days of trading, this will discourage you. In fact, the mistake is not in the investment or trading but rather the strategy of the initial investment amount that is not right. With this facility, you can make a deposit with an amount that is not too large when trading using a real account, so you can minimize losses in the early days of forex trading. If you are a beginner, you need time to understand various knowledge about forex trading or investment until you become proficient and experienced.

5. Appropriate leverage

For those of you who don't know, leverage is a loan from a broker that aims to increase the potential return of an investment, in this case forex investment. High leverage is a bad indicator for a broker. This is because leverage that is too high can be dangerous and cause you to lose quickly. But actually if it is lower than 1: 100 this is also not good. Because this will be too restrictive for you when opening a trading position. But usually, a low minimum deposit amount also creates a high leverage level. Because indeed a high leverage level can provide wider opportunities for forex traders with small capital. Actually, the maximum limit of high leverage is not always beneficial for beginners. Because high leverage can be utilized optimally if the trader already understands the margin and risk of leverage.

6. Low minimum lot

The next tip for choosing a forex broker is a forex broker with a low minimum lot. The larger the minimum lot forex used, the higher the risk. To answer this need, many forex brokers provide trading solutions with mini, micro, and even nano lots. Moreover, the choice of a low minimum lot will be quite beneficial when you make a deposit that is not too large. So in order to maximize the use of the low minimum lot facility, you can also consider the minimum deposit amount. That way you can invest more freely while learning.

7. Communicative customer service

The next tip for choosing a forex broker is to have customer service that is easy to contact and responsive. Make sure they have various features ranging from chat, email, and telephone. This is quite important to ensure the smoothness of your forex transactions. Especially if you are a beginner who may need to ask questions when forex transactions are running. Easy-to-contact customer service makes it easier for you if you ever experience technical problems in forex trading. Try contacting the available customer service contacts and see how responsive and effective their customer service is in answering your questions. You need to know, the quality of each broker's response varies, but if they take a few days to respond to you. It is better to cross out the list of forex brokers in your considerations. Remember that forex brokers are important parties for a trader and investor. If they are not responsive to complaints, you should ask, am I important to them? Well, those are tips for choosing a forex broker that you can consider before making a decision. Make a checklist to make it easier. Choose the one that best suits the tips above.