How to Choose The Best Forex Broker in Zimbabwe
It is common knowledge that Forex trading is quite complicated as well as requires enough knowledge and experience. However, choosing the best Forex broker is actually the biggest trade of all.
Some people may ask why you should carefully choose a Forex broker for your trading journey. The answer is to increase your odds of success in the competitive market and to make sure you can focus on the important things when trading.
Before choosing your Forex broker, it is important to figure out what type of trader you are. Are you a day trader, scalper, or maybe news trader? In addition, you should also determine your investment goals, trading volume, strategies, and trading styles.
After you have the answers to the above questions, ask yourself these five important questions about your broker to find out whether a broker is truly suitable and the best for you or not.
⚖️ Is your Forex broker fully regulated?
This is the first and the most important aspect of choosing a Forex broker.
Regulation is important because it indicates the broker’s legality – if your broker is not regulated, then they may not be a legal and legit broker, and there is a chance of them scamming you. Learn about Forex Scams.
Regulators work in the best interest of traders so you don’t have to worry. Their main tasks are to prevent traders like us from fraudulent companies and ensure a fair market environment for all participants. Being regulated means that your funds are kept safely and securely in segregated accounts so the brokers will not be able to use your funds for their operational activities. But, remember that regulated brokers do not guarantee problem-free trading. However, it can at least prevent potential scam issues.
Regulated Forex brokers usually display their regulators’ names, company names, and license numbers at the bottom of their main page, on the footer section. Alternatively, you may find this information on other pages, such as About Us, Regulations, and so on. However, you should always double-check this information on the regulators’ official websites.
There are a lot of trusted and prominent financial regulators in the world. They have different jurisdictions and requirements, such as:
👉 Cyprus Securities Exchange Commission (CySEC) in Cyprus
👉 Financial Conduct Authority (FCA) in the United Kingdom
👉 Australian Securities and Investments Commission (ASIC) in Australia
👉 Dubai Financial Services Authority (DFSA) in Dubai
👉 Financial Market Supervisory Authority (FINMA) in Switzerland
👉 Financial Sector Conduct Authority (FSCA) in South Africa
👉 Monetary Authority of Singapore (MAS) in Singapore
👉 National Futures Association (NFA) in the United States
👉 The Federal Financial Supervisory Authority (BaFin) in Germany
👉 Financial Markets Authority (FMA) in New Zealand
Aside from regulators, Forex brokers may also be a member of a compensation scheme or another international organization, such as The Financial Commission, Investor Compensation Fund (ICF), and Financial Services Compensation Scheme (FSCS).
💬 How is the client support quality?
Client support is an aspect that is actually essential but is usually brushed aside by many traders since they have not needed them yet.
Imagine that one day you are having some problems with fund deposits – you still haven’t received the funds in your trading account. You need immediate assistance because you want to open a trade quickly before the market shifts again. But, it turns out that their live chat support is not available at that time and can only help you within 24 hours. You have no choice but to lose your chance to earn profits since the Forex market is very liquid and can change in a matter of milliseconds.
That is why you should find out more about your broker’s client support before choosing them. There are several questions that you can consider:
Do they offer 24/7 or 24/5 support in Zimbabwe time?
Are the customer support teams friendly, helpful, and professional? Do they tailor their answers based on your questions or do they just copy and paste canned answers?
What support channels do they offer? Do they provide various ways to reach out to them, such as call, live chat, web form, email, media social, or chatting apps?
What is the average wait or response times of the live chat until you can talk with a human?
You can try to contact them and ask some questions to evaluate their responses. If your broker offers excellent customer service, then you can eliminate one more thing from your mind and focus on your trading.
💠 Does your broker offer various trading accounts? What are the conditions?
Forex brokers usually offer several trading account types with different conditions. There are accounts suitable for beginner, experienced, and professional traders. Many brokers also offer a Demo account that can be used to test the Forex broker’s capability and facilities, or if you want to test your skills and strategies without spending real money. Therefore, you have to make sure that your chosen broker offers an account type that suits your trading level, needs, risk appetite, and styles.
Some of the trading conditions that you should pay attention to include:
Leverage is a trading mechanism that allows traders to increase their trading volume with less investment. For example, with leverage of 1:100, you can trade up to 1,000 USD just by using 10 USD. Professional accounts usually have higher maximum leverage, while beginner accounts offer lower maximum leverage. Since leverage is extremely risky, make sure that the offered leverage is according to your needs and use it with caution.
Spread is the difference between the sell and buy prices. The wider the spread, the more difficult to make profits. Thus, popular pairs usually have tighter spreads. There are two types of spread: fixed and variable. As the name suggests, fixed spreads are established for an entire day and will not change, while variable spreads may change depending on the dynamics of the pairs you trade in.
✅ Fees and commissions
There are two ways your broker can make money – through spread and fees. That is why you should check what fees your broker charge for your trading activities. For example, you may encounter trading fees, overnight fees (swap), and inactivity fees. Make sure that there are no hidden costs, and that you have taken these costs into account when choosing a Forex broker.
✅ Slippage and requotes
Slippage happens when there is a difference between the expected trade price and executed trade price. Meanwhile, requotes happen because Forex brokers may not be able or not willing to give you a trade based on the price you entered. Both of them usually occur during a period of higher volatility. These are ways for Forex brokers to avoid much losses. That is why it is important to choose a Forex broker that offers less or no slippage as well as requotes to make sure your order is executed at the price that you expected.
✅ Initial deposit
Different accounts usually offer different minimum deposit amounts based on the trading volume and experience level. Mini or micro accounts for Forex beginners have relatively low minimum deposit amounts since the clients tend to trade with a small initial investment. On the other hand, professional accounts have larger initial deposit amounts because they trade in a huge amount.
✅ Order execution
When choosing a Forex broker, make sure to find out information about how fast an order is executed – usually in milliseconds. You do not want to lose any profits because of slow order execution, right?
✅ Limitations on trading styles
This may look unimportant, but always consider your trading styles before choosing your Forex broker. Also, take into account your trading frequency and the length of your trades (long or short term). For example, if you are a day trader, you may want to prioritize fast order execution and narrow spreads. If you are a scalper, make sure that your broker accepts this strategy and offers an ECN platform. The same also applies to other trading styles, such as hedging, news trading, swing trading, and trend trading.
✅ Other important conditions
Aside from the above points, other conditions should also be considered, such as margin and currency pairs or instruments offered. You should know what currency pairs or financial instruments you want to trade in and the account you can use to access them.
Furthermore, you can also find out if the Forex broker provides some Forex education tools and resources. These are essential for novice traders to gain a proper understanding of trading terminology. That is why a broker that offers educational materials is usually a better choice.
📈 What are the offered trading platforms?
Trading platforms are required to do almost all trading activities, from accessing the market, opening and closing orders, to managing positions through financial intermediaries.
There are many trading platforms in the world, but three of the most popular and common ones are MetaTrader 4 (MT4) and MetaTrader 5 (MT5) from MetaQuotes, as well as cTrader. Some Forex brokers may also offer their own platform.
Different trading platforms provide different features, such as technical and fundamental analysis, order entry types, automated trading options (EA, cBots, social copy-trading), trading alerts, strategy builder, one-click trading, real-time quotes, and others. So make sure that your chosen Forex broker offers trading platforms that have the features you need in your trading.
In addition, you should also check what devices are offered by the trading platforms. For example, if you want to trade on the go, then you should choose a platform that can be accessed mobile on Android or iOS. Furthermore, you should make sure that the interface is easy to use, so you will not have any problems navigating it. The languages available in the trading platforms should also be considered.
To check out and evaluate the trading platforms, you can download the software first and try using them in a Demo account. You can compare them side by side with real-time quotes from large financial sites, or maybe test whether trades can be entered and exited easily. If everything looks good, you can move on to the next step.
🏛️ What are the available deposit and withdrawal methods?
Last but not least, choose a Forex broker that offers various deposit and withdrawal methods. Some common methods include debit and credit cards, e-wallets (such as PayPal, Payoneer, WebMoney, Neteller, Skrill, etc.), wire transfers, local bank transfers, and local Zimbabwe payment services. Having several payment options will help you when one of your preferred methods is not available for whatever reason.
Furthermore, you should also make sure that your chosen deposit and withdrawal methods are safe and secure. Take into account the minimum deposit amount and processing time to choose a method that is suitable for you. Do not forget to check the broker’s, and maybe the payment provider’s, service fees. A good broker usually does not impose service fees.
If you are still not sure about the payment method, you can try to deposit and withdraw a little amount of money first. After testing out the method, you can then decide whether to continue or stop using it for future trading.
Choosing the best Forex broker is indeed not easy and may take some time, but once you find a suitable broker, it will be helpful for your trading journey in a long term. Remember that a bad decision at first can be costly in the future. Good luck in choosing your Forex broker and happy trading!