I am a good believer in being upfront, It serves no purpose to read over two thousand words just to find the best forex broker for beginners.
Without wasting much time, I introduce to you the best forex broker for beginners to trade with;
Having said that, read further to find our reason for choosing this broker as the best forex broker for beginners to trade with.
The truth is, your choice of broker can make or unmake you. It could make the difference between becoming homeless or becoming a billionaire by virtue of trader the market. That is why we have combed the web and used our experience as forex traders to select the best forex broker for beginners in 2020 for you.
Choosing the best forex broker for beginners would help you avoid certain pitfalls that you otherwise wouldn’t have known, while it silently destroys your funds and your dreams as a forex trader.
The journey of a forex trader is a difficult one, you not only need to get the right strategy, the right psychology, and the right money management if you fail to choose a good forex broker, all that could go to waste as the broker implements all sort of schemes to wipe your account.
If you are new to the forex market, I encourage you to learn how to trade forex with a slight edge to stay ahead and to become profitable.
Before you gain all the experiences and wisdom to profitably trade this market, you must have fallen prey to several unscrupulous forex brokers out there. Although, as the adage goes “Experience is the Best Teacher“, an intelligent man learns from experience, but a wise ma learns from the experience of others.
For this reason, we would share our opinion on the best forex broker for beginners and direct you to one of the best brokers in the industry of which you could benefit immensely by virtue of your association with them.
The Best Forex Brokers for Beginners in 2020 is a carefully written article to help you choose the best broker in your business as a forex trader. Our goal with this article is to at the very least reach as many forex traders as possible and to reduce the chances of them falling prey to these cunning and fraudulent websites masquerading as legitimate brokers.
Below is the Table of Content to guide you skip to the various aspects of the article that sparks your interest and suits your needs.
Table Of Contents
- Who is a Forex Trader
- What to look for in the best forex broker for beginners in 2020
- The best Brokers have: Brokerage License
- Why must the best forex broker be regulated?
- How to Determine if a Broker’s Claim of Regulation is Accurate in order to choose the best broker
- How to Determine if a brokerage license is true.
- Country of Location
- Low Spreads and Commissions
- Fast Deposit and Withdrawal Options
- Platform Consistency
- Other Traders Experiences when identifying the best forex brokers for beginners in 2020.
- Why do we choose JustForex as the best forex broker for beginners in 2020
Forex brokers are financial institutions that provide the platform for forex traders to buy or sell currencies. In essence, a forex brokerage platform is basically a market place to aggregate and execute the buying and selling of currencies (CFDs). The job of the forex broker is to manage this platform and connect the seller of a currency say (EURO) to a buyer of the same currency.
The reliable forex broker takes its prices from international banks to determine the price of a currency, the best forex brokers route all client transactions to the international banks. The broker puts commissions and spreads on the prices they receive from the international banks which serve as revenue for the broker.
The Forex broker, therefore, is an intermediary before the forex trader and the international forex market. They provide the connection and platform, without which, the average trader might not exist today to even think of taking advantage of the opportunities provided by the humongous forex trading market.
While most forex brokers use the same software (Meta trader, C trader, etc) the experiences they provide, such as leverages, spreads, commissions, platform stability during volatile market conditions, deposit, and withdrawal experiences as well as client support differ.
If you are a forex trader, it can be confusing knowing what broker to trade with, which forex broker to avoid, which has the best trading platform and experiences that can support your forex trading business. This guide is written to help you overcome the difficulty of choosing a good broker to start your career.
The Best Forex Brokers’ provides low spread, lower commissions, stable trading platforms, and prompt withdrawals while not trading against their clients. On the other side of the divide, are the worst brokers who offer wider spreads, freezing of their platform to stop you from taking trades in the most opportune times, and worse off, some just shut down their platform entirely, running away with clients deposits, but before we dive into this topic, let’s ask ourselves, who a forex trader is? without answering this, it might be dangerous diving into what a forex broker is and to help you choose the best forex broker for beginners in 2020.
Who is a Forex Trader
The definition of who a Forex trader is has changed over the years. In earlier days, Forex was limited to big banks, big institutional traders who trade with millions of dollars. Thanks to the internet, every individual with a computer and an internet connection, anywhere in the world can register with a broker and have access to the international forex market.
But who is a forex trader? A forex trader is an individual whose main activity is to buy and sell virtual currencies with the sole goal of making profits from the fluctuations of currency prices in the market.
Despite this definition, a Forex trader does not physically buy these currencies, they purchase what is called a CFD which is basically an electronic contract representing the value of the given currency in question.
What to look for in the best forex broker for beginners in 2020
Most brokers operate in multiple jurisdictions, this is primarily because the business is internet-based, it makes it easy for a broker to get clients from all over the world.
While some brokers limit themselves to certain jurisdictions, you soon find out this restriction is primarily due to license restrictions imposed on them by their regulatory bodies.
Despite the above, if you are looking for the best forex broker for beginners lookout for the following details.
- Brokerage License
- Low spreads and commissions
- The country in which they are located
- Fast deposit and withdrawal options
- A stable platform even in volatile periods
- Other traders experiences
The best Brokers have: Brokerage License
Forex trading is a high-risk business with lots of money involved, hence, all reputable forex brokers are licensed by multiple jurisdictions. Some of the most important forex regulatory authorities in the world including but not limited to;
- Australian Securities and Investments Commissions
- Commodities and Futures Trading Commission (United States)
- Financial Conduct Authority (UK)
- Cyprus Securities and Exchange Commission
- Swiss Market Supervisory Authority
We selected our winner for who the best forex broker for beginners from one of these regulatory environments because they are the best, but that is not all we considered, read on.
Why must the best forex broker be regulated?
The importance of regulation in Forex is to sanitize the markets and reduce the risk of losses caused by unscrupulous individuals running fake brokerage services and running away with client deposits. The volume of transactions that go through the forex market on a daily basis dwarfs the stocks, bonds, and equity markets together. This makes it especially attractive to bad operatives whose whole idea is to steal from you.
A good forex broker is regulated by at least one regulatory authority, which ensures the following;
- License and Supervision
- Ensure segregation of Client funds
- Ensure compliance with regulations and reporting standards
- Ensures the broker does not manipulate the market against its traders
- Enforcement of the law where necessary.
Given the nature of Forex Trading, Our advice to you is to flee from unregulated brokers. Even if it is an entirely new broker, do not trade with them until they are regulated and consider using only a regulated broker.
The broker we chose as the best forex broker for beginners met this requirement as well.
How to Determine if a Broker’s Claim of Regulation is Accurate in order to choose the best broker
These days almost all brokers claim to be regulated by one authority or the other. It is therefore important to determine if this regulation is:
- The legitimacy and history of the said broker
How to Determine if a brokerage license is true.
- Visit the broker’s website and navigate to the page that states where or who licenses their operation. In this example, we would use our preferred broker. At the bottom of the homepage, in the fine prints beneath, you would read that JustForex is regulated by the Financial Services Authority of St Vincent & the Grenadines. This may differ from broker to broker. However, the best option is to determine if the regulator is indeed true and then search to see if the broker you are trying to deal with is indeed licensed by them.
- When you visit the regulator’s website, you can either reach out to them via email or go through their website and read the list of licensed companies to determine if indeed your broker is licensed. Sometimes, the main companies who run the brokerage firm may be registered in a name different from their brand as a broker. For example, JustForex is a brand for the company JF Global Limited, and where do you see this? again, use the fine prints beneath the homepage.
The best Forex broker for beginners was verified with this procedure as well.
Country of Location
The laws and regulations governing forex trading vary from country to country and the same with the implementation of their laws. So while a company may be licensed, that simply does not mean you should ignore every other thing. Brokers located or regulated by the United Kingdom, the United States, and Australia often provide some of the best client protections in the world. Also, there are new and emerging regulators who are proving equally effective in regulating forex brokers and are widely gaining popularity among brokers across the world. Among these are Cyprus and St Vincent & the Grenadines.
These recently popular regulators provide some of the best protections in the industry due to the limited number of brokers they have to regulate, thus giving them accurate oversight responsibility.
Low Spreads and Commissions
New brokers come up each day with different trading conditions but remember high spreads and commissions make your cost of trading high. If the spread and (or) commissions are too high, you are paying more for the same position compared to someone using a broker with tight spreads and commissions.
With time, these spreads and commissions add up, reducing your overall profits, and putting you in a bad position. That aside, the best brokers out there compete to provide some of the tightest spreads and commissions. Hence, if your broker isn’t providing tight spreads and low commissions, you most likely are not dealing with the best.
Spread differs from each currency pair, the volatility, liquidity in the market at the time of the trade, etc. Generally, the most traded currencies have spread as low as 3 pipettes to even 0 pips under normal market conditions. While the least traded pairs may have spread up to 8 pips, anything above that is simply outrageous and such a broker should be disregarded.
This is a deal-breaker for us, any broker that does not over lower spreads and commissions does not fit into this category. The best forex broker for beginners equally passed this test.
Fast Deposit and Withdrawal Options
When we started trading forex over a decade ago it took three (3) to seven (7) working days for funds we have withdrawn to reach our accounts. Today, that is unacceptable!
If the broker can take your deposit from your bank account on the same day you upload, we expect the broker to at least have some means by which you can receive your withdrawals within 24 hours. Luckily, the best forex broker for beginners is doing this. Fast deposits and withdrawals are some of the key features a broker must possess.
There have been scary stories of brokers blocking withdrawals for one silly reason to another. Thus a broker’s reputation is very important. While there are negative people or even competitors who might want to just use cruel tactics by writing inimical reviews about their competitors, it is important to note that this is the exception and not the norm, if a broker is receiving more negative reviews with regards specifically to withdrawals, run away from them. Do not trade with them.
We considered this in our decision of choosing the best forex broker for beginners in other to bring you the best broker to kick start your journey as a trader.
Have you ever had to trade a piece of news and the entire trading platform froze, just before you took the position or after? leaving you completely out of control until the volatility has reduced? The best forex broker for beginners never does this and other bad tactics.
Bad brokers often do this to kick you out of the market, it is effectively stealing, but they get away with it in the name of technical challenges. No, it is technical stealing.
Have you ever tried placing a trade and then price slippage caused you to enter the wrong market price? For example, the market is trading at 1.2342 you placed a trade and the platform delays your execution and takes the trade at 1.2385? Your broker is manipulating the price, so you end up paying more than you should, this also reduces your profitability greatly and may have a huge impact on your overall portfolio.
If any of that is happening to you, it is time to reconsider your broker! Some brokers are notorious for such practices to take advantage of you and steal your money. This practice is not tolerated by any professional forex trader and neither should you. The best forex broker for beginners in 2020 offers faster execution speed, less slippage, and close to zero freezing of their platform during highly volatile market conditions.
Other Traders Experiences when identifying the best forex brokers for beginners in 2020.
You can not make all the mistakes in the world, you often have to learn from the mistakes of others. Traders are often some of the internet savvy people out there, we spend the majority of our time on the internet anyway. Thus if a broker is messing up with a trader, chances are he or she might have called them out.
If a broker is dealing a bad blow to a good and experienced trader, he would call them out. The problem is new traders do not know what to expect, thus might not be able to determine whether they are receiving the best trading conditions or not. Thus bad brokers thrive on the extensive advertisement of their platform to bring in new and inexperienced traders to their platform to milk them dry of their hard-earned money before the trader moves to a more reliable broker. With over 10 years of trading experience, we patronize the business of some of the best forex brokers because a broker can make or unmake you.
If you have read this far, it means you are serious about forex trading and willing to take the necessary decisions to get you there. If you are this person willing to begin making money from trading in the forex market, consider our student section where we could teach you how to trade forex professionally and equally give you forex signals to bootstrap your profits even while you learn to master the art of trading forex.
Why do we choose JustForex as the best forex broker for beginners in 2020
The truth is, a beginner in forex trading needs the best broker to trade with. There are several broker’s out there who provide awesome platform for traders, but usually these brokers limit their platforms to certain jurisdictions, and also have high initial deposit cost.
Justforex has zero initial set up cost, indeed you can register an account without even funding it, and when you choose to fund, you can decide to fund with any amount you choose.
You equally have several options to deposit money into this broker, they have perfect money, bitcoins, mobile money, M-pesa, skrill, neteller, credit card etc. while several other brokers reject many of these payment options and stick to just credit cards and bank transfers which are very expensive to transact with.
In truth, while JustForex provides these excellent services, their platform stability, and service experience rival the top brokers, the only focus is on big clients and institutional brokers.
This makes justforex beginner-friendly, and thus the best forex broker for beginners in 2020. If you are new to forex trading, this is the broker you want, as your funds go above $10, 000 that’s when you might consider others.
Indeed, choosing a bad broker could have detrimental effects on your trading goals, and could even affect you mentally
While your friends who choose the best forex broker for beginners in 2020 could be smiling. Indeed whether you drive a Lamborghini next year, or you become homeless by next year due to trading could be associated with something as simple as not choosing the best forex broker for beginners in 2020.
It might sound look a simple idea, but your broker can make and unmake you. They sit at an opportune end of the trade, they see all trades, they have the platform, they can manipulate every single trade against you, yes brokers have been caught doing these and more, do not be surprised, choose the best broker and be free from all these troubles.
Choosing a broker is like choosing a wife, it serve’s your best interest to choose the best forex broker for beginners to help you right from the word go.
Ever worked with our choice for the best forex broker for beginners in 2020? let us know your experience in the comments section.