BROKERS operate on many financial markets. Among other things, they act as intermediaries in executing buy and sell orders, i.e. assuming long and short positions on the international Forex market by investors.
They can also enable us to invest on the CFD market. It is worth finding out which parameters should be primarily taken into account when choosing a Forex and CFD broker for oneself.
Is using the offer of brokers necessary?
If we are planning to invest in currencies on the international Forex market or want to reap measurable benefits from investing in CFDs, we should establish cooperation with any broker. The investor cannot trade capital or buy specific currency pairs or CFDs on their own.
They have to sign an agreement with a broker — but first, they need to find their bearings on the brokerage market. How to choose a broker that will actually help us generate the expected profits on investments on the CFD and Forex markets?
Are regulations important?
There are many firms on the Polish and foreign brokerage markets with which we can cooperate while investing on the Forex and CFD market. Most of them are regulated by relevant supervisory institutions. In Poland, this institution is the Polish Financial Supervision Authority.
A broker who holds a licence from its competent supervisory authority in the country where its head office is located certainly operates legally and conducts reliable brokerage activities. This undoubtedly reduces the risk incurred by those players who prefer to take advantage of the offer of brokers remaining outside the area of regulations.
What platform does the broker provide?
After verifying opinions on the broker and whether it is licensed by a supervisory authority, we should check what brokerage platform it uses (more info: https://www.xtb.com/en/best-trading-platform-kb). What financial instruments does it offer access to, is it simple and intuitive to use, does it provide technical assistance in Polish and does it enable fast execution of orders placed by the client? It is good to test the platform if the broker offers such an option free of charge and without the need to commit to cooperation right away, when contacting it for the first time.
Amounts of fees for cooperation
When choosing the offer of one Forex and CFD broker, the amounts of spreads, commissions and other fees charged by the broker should be taken into account. The broker usually collects a commission according to the percentage value determined in the agreement or in the form of difference between the purchase and sale price of the currency pair. The broker may also resign from collecting commissions from clients, but in such cases, we can expect it to profit from large spreads.
Initial deposit amount
Another, no less important factor in selecting Forex and CFD brokers, will be the amount of the initial deposit that needs to be paid to an investment account. Most of currently available Forex and CFD accounts may be financed with a small minimum initial deposit, which starts at just a few dollars.
We have chosen a broker — what comes next?
If we have already decided that our chosen Forex and CFD broker is the one we want to cooperate with and we believe its activities are reliable, it is time to sign a cooperation agreement with it (more info: https://www.xtb.com/en/best-forex-broker-kb). This will allow us to conclude transactions involving purchase or sale of foreign currencies and other instruments, such as contracts for differences. After the documents have been signed by the investor, the broker grants them access to the brokerage transaction platform, so that the investor can view their investments around the clock and take new steps in order to maximise profits.
