Like in any other fields, beginners always have certain difficulties in joining and get familiar to it, especially in forex. Forex market has been developing recently and there are more brokers than ever before. This article shows how to choose perfect forex brokers for beginners.
Beginners and the misunderstandings
Most beginners misunderstand that demo account is the most suitable to start, while Cent account is actually their best choices. Demo account does not only have some bad effects but is also not working for beginners.
Experts’ preferences are ECN accounts, which are easily volatile and should not be used by the beginners. Moreover, there are so many slippages and gaps that 95% of beginners could lose their money, thus, remember not to invest too much at this stage. In fact, beginners should earn 3 to 5% of profit monthly, which is a good rate though.
In common, beginners make their decisions depending on the news or event, which means the opening time of a position is within the news release time. This makes their investment ineffective due to the lateness of the information. Experts, meanwhile, have their earlier steps with substantial information and inquiry. Their positions are opened only 15 minutes just before or after the news released.
Misunderstanding about the perfect brokers for beginners.
There are no perfect or the best brokers for all beginners. Each trader has their own trading strategies, experiences, country’s conditions… and therefore, there is only the most suitable brokers for beginners. Further, they should focus on what they can learn and minimize the losses as much as possible.
Choosing the most suitable brokers for beginners.
Though it depends on the trading strategies, experiences, regulations and other conditions, there are some common standards applied to choose the most suitable brokers for beginners:
Trustworthy brokers
Good local support
Low deposit allowance
Small trading lot allowance
Simple and easy
Good training and coaching programs
Trustworthy brokers:
As it is explained in the article which shows how to choose the most suitable forex brokers, the first standard to choose a broker is its credibility, which means it must be reliable. However, in this case, it is not really necessary as the amount of investment for beginners are small. It is no use in cheating a new trader with small fund. Beginners, at this stage, should pay their attention to the services, the convenience and payment systems that are easy and simple.
Good local support:
Forex, itself, is a complicated sector which is not easy to understand and even join in. Therefore, it is necessary for beginners to start with guidance from supporters, especially the local supporters who could speak native languages. This helps a lot with some operations such as installing MT4, 3D security of Credit Card, logging in or registering…
Low deposit allowance:
The importance for a beginner is that they could deposit a small fund (for example, less than $100 for 3 months). Brokers which require just low deposit are the most suitable for beginners, moreover, they should offer best services and good payment systems. As the main target of beginners at this stage is to have experiences and minimize the losses, they do not need to invest a big amount of money.
Small trading lot allowance:
It is suggested that the positions at the early stage for beginners should be as small as possible, such as XM with 0.00001 Lot USD, Exness and FBS with 0.0001 Lot USD. While standard lot is 100000 USD, which is too high, beginners are advised to use Micro accounts (from XM) and Cent accounts (from Exness and FBS) as there is no minimum for deposit. Even, you just have to deposit only $10 to trade for a month and also, withdraw the winning money.
Simple and easy:
As the beginners are new to the market and even to the trading system which is complicated itself, the good thing is to be familiar with them and make them simpler:
Trade with the easiest brokers
Use web trade / web terminal to trade first. After a while, trade MT4/ MT5.
Use the easy and simple payment methods such as Visa/ Master.
Good training and coaching programs:
Training sessions are needed for beginners. Some brokers could organize many coach programs which attract many new traders. Besides helping beginners get well with the forex market, guide them some operations… brokers also ask to invest a big amount of money, which is, in my opinion, not recommended for beginners.
Top best forex brokers for beginners.
XM and Exness are rated the best forex brokers in 2018, which have the highest scores and some differences between their services, payment systems… While you are allowed to open smaller positions (0.00001 lot USD) and attend some great training sessions at XM, Exness has bigger positions (0.0001 USD) but great supports and friendly payment systems.
FBS, whereas, also has Cent account but only offers the best services in the countries where its offices are opened. Most of the countries are from Southeast Asia like Vietnam, Thailand, and Indonesia.
Below are the scores of each broker (out of 10):
XM.com: 9/10
Exness.com: 9/10
FBS.com: 8/10
Beginners and the demo contests for practicing.
There is a fact that demo contests are mostly not for beginners. The winners often are professional investor or experts who are almost from China, Thailand and Indonesia. They use robot trading to get higher efficiency and higher profit rate. In contrast, beginners, who just get familiar with the forex, cannot use the robot trading. In addition, their main focus is to keep risk and loss rate low, not like experts, in these contests, who concentrate on high profit rate while ignoring risks.
Beginners and the welcome bonus.
Welcome bonus is good but not easy to obtain. If it can be withdrawn, there are many conditions accompanied that, probably, require a lot of deposit amount and number of transactions/ lots. Apparently, this makes beginners cost more and even leads to the loss.
Advices for beginners to start trading:
Create and use Micro/ Cent account.
Deposit less than $100 for the first month.
Minimize the losses and learn to manage the risks
As higher profits come with higher risks, beginners should be conscious and not attracted to some investment promised to obtain high benefit easily.
Also, do not use robot trading as you are just familiar with the trading systems. It is not until you are aware of trading methods, orders, positions and the automation tools that you could use robot to follow your trading strategy.
