It is actually insane if you think about what trading was like a few years ago. Even when I was young, I was interested in the forex market. If I had wanted to participate at it, I would have had to go to the bank and order any currency. For example, I could have changed my 50 D-mark note for 20 Dollars. There simply were not a lot more opportunities. They would have probably called me loony if I had told them that I wanted to invest my 50 DM in USD/CNY. In addition, there would have been ridiculously high fees which would have screwed the best trade you could make. Long story short: there was no chance for a small investor like me to go in this direction and make money out of it.
Today, things are completely different, of course. Today, I can even trade profitably with only 5 Euros. Therefore, I only need to sign up with a broker, deposit money and start the platform. There is nothing more behind it. But be careful: it really matters which broker you sign up at. You cannot simply choose one of the 2837 brokers out there and start trading. You should really care that your broker suits you, too. This is not self-evident and you should get the idea out of your head that the broker will adapt to you. Quite the opposite is the case, actually. So, let us take a look at what the specific needs look like:
Big money or rather small money?
First of all, the most important thing is that you choose the amount you want to bet. No matter if you are a multimillionaire or not – at the beginning, you should start from scratch in order to keep the learning effect as cheap as possible. Because at the beginning, you will make mistakes and you absolutely have to avoid that you lose a lot of money thereby.
That is why you should first choose a broker that allows you to trade with small amounts. No matter if you want to trade with a five-figure sum of money at some point or not. If a broker comes into question or not especially depends on the minimum deposit you have to make. The broker decides how much the minimum deposit should be, and it can vary a lot. Some brokers allow you to trade with only 50 Euros, others for example want 1000 Euros as a minimum deposit. So, if you have only got a budget of 100 Euros and you want to trade at a broker with a minimum deposit of 1000 Euros, then, you have got a problem. Vice versa, this is of course not a problem. However, you should maybe wonder if a broker with a minimum deposit of 50 Euros is the right broker for you, in case you have such a great budget of 1000 Euros. But that is another story.
The first step is to find a broker where the minimum deposit is lower than your budget, of course. That means all other brokers are out of the question.
Own platform or Metatrader
If you are quite good at softwares, you have probably noticed that there are companies which only support their own technical developments – like Apple- and some which licence their software – like Microsoft. This is also the case with forex brokers. Every broker needs a platform to trade on. Developing such a platform is not the easiest thing and costs a lot of money. In order to save that money, many brokers simply acquire a licence like Metatrader, for example. This is an advantage for them since they do not have to develop an own platform but they can offer their traders a platform which they may already be familiar with. But it also brings the disadvantage that you cannot set yourself apart from the competition. Indeed, the really big forex brokers, those are the ones with millions of active traders, all have their own platform which is perfectly customized to their traders’ needs.
Basically, you can say:
Own platforms are better for beginners – Metatrader brokers are for professionals!
Apart from that, there are also important differences with regard to the qualities of the broker. For example, some brokers may offer 12 currency pairs, others 200. Basically, people think that more is equal to better, but this is not the case. If you trade foreign currency pairs for the first time, you are unable to cope with all the information anyways. Then you surely do not need a huge choice of foreign currency pairs either!
Then, there is a customer service which you just cannot have two different opinions about. I mean, in this context, there are only very good or catastrophically bad ones. And there simply are no different opinions about that. Above all, you need to know how important the customer service is to you. If you need it often or not.
The best broker in 2014
Okay, I’m not going to mince matters now, on purpose 😀 Such discussions actually never make any sense because everybody has different standards. This is why you can argue about things like that for days and still, you have not made any progress. The best broker simply is the broker that suits you best. The only thing you can do is to give recommendations to traders who are similar to each other. For example, beginners.
If you are not yet quite good at forex trading and have not traded yet or only a few times, then, there are only few brokers that come into question and according to my opinion, there is only one which can be rated “very good”. The name of this broker is Plus500 and it is a listed broker with millions of active traders. The reason why Plus500 is that good is the fact that its offer is customized perfectly to beginners. The platform is very very simple but still allows to trade advanced options. I personally think that there is no other broker which can keep up with Plus500 in this respect.