A Forex-Trading Company: Why Do You Need One?

A broker Forex company can take care of your trading. But what should you know to pick such a company?

The Great Trade

There are two options: a Forex broker can give you a trading account, and you?ll have to do all the work solo. Or it can develop trading strategies for you, gather analytics, regulate leverage, and basically do everything else.

If you don?t know much about trading or simply have no time to take care of it personally, here are some tips to pick a valid Forex broker to trust your money.

Know Your Broker

Let?s review which criteria a solid outsourcing brokerage firm should meet.

1. Regulation

You trust the broker to handle your money. So, it?s important to know if they are licensed to operate and who regulates their work. For example, in the UK Forex brokers are regulated by the Financial Conduct Authority. (FCA) and in the US it?s up to NFA.

2. Pairs

Trading Forex is all about knowing your pairs: USD/GBP, EUR/GBP, and so on. A broker can have a whole arsenal of currencies: from Malaysian ringgit to SA rand.

However, you?ll mostly be interested in the ?central? ones: US dollar, euro, Japanese yen, Chinese yuan, pound sterling, and Swiss franc. A broker must offer this type of currency pairs.

3. Features

Since you won?t be trading personally, you don?t have how trading features work. At least so far. But you still need to know what kind of services your broker has to offer.

● Money. A legit broker should guarantee easy depositing/withdrawal.
● Leverage. Leverage basically means borrowing more money to make an investment. If your broker?s leverage is 100:1, they can hold a $100,000 value position. However, you don?t want your leverage to be too big, as it boosts the risk of losing your money during margin calls.
● Deposit. It depends on your current capital. Forex brokers have a lower ?entry level? than stockbrokers. You can start up with just $50.
● Commissions. And of course, they charge fees. Mostly they take a piece of the spread, aka the difference between the bid and ask of a currency pair. Look around and see how much they charge.

These are basic rules, but you?re good to go with them. But what are the benefits of having a broker who does trading for you?

Cons of a Trading Broker

When a brokerage or another financial firm trades on your behalf, it basically manages your FX account/hedge fund, etc. So, what are the central cons?

● Availability. With such a company, you can start trading right away. You don?t need expertise, a university degree, or hours spent digging through Investopedia. Their staff already includes trained professionals.
● Warranty. A reliable Forex-trading company should provide certain warranties. It can be a portfolio, account insurance, money reserve, ease of funds management, and so on.
● Regulation. If they are officially regulated, that means they?ll have to abide the laws and can?t say adieu leaving with your money.
● Time. Trading is a time-consuming process. If you?re not ready to dedicate hours to researching the market and monitoring the foreign exchange situation, you?re not likely to succeed.
● Additional income. Investing in a Forex-trading company is basically setting up a source of passive revenue. Money can make money if you choose the right team.

And of course, Inflation. Investing is one of the effective methods to outpace the inflation rate. In the UK, it?s averagely 2% per year, so do your maths.

Speculate & Accumulate

But you need to remember: a forex-trading company isn?t a goose that lays gold eggs. It?s more of a long-term investment in your future. And your future is worth it.