Moving from critical reasons to more common reasons, one of the factors that urged more than one customer to change brokers is the average level of spreads that are charged. For example, there are still brokers charging a spread of 3 pips in the EUR / USD pair. While this was the norm a few years ago, today it is considered extremely expensive. Switching to a broker that offers the EUR / USD at 1.5 pips or less makes sense, since the spread becomes the "cost of doing business", and over time can generate a loss in operator income, especially if you trade frequently using short time frames.
Another good reason to switch brokers can be an unstable platform. If you find that the trading platform is disconnected very frequently or that it takes a long time to execute an operation, then this is a convincing proof of incompetence or dishonesty. Dishonesty is more likely if these disconnections or freezes happen every time you are trying to enter a trade where you would have made profits quickly. Of course, it is important not to be paranoid and not to blame your broker for all your losses. However, as the Forex market does not have a centralized place, brokers have a commercial incentive to "shadow" their spread just above levels where many of their customers have stop-losses set in open trades. determining whether your broker is acting shady is to see if these price movements do not match the price feedback of other brokers.
Watch two or three. If your broker tends to produce sudden and unexplained spikes in price, which are not followed by other brokers, it is time to think about moving away from it.
A good way to get a better understanding of whether a particular agent is the best for you is to think about what the brokers are actually doing, and see things from their point of view. In order to do this, it is helpful to start with some facts about Forex trading:
1. Most currency brokers are not really trading any currency in the market. They are simply providing a price indicator, in the movements of which their customers can bet in exchange for two effective quotas: the spread or commission, and a small charge during the night that incurs each night any position that is left open. These brokers are in antagonistic relationships with their customers: they make money when their customers lose and lose money when their customers win.
2. The remaining currency brokers tend to monitor the trades of customers who have profitable trading data, and cover the aggregate positions of these traders with a bank. These brokers have a less contradictory relationship with their customers, but they may still face problems in the proper way of covering themselves in rapidly evolving markets.
3. The real Forex market is dominated by four large banks which together account for about 85% of the market volume. These banks provide liquidity to the smaller banks, which in turn do the same with smaller banks, who then provide liquidity to the brokers, and so on in the chain in size and importance. This tends to mean that the smaller the broker, the worse the price and the spread that is willing to give, since they themselves will not be able to get premium prices. The dilemma here is that these smaller brokers tend to offer lower minimum deposits. The more money you have to deposit, the better the service that will be available to you. Of course, this does not mean that you have to go higher up the chain than the one that is appropriate for your account size. In general terms, it is a good idea to adapt the Forex broker to the size of your account.
4. Much of the Forex market has a bad reputation and is poorly regulated. When these facts are combined with the natural tendency of the human being to be tarnished by greed, it creates a profitable vacuum for unscrupulous brokerage houses that have no reputation to protect. This is not to say that small Forex brokers are fraudulent, but do not assume that your deposit is secure just because you opened an account with a broker. However, if that broker has a public reputation and is subject to regulations, you will surely be able to sleep peacefully.
There are other good specific reasons that may play a role in determining the choice a broker are as the availability of a specific pair that you want for trade, platform, quality of customer service and other "concrete" things. Now that we have covered all of the critical aspects to consider when choosing a broker, it is time to shift your focus on how you can conquer the forex markets - with hard work and patience, of course!
