Today we are going to tell you about What is Forex Broker And How Can We select Best Forex Broker, Forex is an abbreviation of Foreign Exchange. It describes the conversion of one currency into another currency and also refers to the global financial market, where currencies are traded online around the clock.
There is a misconception that to start trading Forex you need either be a millionaire or Harvard graduate. Let’s dispel it. Thousands of people buy and sell currencies without notice while professional traders consciously benefit from it.
Think about when you’ve traveled abroad on holiday. To pay for local goods and services you needed to exchange your money.
If while you were on holiday the unemployment rate in the US fell and the dollar increased in value by 5%, then when you exchanged your surplus foreign currency back, you’d make a 5% profit in your local currency.
In this way, you’ve earned a difference in currency rates by buying and selling currencies. The same process applies even with corporations. For example, an American company needs to buy machinery in Germany.
To pay for them they need to obtain the local currency first, just like you do when going on holiday. The only difference is that companies exchange much larger amounts and create supply and demand on a particular currency.
Supply and demand can move market prices. When the world needs more euros, the price of the euro increases, and when there are too many dollars circulating, the price drops.
To balance the market, central banks regulate the overall volume of their national currencies by adjusting the refinancing rate. That’s why traders constantly monitor world news.
I remember when I first started trading forex in early 2015. Back then, I opened an account on a random broker (yes, I didn’t even know who are the best forex brokers) and threw in $500 that I had been saving.
Of course, I had read experts’ articles about trading strategies and stuff like that. First, I made a little money, but after a month, my balance is 0. I was devastated.
It was then I realized forex trading is a cycle of analysis. You analyze the market, you trade, and then you analyze again and change your plans.
No strategy is concrete. You need to constantly analyze the market in order to make money because the market will change every minute and second.
So what variable is the only thing that doesn’t change? It is a good broker, or to be more specific, the best forex brokers. Back then I thought all brokers are the same so I chose a random one. I was so wrong. Choosing the right Forex Broker will determine 50%-70% of your winning chance.
Standards Of The Best Forex Brokers
I can see that many traders think choosing the right broker is easy. Just choose the one that has a low cost. Or the one that has licensed. Or the one that has a big bonus. Well, they are wrong. The one with low spread may have high slippages.
The one with big bonuses may have really slow servers. To choose the right forex broker, you must look at many aspects and factors. Sound like hard work, right? Fortunately, you’ve got me here.
After 5 years of trading with many different brokerages, I am confident to list down the 5 best forex brokers in my opinion.
Trustworthy
When talking about reliability, you mean security and safety. Can that broker keep your fund safe? Can it be trusted? What if it is a scam broker? How to know if a broker is reliable? The answer is regulation, my friends.
Regulation is like a certificate that trusted and famous financial organizations in the world give to brokers if the brokers can meet all the standards required. It represents the standards, capabilities, and reputation of forex trading brokers.
When a broker is regulated by those organizations, you can put your trust in them completely. All the 5 brokers I mentioned above have trusted regulations so there is no favorite one.
However, make sure that you know what kind of regulation your brokers have because regulation of an organization can only be applied to those in the same country. For example, a US regulation can’t provide any protection to traders from South Africa or Thailand.
The regulation only means that that broker is reliable enough to work with. Therefore, a broker doesn’t have to have too many regulations. One trusted regulation is enough.
Another factor that can guarantee the credibility of a broker is its trading volume. If the trading volume of the broker is high, it means that there are many people trading with that broker.
Trading Cost
It’s not easy to make money from trading forex, which we can all agree on, so we need to find brokers who require the little cost to trade on their platforms.
The trading cost is the total expense we calculate from two main factors, spread and commission, and others.
First, I will compare the spread of the 5 brokers I mentioned above. I can guarantee you that their spreads are among the best in the forex market. I will show you the spreads of the most popular currency pair, EURUSD
Then, I’ll compare their commissions. All of them are commission-free for their regular accounts. For the ECN accounts, the commission rates are different. They have to charge a commission for ECN accounts because the spreads than are nearly zero.
At this point, you may think that “Hey, I also see many other brokers who have even lower spreads and commissions.” You are right. There are tons of brokers who offer lower, why do I choose these five?
Like I have said earlier, the total trading cost you have to pay depends on various factors, which slippages. Slippage refers to the difference between the expected price of a trade and the price at which the trade is actually executed.
Slippage often occurs during periods of higher volatility when market orders are used, and also when large orders are executed when there may not be enough interest at the desired price level to maintain the expected price of the trade.
Therefore, when you consider a broker, you should also pay attention to their slippage. Exness and FBS guarantee that there is no slippage on their platforms. XM says it hardly happens.
I have traded with all these three and here’s what I can say about it. All brokers have slippages. It’s a natural thing in forex trading. The important is how much the slippage is. Is it lower than other brokers (I think slippages that are lower than 100 pips is good enough)?
How do brokers compensate their customers? I think Exness, FBS, and XM are the brokers who can handle very well when it comes to slippages.
Another thing I see that you really enjoy is a bonus and rebate. Indeed they sound good in the beginning. But everything has two sides.
Trading Conditions
There are 3 levels we can use to rank trades, which are: beginners, normal traders, and professionals. So, a great broker is the one who can provide different types of accounts for all types of traders.
The conditions of the accounts of the 5 brokers I chose are similar. They all have 3 classes of account for each targeted trader type: mini/micro accounts, regular accounts, and ECN accounts for each type respectively.
Customer Service
Forex trading is difficult. The best forex brokers must be able to support their customers at all times and in many different languages.
Most brokers assist their clients via live chat or email. However, I think the most effective way is a face-to-face conversation. That means it is better if the broker has local offices in your country or region.
Cabana Capitals seems to have the best support team. This broker has very strong sales, support, and marketing team who is always available to the local markets. Besides, their IB network is also very strong.
Therefore, if you have any problem, just chat with them on the website, and you will get the response instantly. Moreover, Cabana Capitals supports clients 24/7.
Cabana Capitals Reviews
Meet a broker – Cabana Capitals
A broker is an intermediary between traders and other Forex market players. Cabana Capitals broker helps people to enter the market with smaller amounts of currency.
Cabana Capitals provides its traders with the most beneficial quotes by combining price quotations from several market participants and liquidity providers. That is possible because of an electronic communications network (ECN) technology.
Such networks allow instant order execution, cooperation with trading platforms, automated trading processes, and secure transactions. Cabana Capitals provides you with leverage which allows you to multiply your profit.
Cabana Capitals provides swaps free account so the trader can hold this position as long as possible without any commission on any trades.
With up-to-date trading apps, you can trade online 24/5, and from anywhere, anytime as per your wish.
How We Can Make Money On Forex?
If you look at the EURUSD chart, you can see that the price of the euro against the dollar is constantly changing.
Economic news and market events influence the price all the time. Assume you know in advance that according to the ‘National Statistics Service report’ the unemployment rate in Europe has decreased, then the price of the euro will increase and you should buy euros.
Or if you know that due to the latest records of ‘Statistics Portugal’ there is a deficit in the trade balance and that will make the value of euro fall, you should sell your euros.
Volatility
Volatility measures price variations over a specified period of time. It increases when macroeconomic factors such as inflation, unemployment, and GDP become more variable. Higher volatility creates trading opportunities you can benefit from by keeping up with financial news.
For example, if you know from the news that the inflation rate in Europe will decrease then you can earn by buying EURUSD at the lowest point, and selling at the highest point.
About Cabana Capitals:
Cabana Capital is a premium forex trading company that was established to provide clients with the most advanced and reliable trading tools, safe and ideal trading conditions, along with a comprehensive education of the market and how it works.
Cabana Capital has something for every kind of market. Regardless of whether you are a retail or institutional client, we have just the right trading solutions for all your needs.
Choose from a wide range of markets to trade using our impressive trading tools and instruments. We offer a huge number of currency pairs, spot metals, and indices, CFDs, among many others.
Cabana Capital has the perfect account for every kind of trader. Our trading platforms are based on the latest technology to ensure reliability and security. We try our best to ensure they run smoothly on any device.
To help you play an active part in your trading process, we provide quality and comprehensive education on the trading industry. You are sure to benefit greatly from this program.
They also offer investment programs that can encompass traders with varying degrees of experience in the market.
Cabana Capitals Limited is incorporated in St. Vincent & the Grenadines as an International Broker Company with the registration number 24185 IBC 2017.
The objects of the Company are all subject matters not forbidden by International Business Companies (Amendment and Consolidation) Act, Chapter 149 of the Revised Laws of Saint Vincent and Grenadines, 2009, in particular, but not exclusively all commercial, financial,
lending, borrowing, trading, service activities, and the participation in other enterprises as well as to provide brokerage, training, and managed account services in currencies, commodities, indexes, CFD’s and leveraged financial instruments.
Risk Warning: Trading Forex and CFDs involves significant risk and can result in the loss of your invested capital. You should not invest more than you can afford to lose and should ensure that you fully understand the risks involved.
Trading leveraged products may not be suitable for all investors. Before trading, please take into consideration your level of experience, investment objectives, and seek independent financial advice if necessary.
It is the responsibility of the Client to ascertain whether he/she is permitted to use the services of the Cabana Capitals based on the legal requirements in his/her country of residence.
Deposits & Withdrawals: Visa/Master Credit card, Skrill, Neteller, Perfect Money, Bitcoin, Local Bank Transfer.
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Cabana Capitals Official Website:- cabanacapitals.com/
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