If you’re reading this article, I’d like to congratulate you on choosing the right path to start your trading career. You must have done quite a lot of researches already but you can feel rest assured now as I’m confident that this article is definitely the right guide for you.
To start off, here’s our list of the best forex brokers for beginners (Latest updates).
- Common misunderstandings among beginners
It’s almost a widely known misunderstanding that demo account type is the best for beginners but that’s just plain wrong. As I’ve mentioned in another article of mine, Cent account is the only account you should go for if you’re new to the trading market. Beginners benefit way more from Cent account comparing to Demo account.
Another type of account that beginners should stay away from is ECN account. ECN account has lots of slippages and gaps in its nature thus making it very volatile. It’s a fact that 95% of beginners using ECN account lose their money so it’s best advised that you shouldn’t be investing too much money at the early stage.
Another common misunderstanding among beginners is the profit. Obviously, you can get 50% to 100%, or even 1000% profit. However, as traders, you’d need to look for stability. Most traders who profited a lot tend to lose all their money through careless trading eventually. In my professional opinion, it’s the best that you should keep your monthly profit stable and small, anywhere from 3% to 5% sounds good.
The last thing that I’d want to talk about is that professional traders don’t trade during the time when the news are being announced. Instead, they close/open positions about 15 minutes before/after the news have been announced.
- A perfect broker for everyone
People who are news to the trading market always look for a broker that’s perfect for them. Let me stop you right there by saying that there isn’t a broker that’s perfect for everyone. Your best broker is highly situational and depended on your trading styles, your experiences, trading tactics and your location. When you’re just learning to trade, it’s expected that you will lose money most of the time so it’s best that you should find for yourself a broker that can minimize your losses and ease your learning experience.
- Standards for choosing the perfect broker for you
As I’ve mentioned above, to choose a broker that’s the best for the purpose of minimizing losing costs and better learning experience, you should follow these standards:
– Low deposit requirements.
– Small trading lot requirements.
– Good local support.
– Good training and coaching programs.
Low deposit requirements.
This is especially important for beginners as they mostly want to deposit a small amount of money to feel safe practicing trading. My personal advice is that you should deposit no larger than $100 for practicing trading.
Small trading lot requirements
Small trading lot requirement is one of the most important things that beginners should be looking for in a broker. The standard lot for regular user is 100,000 USD and that’s just too much for beginners since they need to have as much open positions as possible. Thankfully, there’s Micro account or Cent account which allow you to have open position value to be as low as 0.0001 or 0.00001 USD. Trading with Micro or Cent accounts only cost as much as $10 for a whole month of practicing so it’s rather convenient for beginners.
Not only the forex trading market is a complicated place to learn, its trading system is a pain to use as well. Some brokers’ trading systems are rather complex so my best advice to you’d be that you should:
- Choose a broker with easy, convenient interface
- Trade using the web interface. You can try using the MT4/MT5 system later on.
- Deposit via Visa/Master since it’s much more convenient than the other payment methods both in term of costs and availability.
Beginners need good local support brokers
Local support is especially for beginners as they’re always in need of help and attention. As for me personally, I’ve also had some problems when I first started trading such as logging issues, installing MT4, Credit Card 3D security, … so I think it’s best that you should choose a broker with excellent local support who can speak your language.
It’s needless to say that trustworthy is among the most important things when you’re considering a broker. For experts even, it might be the most important thing as a broker with good reputation will cost a little bit more but you will feel safe doing business with them. On the contrary, beginners aren’t that worried about losing money since they’re only depositing so little so a broker’s trustworthy might not be that important for them.
Good training and coaching programs
Some big brokers offer their own exclusive training and coaching programs at the cost of a decent amount of money. Of course, you should always check for a broker’s reputation and trustworthiness before doing business with them, but I still think it’s best that you should invest a little for the coaching program so that your learning progress can significantly rise.
- List of 3 best forex brokers for beginners
XM and Exness are among the top biggest forex brokers so obviously they’re trusted. XM allows you to open smaller positions (0.00001 lot USD) and with other benefits such as exclusive training programs as well.
Exness is currently the biggest retail forex broker in the world. They have Cent account with which you can have your trading positions to be as small as 0.0001 USD. Exness also offers excellent customer support and cutting-edge payment system.
FBS also offer the same service as the other two brokers mentioned above. However, their service is targeted mostly at South East Asian countries such as Indonesia, Laos, Thailand, and Vietnam…
- Should beginners join demo contest for practicing?
I’ve done my own research about demo contest winners and found out that most of the winners are Chinese, Thais and Indonesian with profit rate over 10,000%, which means they use means of exploitation such as bots to win the contests. Beginners can get their profit rate nowhere near high as theirs so you’re only wasting your time joining these contests. The whole concept of demo contest is to focus on profiting and to ignore risk, which is the opposite of normal trading strategy.
- Should beginners get welcome bonus?
Obviously, a little more money couldn’t hurt. However, you should be aware that most brokers that offer welcome bonus packet also have strict policies that come with it such as the lots traded requirement to prevent cheaters from withdrawing the bonus. And most of the time, these policies will eventually lead to your loss of money so you shouldn’t be too worrying about withdrawing your welcome bonus.
- Advice for beginners
Use Micro/Cent account to trade
Deposit no more than $100 for the first month
Learn about risk management
I used to work for a big broker and there’s a trick going on to lure people into forex trading such as promising them high percentages of profit but with the condition that you’d have to deposit a large amount of money, like tens of thousands large. I mean sure, they might win some big profit eventually in months or years, but they will lose everything in the end.
Don’t use robot trading. Only the experts have enough knowledge to customize the robots to their own trading tactics and styles to be able to gain a decent amount of profit monthly. It’s the best that you trade by yourself until you realize that you need some automation tools to help with some parts of your trading processes.