How to choose a Forex broker - A Forex rebates perspective

For new traders, choosing a Forex broker is a big first step into the Forex world. The broker you choose can forever affect your view of the Forex trading world, when taking rebates in to account, the task can become even more complex.

Beginner traders might give high regard to the rebate rate a broker provides, but this is only one of a long list of factors, which need to be considered when choosing your first broker. As a general rule, RebateMyPips discourages choosing a broker solely for the best rebate rate. Although the rebate rate can and will affect the final spreads you trade with, this should not be the major factor in your decision.

There are several factors to consider when choosing a broker:

Regulation

The most important factor when choosing a broker is their regulating authority. Personally, when handing over thousands of dollars to someone, I would like to know that my money is safe. Different countries have different regulatory authorities. Here is a partial list of the most prominent regulatory authorities.

• NFA (National Futures Association) and CTFC (Commodity Futures Trading Commission) - The official regulatory bodies in the United States.
• FSA (Financial Services Authority) - The official regulator in the United Kingdom.
• ASIC (Australian Securities and Investment Commission) - The official regulator in Australia.
• SFBC (Swiss Federal Banking Commission) - The official regulating authority in Switzerland.
• BaFIN (Bundesanstalt für Finanzdienstleistungsaufsicht) - The official regulator in Germany.
• AMF (Autorité des Marchés Financiers) - The regulatory authority in France.
• CySEC (Cyprus Securities and Exchange Commission) - The regulatory authority in Cyprus.

Before entrusting your hard-earned cash with any broker, we urge you to make sure that they are regulated by one of these regulatory authorities. As a service for RebateMyPips customers, we make your life easier by listing only regulated and verified brokers. When choosing one of the brokers offered by RebateMyPips, you can rest assured that your money is safe.

Spreads and Commissions

As a trader, you will be subject to spreads and/or commissions for every trade you make. It is important to select a broker with the cheapest transaction cost. When considering the spreads and/or commissions charged by a broker, you should also take in to consideration the rebate rate RebateMyPips offers for that broker. On the RebateMyPips website we have provided our customers with a simple broker comparison table, to aid you in the comparison. Please consider that a higher rebate rate does not translate directly to lower spreads. We always recommend that you compare brokers` spread tables and subtract the rebate rate to see the effective spreads you will pay with each broker. For example, a broker with loose spreads and a higher rebate rate might end up being cheaper than a broker with tighter spreads and a small rebate rate. Doing your homework is important here and as always, the RebateMyPips support staff is here to aid you in your decision. You are always welcome to contact us with any questions you may have.

Execution

Execution is an important factor when selecting a broker, as it is tied in to the fundamental way a broker operates. With most regulated brokers, the execution should be immediate with normal market conditions. Why is execution rate important? Well, this ties in to the way the Forex market works in general and is outside the scope of this article (For an interesting overview of how Forex works, see http://www.golearnforex.net/forex-101-classroom/98-how-currency-exchange-forex-market-works.html). For the purpose of this article, execution speed is the difference between the prices you bid and the rate your order is actually filled in. A large difference, i.e. slow execution, could make winning a trade very difficult. This is even more important if you plan on scalping.

Trading platform

There are many different trading platforms available today. A side from the industry leader MetaTrader, many brokers have their own trading platforms, and most brokers offer a selection of several platforms. When choosing a broker, you should consider the trading platforms they offer. MetaTrader is a good platform option to have. If you learn MetaTrader, you will be able to trade with most brokers, since most brokers support MetaTrader. If you are on the road a lot, you might want to consider a broker with a mobile platform. iPhone, iPad and Android trading platforms are gaining popularity with many brokers, and allow you to trade anywhere. Some brokers also provide a web-based trading platform. This allows you to access your account any time, even if you don't have access to your own computer and/or mobile device.

Customer service

When dealing with your hard-earned cash, you should always be in control. If you have any issues with the trading platform, deposit, withdrawal, etc.  Your broker should have a live support staff ready to resolve any issues you might have. Since you can trade 24/7 with most brokers, you should make sure that there is a 24/7 support staff, ready to assist you with any questions or issues you might have. RebateMyPips customers also have the added advantage of having our skilled account managers, on-hand, to assist with any issues. Through our relationship with the brokers we represent, we are able to assist you in resolving issues you have with your broker.

In conclusion, we urge you to be a smart trader. Don't place your money with a broker you don't fully trust! When considering a broker, you should always consider all of the factors described above and not take the decision lightly. Although we are a Forex rebate provider, we do not recommend choosing a broker only considering their rebate rate. To help you in the choosing process we have the broker comparison table and pages filled with detailed information about each broker, including all the factors discussed above. If you require any assistance in choosing a broker, you are welcome to contact us and our skilled support staff will be happy to assist you in the process.

Finally, we wish you happy and profitable trading, and thank you for choosing RebateMyPips as your Forex rebates provider!