Things to Look for When Joining a Forex Provider - Part 1
|There are hundreds of different forex brokers on the Internet; way too many to keep track of thoroughly. And each one offers something different and targets a different kind of customer.
But why are there so many?
Well, one reason why there are so many different forex providers is due to white label licensing.This occurs when a larger, more established broker allows other smaller providers to use the larger broker's products. This allows smaller forex providers to build up their own business model without having to develop their own proprietary trading products.
Meanwhile, the established broker gets to keep a big cut of the commissions that the white label provider brings in. It’s a win-win business model as both parties benefit from the collaboration.
However, just because a forex service is white label, and ultimately providing the same service as another, does not mean you should trust that broker complicitly. White label forex providers can still change their spreads and charges and this will make some more attractive than others.
Reputation
The first thing to look for when joining a forex provider is the reputation of the company. And if it’s a white label product then you’ll want to look at both the white label provider and the primary broker. Does the provider have all the necessary legal accreditation and is it well thought of within the industry? Forex trading Internet forums can be invaluable in finding out from other traders which brokers are the best to use.Longevity
While it’s not set in stone, a useful guide to judging a forex provider is how long the broker has been in action. Forex brokers that charge high commissions and generally rip off traders rarely last long in this industry. In fact, since a forex broker can be set up as a white label product for a very small cost some brokers may not even intend to last all that long. Legal changes have helped stop this kind of thing but generally, longevity is a good thing to look out for in the forex market.Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.