Importance Of An Established Broker

When choosing a forex broker,the first thing you must know and understand about them is whether they are an established and reputable company. This can’t be stressed enough, as establishment proves competence and trustworthiness. By definition, ‘establishment represents a dominant and trustworthy organization who has proven themselves to offer a reputable and well-known service consistently over an amount of time- generally a few years or more.’ Brokers who are fraudulent or badly managed do not last very long. Hence when going with a broker who has been in the game a few years, they tend to be much more trustworthy.

Want to check all online brokers established in 2017? Follow the link and get the list of all brokers from 2017.

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What Makes An Established Broker?

We now know that a forex broker should be around for a few years or more to be considered ‘established’. As well, during this time, they must prove themselves to be reputable. But what is it exactly that allows these forex brokers to stay in business and maintain a strong reputation?

Generally speaking, established forex brokers are fully licensed, and follow the rules and regulations of competent and reputable regulatory agencies. They have programs and services in place to protect the integrity of the markets. As well, they protect consumers from fraudulent practices and offer competitive and stable markets to trade in.

Another aspect of established forex brokers is their location. With the internet, there is no reason to visit a brick and mortar location, however that doesn’t mean location is not important. For instance, a broker who is located in a country with very little regulation requirements may pose some issues to clients. If there is a dispute between a client and the broker, it may be difficult to resolve due to lack of support and regulations. Brokers from countries like these are more often fraudulent than in countries with regulations.

Reputation And Track Record Is Everything

We now know what makes a forex broker established and the importance of establishment, but how do you know when an established forex broker is in fact reputable and trustworthy? To be competent in your decision with a forex broker, it’s important to look at the track record and reputation of the company.

By definition, ‘the track record of a company is a record of past performance, often taken as an indicator of likely future performance’ and as such, a forex broker with a clean track record is a strong indicator of an established firm. Brokers who are regulated by a reputable regulatory agency, and who have not been scrutinized by them, will be listed on their public ledger as a trustworthy broker. Searching these ledgers are important to ensure good track records. As well, searching for reviews and forums pertaining to a forex broker can be a good indicator of the brokers performance.

Developments In The Industry

Modern forex brokers have utilized leading technology and software, giving their clients ample opportunity to trade successfully online. With the wide adoption of this software came standardized trading platforms like the MT4 platform. Forex brokers from all over the world can utilize them. However, just because the platform is well known and established, does not mean that the broker is too. Today there are literally thousands of brokers claiming to be reputable, while many are not. Which is why it’s so important to ensure the broker you choose is well established with a clean track record.

In recent years, forex trading has exploded with the number of online and mobile traders. With the popular increase of traders, there is also an increase in fraudulent brokers.

This has caused the industry and regulators to develop new rules and regulations to protect the consumer. While regulators are doing everything they can to protect consumers, it is ultimately up to the consumer to utilize the measures that have been put in place for choosing a reputable and established broker.