I am glad that you are looking for “the perfect forex brokers for beginners”. It means that you have realized that the best forex brokers in 2018 might not be the one you should be looking for. I assume you have also removed ECN brokers out of your brokers’ list as well. It means that you are taking your trading career seriously and you must have done a lot of researches on forex trading. Throughout the trading career, you may have to change a lot of brokers. There should be only one type of broker suitable for you in each trading path.
Below is the forex brokers I would recommend for beginners like you.
- Common beginner’s misunderstandings
Many beginners are often wrong to think that the best way to start their trading career is forex demo account. As explained in the article “Cent account is the best account for beginners”, Cent should be at the top of the list of accounts for beginners. The demo account will not work for beginners and it may even have some negative effects for you as well. ECN account is also an account that you should also avoid because it is recommended for experts only. Moreover, it is also very volatile and there may be a lot of slippages and gaps.
At the early stage, 95% of beginners are likely to lose your money so you should not invest too much at this stage. You may get 50% to 100% profit or there are some traders who win even up to 10,000% profit but 99.999999% of them will lose it all later. I can assure you about this statistics because I used to work for a big broker. Most of the small traders will lose their profit if they keep the profit rate over 10%. A good monthly profit rate should stay at around 3 to 5%.
Many beginners have a false belief that people trade base on the news so, within the news release time, they should open positions. All experts do not trade within the news release time but they will instead close/open positions 15 minutes before or after the release time.
- Common mistakes of beginners about perfect brokers
The first mistake I made when I started trading in the forex trading world was trading with the so-called best forex brokers. But, after some losses, I realized that I was wrong. In this forex world, there is no such thing as “the best broker” but the “the most suitable broker”. You should choose a broker based on your trading strategies, your experience or trading conditions in your countries. 95% of beginners will lose their money, so you should aim to maximize your experience and minimize your loss.
- Standards beginners should look for to find perfect brokers
As I have explained in section 2, the targets of beginners for the early stage should be learning and minimize their losses. Thus, they should look for these standards to find perfect brokers for beginners, ranked from 1 to 6:
- Low deposit requirements.
- Small trading lot requirements.
- Good local support.
- Trusted brokers.
- Good training and coaching programs.
Expert traders take a strong care about brokers’ credit, trading cost and brokers’ quotes quality. However, it is different in the case of beginners because they only deposit small funds so the risk of getting cheated is minimum here. In this stage, brokers only want to nurture them so they will give beginner traders the best trading conditions. I strongly suggest that you should deposit less than $100 in this early stage (3 months) because you do not need to care about the trading cost if you only trade a small amount of money.
Why small trading lot is so important?
I hate repeating the fact that “95% of beginners will lose” but I hope it can help you keep your feet on the ground. At the early stage, you should open positions as small as possible. The amount of the standard lot is 100,000 USD. It is too much but there are some brokers such as XM that have Micro accounts which allow you to open positions as small as 0.0001 Lot USD. Exness and FBS also have Cent accounts that accept the minimum lot trade to be 0.0001 Lot USD.
When you trade with Micro and Cent accounts, you can pay for a whole month of practicing for just 10% and you can also withdraw your winnings. Moreover, there are no minimum deposit requirements for these accounts so you can deposit as low or high as you want.
Why is “Easy” considered to be important for beginners?
Not only Forex itself but also the trading system is complicated. Therefore, simplifying everything should be a good strategy for beginners.
Some brokers’ trading systems are very complicated so I would advise beginners to:
– Choose the easiest brokers
– Trade by web trade or web terminal first then trade MT4/MT5
– Choose easy payment methods such as Visa or MasterCard.
Good local support is essential for beginners
By saying local support here I mean there must be supports in your languages from the brokers. Forex trading is very complex for beginners so local supports should be necessary. I myself faced a lot of problems when starting forex trading such as login, 3D security of Credit Card or installing MT4 and I think those problems are common for beginners like you so it can save you a lot of time and effort with local support.
Experts consider trusted broker is the most important but it is only fifth in the ranking for beginners. Obviously, we must always trade with trusted brokers but in the case of beginners, they only deposit a maximum of 10 USD so it is highly unlikely that any brokers will cheat them. Therefore, they can trade with any brokers as long as it is easy and convenient. When you reach a point where you think you have enough experiences and knowledge then you should change to trusted brokers.
Good training and coaching programs
There are some brokers that have weekly or monthly training sessions for their clients. These brokers are the one that you should look for. However, most of them may ask you to deposit a lot of money but do not do it unless they are on the list of trusted forex brokers 2018.
You can register an account and deposit a little money to learn more about forex trading and then change to better brokers after the training courses.
- 3 best forex brokers for beginners
Exness and XM are two of the top biggest forex brokers, so they are trusted brokers. XM is a perfect brokers for beginners because it allows you to open smaller positions (0.00001 lot USD). They also provide a lot of training programs.
Exness is the largest retail forex broker in the world. They have Cent account that allows small positions as 0.0001 USD. Moreover, their advantages over other brokers are good support and payment system. FBS also has Cent account and good support as well as payment systems. However, they only provide good services in countries where their offices are located. Most of their offices are in Southeast Asian countries such as Indonesia, Thailand, and Vietnam.
- Should beginners practice through demo contest?
Most of us think that beginners should practice through demo contests but all the demo contest winners are professional traders. I did a bit of research on demo contest winners and found out that most of the winners are from China, Thailand or Indonesia. Their profit rates are over 10,000%. It means that most of them used robot trading to win demo contests.
Beginners are not expected to get a high-profit rate like them, so do not dream that you can win those demo contests. They are just a waste of time. It can even have some negative impacts on your trading strategy because the demo contest trading strategy is ignoring risks and focusing on profit which is normally against the normal trading strategy.
- Should beginners get welcome bonuses?
It is good if your brokers offer you welcome bonus but if your brokers do not offer that, it is still got because welcome bonuses are generally not easy to get even when you win. It is easy to apply for welcome bonuses but it is very difficult to withdraw. These brokers often require you to meet the conditions before withdrawing such as reaching the number of Lots depositing and trading. These conditions often make you lose your money before even meet the requirements.
- Some suggestions for Beginners:
– You should trade Micro or Cent account.
– You should not deposit more than $100 in the first month of trading.
– You should learn risk management
– If you are offered to deposit 10,000 USD in return for a very high-profit rate, do not fall for that. It is easy to get that profit rate but if there is a high profit, there are always risks that go with it. I have met a lot of cases like this when I work for a big broker. They might win for a few months or years but they will lose everything eventually.
– You should not use robot trading. If someone offers you a trading robot deal and ensure your profit rate to go up to hundreds percent monthly, do not take it. Only use robot trading if you are experts in forex trading because experts know how to customize these robots to follow their trading strategies and they have to monitor and adjust them frequently. There is no such robot that can win forever. You should manually trade until you are experienced enough to seek for the help of automation tools for parts of your trading processes.