We have repeatedly told that the activity in Forex is carried out through brokers who provide leverage, do work with orders, etc. However, the eternal question: how to choose a reliable broker, if their current number is simply huge? The answer is obvious: choose a bank as a broker.
Advantages of the bank before the dealing company:
- reliability. The bank performs many functions, so it makes no sense to register the structure only to deceive the trader. The cost of a banking license is much more expensive than the registration of a dealing company, which means it makes sense for the bank to conduct not only honest, but professional activities;
- reputation. Nonprofessionalism, incorrectness in relation to the client – and already everywhere will be filled with negative reviews in relation to the bank, which will affect its other activities;
- control. Tell me, who is checking deeply the activity of dealing companies? But the banks are annually audited, which guarantees the transparency of the financial institution.
As you can see, banks have significant odds as brokers. If we are talking about European banks, we would advise to pay attention to the Swiss and German brokers, because they keep the client secret, which means you will not have any questions with the tax authorities.
Let’s not hide, banks have some drawbacks. First, dealing centers are ready to make substantial concessions, for example, increasing leverage for the sake of attracting customers. Banks in this regard are more conservative and will not take another risk. Another important point: personnel. Large banks prefer targeting directly banking operations, therefore the instrument for conducting trading operations with banks may be limited. For example, the bank will clearly indicate with which currency pairs it works and with the use of which orders.
In the post-Soviet space, large broker banks can be called VTB-Bank, Alfa-Bank, Ukrgasbank. The average leverage with which banks work is 1: 100 – 1: 200. The minimum deposit depends on the package of selected services (from $ 100 or $ 500). When choosing the minimum deposit, the client gets the opportunity to work only with 10-12 currency pairs, with a larger deposit – with more than 22 currency pairs. Some banks offer work only with the limit and stop orders, some have more choices. The main trading terminals: Metatrader 4 and 5.
But, as we have already said, despite the slight differences between them, there is a slight difference in the conditions of the banks, and for someone it may be important.
So, we hope that we have slightly lifted the veil in relation to brokerage companies. Many traders are accustomed to familiar names, because they do not even think that someone else can offer services in Forex.