This can be answered poorly in general, because choosing the right Forex broker is a very individual thing. Some brokers only offer trading platforms for foreign exchange, while others also offer trading in stocks or futures. Depending on the size and scope of one’s portfolio, the broker should be chosen appropriately.
A good trading broker is subject to the Federal Financial Supervisory Authority, so that invested capital is also relatively safe. Nevertheless, before opening an account, you should always read the T&Cs at your leisure to learn more about the company’s deposit protection. Fees, customer service and product variety are other factors that play an important role when choosing a broker. Especially for forex beginners, the phone support can help with technical questions or problems with the software. If a mistake creeps in while trading, a good and fast support is even worth real money.
Forex trading is handled by most brokers using their own software. To find out how well you can handle the software offered, it may be worthwhile to set up a demo account. In the case of real trading, it can prove to be expensive if the right button still has to be searched for when action is needed. A demo account is also a good way for all somewhat inexperienced traders to get used to the forex market. It is quite different from other financial markets. With many brokers, demo accounts can be easily converted into real money accounts, and rarely a new account needs to be opened, which is not complicated either.
It is also necessary to distinguish between non-dealing desk brokers and dealing desk brokers, also called market makers. The former receive the rate at which their clients can trade via the interbank market and the partner banks involved. Each bank provides its own rate, from which the broker can then select the most favorable and offer it to its customers. Dealing desk brokers do not execute their trades on the interbank market, but compile their own rates for currency pairs. They bring buyers and sellers together or are there to hedge the client. The rates of dealing desk brokers may differ significantly from the rates of the interbank market. Forex brokers on the Internet are for the most part non-dealing desk brokers.
