Opening An
Account

You can learn a lot about your forex broker the moment you open an account. With some brokers, the process seems almost a little too easy: a choice of username, a password, a valid email and the world of finance is your oyster! With others there appears to be no end to the information the broker requires you to provide before letting you enter your first trade.

Whatever the case, knowing what to expect when opening an account with a forex broker is essential if you wish to avoid scams and protect your privacy.

With today’s evolved online sign up forms, opening a trading account has never been easier. Whereas in the past you had to at least provide the basic details of your email, username and password to open an account, some brokers have even moved on past that to enable you to sign up with your Facebook, Twitter or G+ accounts instantaneously.

Having said that, don’t be fooled by the apparently miraculous ease of signing up. Just because you technically now have an account with the broker doesn’t mean that you can actually do anything with it.

Most brokers will have you complete more detailed questionnaires and provide documentation before you can fund your account or use it for trading. Sometimes you will be prompted to “complete your profile” or “verify your account” in order to provide complimentary information, or pass a suitability test depending on your broker’s regulatory obligations.

In fact, it seems preferable to complete a detailed questionnaire and sign up than to have to go through multiple hurdles that eventually accomplish the same goal – getting to know you as a client. However, beware of brokers who are too nosey – asking questions pertaining to subjects that have nothing to do with trading might mean that the broker is after information that they can then sell to third party advertisers.

Once you’ve completed your account info, you will most likely be asked to provide documentation that will prove you are who you say you are. This is an important step in the sign-up process and you should have no qualms about complying with your broker’s request, as brokers are obligated by law to prevent money laundering, credit card theft and identity fraud.

You will be asked to send or upload color scans of the documents in question. Make sure that the scans are clear and legible and that no relevant details are obscured or cut out of the image.

Sometimes you will also be asked to verify your phone number in order to facilitate communication with customer service, or to enable secure login. Most of the time this will be done via text message, but some brokers simply do this with a phone call.

Not all brokers ask you to verify your account before funding it. Some allow you to deposit up until a certain amount, others allow you to deposit with certain payment methods only (e.g. e-wallets, which already have ID verification measures in place like PayPal). Some allow you to fund the account for a certain period of time before your account is blocked from further deposits.

Whichever the case, when you are funding your account, you should always look out for a secure page sign-in to your browser to make sure that the broker is using sufficient measures to keep your payment information safe.

You should also insist on receiving a digital receipt whenever you make a transaction, so you can have proof of depositing funds in your account, just in case.

If you haven’t been asked for documentation up until this stage, this is where you will absolutely be required to provide the necessary proofs, as no respectable broker will part with funds unless they know exactly to whom they’re going.

Putting aside however long it takes for you to complete the necessary verification process, most brokers will have a pending period before processing your transaction. Since every transaction costs the broker money, they prefer to give clients a window in case they choose to change their mind and keep their money in their balance, in order to avoid unnecessary processing costs.

After the pending period, the time it takes for your withdrawal to go through depends largely on the payment method. Keep in mind that online payment methods (e-wallets, online credit cards) are always quicker than traditional offline methods (credit cards, wire transfer), and are likely to incur less fees.

Once you’ve got your account all set up and verified, it’s time to get in touch with your account manager. If you haven’t been contacted by one yet, make sure to call support and ask about how to connect with one as soon as possible.

It’s important to have not just your account manager’s contact details, but also their work schedule, as that may impact the hours during which you’ll want to trade.

Once your account manager is assigned, make sure to clarify how much you want them to be involved in your trading activity, e.g. when you want to be contacted, what kind of events, news, trends and instruments interest you, etc. Establishing clear guidelines for communication will facilitate your relationship and allow you to get the most out of the service.