How novice traders can make informed decisions when choosing a broker in Saudi Arabia

Financial trading has greatly grown in popularity in Saudi Arabia, with forex, stock, and commodities traders taking to the market to safeguard and grow their wealth in the country. 

However, choosing the right brokerage firm can be difficult, especially for complete beginners. 

For this reason, inexperienced traders may be wondering how they can narrow down their search and find the best brokerage firm for their financial objectives. 

Saudi Arabia is home to dozens of FX brokers based both locally and internationally that offer currency pairs, CFDs, energies, and metals. 

The best online FX brokers in Saudi Arabia are typically licensed by the DFSA in the UAE, as well as internationally. 

What to look for when choosing a brokerage firm in Saudi Arabia

As a beginner trader, you will need a few important criteria to compare Saudi brokerage firms and choose the best possible option for your financial needs and goals. 

Trading platforms

Perhaps one of the most important aspects of financial trading, a functioning platform with plenty of useful features can make or break your experience with a particular firm.

For forex traders, having access to MetaTrader 4 and 5 is essential and oftentimes non-negotiable when it comes to the trading platforms offered by the brokerage firms of their choice. 

However, many forex brokers do offer MT4 and MT5, but with different additional features, such as technical indicators and charting options. In some cases, brokers will offer a third option for those who are less familiar with the MetaTrader platforms. 

Perks and features

Brokerage firms often offer auxiliary features to their clients, such as economic calendars, newsletters, and educational resources, which are especially important for beginner traders. 

Comparing these features can help you choose the right firm that will provide the technical resources that you will need on your trading journey.

Typically, such features are offered free of charge. In certain cases, firms may offer third-party services at discounted prices, such as data analytics and advanced charting software for experienced traders. 

Spreads and other fees

Forex spreads are the primary fees charged by brokerage firms, as opposed to commissions and other trading fees. 

Different spreads apply to different currency pairs and other instruments, which is why it is important for traders to compare the fees offered by the brokers they are considering opening an account with.

While the spreads are typically quite low, especially on major pairs, they can nonetheless eat into the already slim profit margins that are characteristic of the forex market. 

Traders in Saudi Arabia have access to some of the most successful FX brokers in the world, which means that their spreads are competitive. 

Some brokers may also charge an inactivity fee, which applies after an account has been dormant for months and typically involves a small monthly charge. 

Spreads and fees have a direct impact on the trader’s bottom line, which greatly increases the need for a firm with transparent and low fees. 

Regulations and licenses

While FX brokerage firms are not subject to as much regulatory scrutiny as stockbrokers, they are nonetheless required to obtain a license in order to operate, which can be a lengthy process. 

In general, the more reputable licenses a broker holds, the more advanced their safety features tend to be. 

In the case of Saudi Arabia, most brokers operating in the country are licensed in the UAE, while the firms themselves are also regulated in Cyprus, the UK, Australia, and more. 

Tradable instruments

Last but not least, each brokerage in Saudi Arabia will offer a variety of instruments, such as: currency pairs, CFDs, commodities, crypto, etc.

The best option is to choose the broker with the most diverse selection of assets, which allows for more creative trading strategies and lends itself to greater flexibility. 

Traders in Saudi Arabia will be particularly interested in energies, such as oil and gas securities.

Luckily, most online brokers offer Crude oil, Brent oil, and natural gas for investment and trading. 

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