If you need to buy a new car or want to go out for a meal, how do you decide which supplier/restaurant to choose?
There’s likely to be several variables feeding into your decision. In the end, you will probably opt for a vehicle or meal that suits your tastes, is perceived as value for money, and is local or easy to source.
When it comes to trading, several factors go into deciding which broker to use, because each has its unique platform to offer.
But here comes a word of caution: always choose your broker wisely. If you don’t, you could be accessing a below-par product, you could be paying out extortionate fees, and you might be missing out on training materials that could take your trading to the next level.
So here are the key factors to consider when selecting your next trading broker:
Commodities, assets &instruments
By the time you come to start your trading career, you presumably have an idea of what it is you want to trade – be it forex, stocks and ETFs, precious metals, indices, crypto, and so on.
It’s worth noting that not all brokers offer comprehensive coverage of these categories across the board, while some brokers specialize in specific commodities and instruments.
So, once you have decided what it is you want to trade, you will be able to narrow your broker search down based upon this requirement.
The bottom line of trading is that you want to make as much money as possible while paying out as little as you can in fees, charges, and commission.
As far as fees are concerned, will you be charged for entering or closing a position? Is there an account opening fee? Will you be charged a monthly or annual fee? Are there overnight fees?
Other charges can be an issue too, such as fees levied on deposits and withdrawals, and you might also have to pay commission on your trades.
All of the above comes before we have even considered leverage and margins, so clearly, there is plenty to think about under the ‘fees and charges’ umbrella.
Newcomers to trading tend to find the MetaTrader 4 platform the easiest to use and understand.
But as you become more advanced, other options – be it MT5 or even the broker’s proprietary software – may become more appealing.
As you embark on your trading journey, you may want to access a number of support tools. These can range from real-time updates on pricing to more advanced charting tools that enable you to make more informed trading decisions.
In trading, if you stand still, you will get left behind, and so you must continue to educate yourself on the industry and the latest economic news around the world.
The best trading brokers offer some educational channels – be it tuition videos, live trading demos, or a personalized account manager – to help you improve.
It’s imperative that any trading brokers you consider are regulated, licensed, and trustworthy – because you wouldn’t trust a charlatan to look after your money, would you?
Look out for symbols of trust – is the broker a member of the Financial Industry Regulatory Authority (FINRA) or the Securities Investor Protection Corporation (SIPC)? Do they have financial protection and anti-fraud measures in place?
Also, you should consider how the broker protects your money. Is it kept in a separate account with a recognized financial institution? Don’t take the risk of trading with a broker that does not have these essential provisions in place.