Before the Trading Idea – How to Choose the Right Broker?
Introduction
Choosing the right broker can be the difference between a successful and modest trader. You should choose reputed and Regulated brokers to protect your profits. Choosing a good broker can be easy if you read broker reviews at That Sucks or Forex Peace Army , but the following tips can help with the same:
Do Background Research
Doing background research is important before choosing a good broker. You should start by taking referrals from your family and friends who have availed of the services of brokers. Do a comprehensive web search and carefully read the reviews of different brokers. This will give you a better understanding of what to expect from them. Avoid brokers who have more negative reviews. You can also consider getting a free consultation from brokers to assess their suitability.
Check the Fees and Minimum Balance
You should thoroughly check the fees and minimum balance requirements before finalizing a broker. Some brokers ask you to put a minimum balance to open and maintain a trading amount with them. This minimum balance can be between $500-$1000. You should also check if there are any monthly or annual account maintenance fees and whether they can be waived off. The charges levied by a broker should be reasonable and transparent. It is better to avoid brokers who levy hidden charges that erode your returns. You should not always prefer the broker with the lowest charges. Brokers who provide high-quality and reliable service at a reasonable rate should be preferred.
Trading platforms
A trading platform is your interface between the broker and the market. It is a crucial consideration for choosing a good broker. Some broker platforms are more user-friendly and intuitive than others. The best way to assess the suitability of a trading platform is to test it. You should prefer brokers who allow you to open a free trial account. Most reputed brokers offer a free trial account to their customers. If you are not satisfied with the trial account and its features, then better not spend money subscribing to the platform. Check how smoothly the platform works and how seamlessly the rates are updated.
If you are a new trader, then look for brokers that offer lots of rich resources and tutorials on trading. It will help to learn the art of trading gradually and become a successful trader in the long run.
Security Offered
Online trading can be dangerous if proper security measures are not in place. Check the technology used by the broker to keep your account and personal information secure. Some of the common security measures include two-factor authorization, answering security questions, receiving OTP on phone and email, etc. You should check if the broker conducts a regular audit of its trading platforms and security measures by a third-party. Most reputed brokers conduct regular third-party audits which establish the credibility of their platform and security. Before finalizing the broker, check if they have any history of selling customer information to third parties like marketers. Such brokers should be strictly avoided.