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How do I Choose an Online Trading Broker?

Stock-Markets / Learn to Trade Jun 09, 2021 - 03:01 PM GMT

By: Sumeet_Manhas


The Internet is full of stories of people who have become successful Forex brokers without even financial experience and education. Undoubtedly, it is tempting for every person to try themselves in Forex trading to understand if it is the niche where they can make money. If you are one of them, one of the first steps is the selection of a Forex broker and a platform. When it comes to the choice of a broker, there are some crucial aspects to take into consideration.

What does a Trader Face When Choosing a Broker?

When a trader decides to make money in the market, they need an intermediary that will provide access to this market, that is, a broker. It is a difficult task for both novice and experienced traders because the abundance of promises of easy enrichment makes novice traders overemotional.

What guides a trader when choosing a broker

Every novice trader is sure that he/she is guided by one’s own mind, that is, intellect. Traders or future traders usually analyse:

  1. how many people are already trading with a broker — the more, the more reliable a broker is;
  2. how many people a broker has successfully trained;
  3. how many years this broker has been on the market, and so on.

And it may seem strange, but a novice trader manages to find positive answers to all these questions. Then, a future trader will switch on an internal calculator to calculate how long it will take to double/ triple a $100 deposit by opening a trading account with this broker and buy a flat/car/trip… You can congratulate yourself — you are on the hook.

Why do people fall for the broker’s hook?

The answer is simple. There is no logic in pseudo-logical promises of quick money on which one so wants to rely. And our subconscious mind knows this very well. However, the rational mind receives thoughtful information, and we force ourselves to believe in these promises. Therefore, it is crucial to rely on not only bright ads and internal feelings but statistics and unbiased information.

  1. The safety of the deposited funds depends on the reliability of the broker. It is no secret that today there are enough dubious offices and one-day firms on the Internet. Therefore, it is crucial to trust your finances to only reputable companies with experience and well-known names in the industry.
  2. The best forex brokers like Forextime offer clients various investment options that best suit their trading strategy. For example, a good intermediary has a whole line of trading accounts of different types: standard, ECN, NDD, swap-free accounts, etc. It is best to partner with a company that provides multiple trading options.
  3. The honesty and quality of the company. Forex quotes from different brokers may differ. The closer the quotes are to the market ones, the easier it is for a trader to make a profit. Dishonest brokers often resort to such a trick: in a period of high volatility, they artificially close part of the client’s trades using stop loss, referring to the fact that at some point, the price has reached this level. But upon careful examination, it becomes noticeable that the chart of other brokers did not reach the critical level. It can be either a technical failure or a deliberate deception. Regardless of the reason, it is unlikely to make a profit with such a broker.

Useful Tips for Choosing a Forex Broker

It is not easy to choose a Forex broker since there are many intermediary companies today. But a beginner trader from the United Kingdom or any other country may not have enough experience for a correct assessment. In this regard, it is better to follow these tips:

  1. Evaluate how clear and informative the company’s website is. Ideally, the beginner should be provided with all the conditions, including training and exchange of experience with professional traders. Companies should offer market analytics and expert opinions to their clients. Another plus if the site has leverage, advisors, and robots. It is not necessary to use this — the main thing is to check how seriously the intermediary carries out trading.
  2. Make sure that there are no serious and fundamental complaints against the broker. Accusations of massive fraud, unreasonable blocking, and poor server performance should alert you.
  3. It is advisable to avoid brokers that promise their clients generous profits effortlessly. High income in trading is possible only for those clients who independently analyse the market, study, and verify each transaction. Promises of effortless, risk-free profit have nothing to do with the reality of trading in the Forex market.

Make your choice reasonable because only a reliable broker can become your key to making profits in the future.

By Sumeet Manhas

© 2021 Copyright Sumeet Manhas - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

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