There is no dearth of online brokers today, but before you venture into trading and choose a broker you must know which financial instruments to trade. Based on the type of financial instrument such stock, CFDs, forex and cryptocurrencies that you plan to trade, you can pick a broker that fulfills the below mentioned 5 criteria. Continue reading to discover what those 5 criteria for choosing an online broker are.
1. Regulated and Licensed: One of the first criteria for selecting a broker is to pick one that emphasizes on safety. It is important that you choose a broker that is both licensed and regulated as there are a number of scam websites/brokers who indulge in fraudulent practice and elope with the money deposited by the traders. Remember, brokers are required to meet specific conditions and criteria to acquire licensing. Also, if they violate these rules then they automatically end up losing their license as well as great deal of money. Some of the most reputed regulatory bodies that provide licensing to brokers around the globe include ASIC in Australia), FCA in United Kingdom, CySEC in Cyprus Europe and BaFin in Germany and Europe. In addition to the above regulators, you can also opt for brokers who have been duly recognized by The Financial Commission, which is an independent regulator and the NFA in the United States.
2. Trading Conditions: Traders must also choose the right broker based on the type of trading conditions they provide. Typically, your trader should provide you with the option of setting up a demo trading account. This is helpful in understanding what trading in live market conditions in all about. Apart from this, your ideal broker should offer different leverage options and low spreads or commissions. Also, make sure that your trader does not charge any hidden fee.
3. Trading Platform: No matter what you do, always select a broker that offers an easy to access trading platform. Your broker should provide an efficient and user-friendly trading platform, which makes trading both simple and convenient. Aside to this, the broker should also offer different account types or options to traders, allowing them to trade as per their comfort and ability to trade. You must also determine the minimum amount that traders need to deposit to initiate live trading and also check the broker’s deposit & withdrawal options. Typically, your broker should offer bank wire transfer and other electronic payment options.
4. Easily Accessible: Aside to security for traders, your broker should also be easily accessible through different modes of contact. A reputed broker makes it convenient for you to connect with them through chat, phone and email on a 24 hours basis. Also, make sure that the broker you opt for offers support in multiple languages, particularly English.
5. Educational Resources: A growing number of online brokers today are providing educational resources in the form of tutorials, videos, webinars and one on one coaching. Therefore, make sure that you pick an online broker that provides you with relevant and useful trading materials, which you can further use for improving your trading knowledge and skills.
Arnold Webb received a Masters Degree in Computer Science from Harvard University. Arnold currently is a full-time researcher and trader in the cryptocurrency industry. Arnold contributes content to CryptoCelebrities.co, The Bitcoin Magazine and several other publications.