Well begun is half done!
Too many traders start out by choosing a Broker that does not adequately suit their trading style/needs and as we all know, small margins can play a big part when trading FX.
To assist traders with this often difficult choice we have outlined 5 key points for any new or experienced trader to take into account when choosing their Broker.
1. Ignore bonuses and special attraction campaigns – these are setup so you must meet unrealistic targets to withdraw the bonus amount. Brokers will offer a bonus so you can trade with higher margin, thus increasing your risk of realizing larger losses at a quicker rate. Bonuses are not in your best interest, if they were Brokers would not be offering them.
2. Ignore the hype – It takes about 30 seconds of research to see that every Broker is world renowned, the best at what they do and a multi-award winner. These are nothing more than marketing gimmicks to try and attract traders through flashy statements and pure bravado! Focus on the facts from your own research and not all the well written testimonials which adorn a Brokers website.
3. Focus on your trading needs – Traders should do their own research to ensure that the Broker with whom they are opening an account is a good match for their trading. When trading every penny counts so you should be doing your utmost to ensure that your Broker has the kind of execution and product offering that will adequately suit your trading needs. If you are a news trader then execution during these volatile periods is key, a narrow spread will do little if you cannot enter the market due to constant re-quotes.
4. Demo does not equal Live – We often see many traders claiming their strategy is bulletproof and they have made 500% return in 1 month, only to then deliver the killer line which would turn the strongest of stomachs, it was on a Demo account!!! Demo is true to its name as it is only a demonstration, it is not true reflection of a Live environment and nothing in a Demo environment should be taken as such, whether it be your trading strategy or the execution you receive, once in a real Live trading environment it is very different in relation to both your trading and the execution which you receive. Demo Servers are almost always setup and left on complete automation, they are not an accurate replication of a Live environment. The spreads may be the same but we can guarantee you that the execution will not be. Our Advice: Micro/Mini trading account to test a Brokers actual execution.
5. Do more research – We cannot stress this enough, research is vital when choosing a Broker! Too often we speak with traders who deposited money with an unregulated Broker from the Seychelles who, to no great surprise, one day picked up and left with their money. The internet is full of forums and reviews which should help you in your quest for the right Broker. As research goes it key that you look into your Brokers background, regulation, execution and do make sure you read the Legal Documentation as it contains a lot of relevant information in relation to your Brokers offering and your own trading rights.
If after following the above you are still stuck then feel free to get in touch via email or the comment section below and we will do our best to help you on your way!!