Selecting a brokerage is a crucial part of financial trading, especially in Forex and Cryptos. It is much easier to become a profitable trader when you have a reliable broker who is not there to rob you of your hard-earned money and is assisting you instead. Reliable brokers are incentivized to form long-term relationships with successful traders, ensuring a steady flow of income from spreads and commissions. Here is a guide to important factors to consider when selecting a reliable brokerage for your trading career.
Regulated Forex brokers like Axiory are audited frequently and have a track record of being honest and transparent with their clients and activities, which is absolutely critical in Forex trading. The broker you select must be regulated to ensure you are dealing with a reliable entity. More regulators overseeing your broker is better for your safety and legitimacy for the broker. Safety is closely connected with regulations. Some regulators are more reputable than others. For example, the UK’s FCA, ASIC, and USA CFTC are more reliable than offshore regulators like Saint Vincent and Grenadines. Surely, some offshore regulators like Cyprus CySEC are reliable and robust.
The trading platform is a software that allows traders to connect with markets and open trading positions. Popular advanced platforms like MetaTrader 4 and 5 are offered by the majority of regulated brokers and help traders analyze markets with various tools such as technical indicators. MT4 and MT5 also support automated trading robots or Expert Advisors also known as EAs. Other platforms like cTrader and TradingView are also very popular and robust trading software, allowing traders to conduct complex technical analyses and support multiple order and chart types. All the platforms mentioned above are available for mobile devices, including both Android and iOS, which is very important for traders. So, if your broker is very well-regulated and offers any of these platforms, you are in a good position to start trading.
Now, the broker might be regulated and offer advanced platforms, but if it does not provide your preferred trading instrument, it might not be a good idea to sign up for its account. Forex brokers offer currency pairs, indices, commodities, cryptos, and sometimes even stocks. Despite this, many new brokers might lack asset diversity, making it harder to find your preferred instrument.
Spreads and Fees, Account Types
When it comes to actually trading the instruments offered by your broker, spreads and trading commissions play a crucial role in ensuring profitability. Depending on your trade strategy, lower spreads might be a priority over lower commissions. Scalpers, who rely on very tiny price movements, typically need lower spreads and will pay commissions, while swing traders and trend traders who sometimes are days in an open position will choose lower commissions. This is why many reliable brokers started to offer several account types, ensuring every trader can find a suitable account. ECN or zero spread accounts are targeted at scalpers with low spreads and trading commissions, and standard accounts are designed for trend trading and swing trading purposes. Your selected broker might not offer many account types, but if its account offers you favorable conditions, then even one account type is fine.
If you have a low budget, then brokers with lower minimum deposit requirements will be more attractive, while the leverage ensures you can control substantial buying power even with a low deposit. Regulated brokers are compliant with the laws of the regulator they are overseen by, and often regulators have strict leverage restrictions. In the EU the maximum leverage for Forex is typically limited to 1:20 while it might be 1:500 and even higher for offshore regulators.
Customer Support and Education
If you are a beginner then trading purses and webinars will be important and ensure your broker has some kind of trading course to learn to trade. However, support is influential for every trader, and it is a must that your broker offers excellent customer support with well-trained personnel. The most significant customer support channel is a live chat that allows you to almost instantly contact the broker almost instantly and resolve any issue quickly. This is very critical in financial trading, where you might face some unique challenges. Another important support option is a hotline channel that allows you to call the broker and close trading positions in case you experience internet connection issues.