How to choose a reliable broker to trade
Trading is a high-risk activity, and to obtain results, it is necessary, in addition to a theoretical and practical preparation, to have a good profitable strategy. Unfortunately, this is not enough if you are trading with one of the many scam brokers on the web. Trading with a non-settlement broker has the mathematical certainty of losing your money. It is, therefore, necessary to stay away and always and only operate with reliable Forex brokers. Continue reading this article to learn how to choose a reliable Broker.
Here are the right tips for choosing a safe Forex broker to trade. A regulated broker to offer trading services, but which in the same way gives the possibility to use professional trading platforms, offers rapid support, and provides useful trading tools.
Always choose regulated brokers
To choose a reliable Broker, you must first select only Brokers that are regulated by FCA, MIFID, or CySEC.
FCA
It is another very important company for Brokers who offer trading services. The Financial Conduct Authority (FCA), which replaced the old FSA in the United Kingdom, is a very strict body that operates independently of any government or banking institution and is therefore considered to be a very strict company. Its main purpose is to control brokers by supervising financial markets, especially those that offer financial services in the United Kingdom.
FCA authorized brokers have a little bit more in terms of security, as they have passed stricter checks. A comprehensive analysis of the list of FCA Forex regulated brokers will allow you to choose the best option from the best.
MIFID
You have probably also heard of MIFID for banking products. It is a community directive that everyone must respect, from banks to brokers who offer online trading.
MIFID is an acronym for “Markets in Financial Instruments Directive,” a law approved by the European Commission back in 2004. The MIFID directive is very stringent and has the aim of creating a global and regulated financial market within the European Union.
With these regulations, all investors are protected regardless of their level of preparation. The aim of the directive is to control all companies by ensuring free competition and transparency in the investment sector.
CySEC
It is instead the company whose acronym stands for “Cyprus Securities and Exchange Commission” and is an independent entity that deals with regulating European Brokers and is based in Cyprus.
In 2004 the state of Cyprus entered the EU, and many financial companies have since opened their headquarters there. CySEC is a company that is actively part of MIFID, and the regulated brokers based in Cyprus operate according to European regulations.
Many brokers, also unregulated, are based in Cyprus, before entering the EU, in fact: the state was to be considered a country on the blacklist and, therefore, a tax haven. Today, however, regulated brokers are based in Cyprus and operate according to European regulations.
Parameters for choosing the best Broker
After understanding how to choose a reliable Broker, you need to explain which one is the most suitable for your needs. To choose well, you need to understand what level of competence you have. There are, in fact, traders who love to operate with more flexible tools and integrate with various platforms.
Beyond personal preferences, then it is necessary to evaluate the markets on which you intend to operate. There are brokers more suitable for trading on currencies, others on stock markets, others on cryptocurrencies. In any case, beginners and professionals can undoubtedly use the same trading platforms. In this regard, we always recommend trying the services offered by Brokers through demo accounts before negotiating with real money. But let’s see what the Brokers do:
Spreads and commissions: convenience
Brokers with high costs affect earnings. First of all, the spreads, i.e., the ask/bid difference between the prices, must be as low as possible. A Broker earns mainly on that for every single operation, and therefore it is a cost for the trader. When choosing the Broker, you must evaluate this feature. It must be said that some brokers do not apply them, but they are completely free.
Easy trading platforms
Very often, we found ourselves faced with very difficult to use trading software. For this reason, we recommend everyone to try the platform, which should be fast and easy to use. The graphical interface must also be professional and relaxing, but above all, usable, i.e., ensuring that you can find what you need in a few steps. A tip, MetaTrader 4, is the most used trading platform, and for this, you can find excellent professional trading indicators that can help your business.
Technical assistance
A final aspect not to be overlooked is that of technical support. Since we are mainly dealing with companies that are based abroad and are international, make sure that they have assistance in your country. The Broker must be easy to contact both by email and by phone; if the online support methods are not clear on the site, then there is something wrong.
Conclusion
Before making a hasty decision, you should carefully familiarize yourself with the circumstances of the case and verify your suspicions. A trusted broker will not turn into a fraud after revoking a license. However, you should not start cooperating with a company without regulation. A trader must correctly approach the issue of his financial security because the efficiency of his work in the international market depends on this in many respects.