If you’re looking to start trading or upgrade your broker then there’s a few things you should watch out for. Thankfully there are several respectable reviewing organizations that investigate brokers on a daily bases, but if you wish to do your own research, here are some questions you should be asking.
What do highly rated brokers give?
Firstly, a good broker will be regulated. This means an organization or governing body will endorse the broker. To be endorsed there are several strict criteria that are designed to catch or deter scam brokers. Cyprus Securities and Exchange Commission (CySec) is one of the strictest and most trustworthy, but Australian Securities and Investments Commission (ASIC), Financial Conduct Authority (FCA), Securities & Exchange Commission (SEC), and Commodity Futures Trading Commission (CFTC) are all strong indicators of a professional and trustworthy broker. All good brokers have segregated funds, which means your money is kept in a different account from the broker’s holdings. If the unthinkable happens and the broker falls, your money is safe and separate. This is a requirement from most governing institutions.
Another must for any broker to be considered a good broker is the educational materials and services available for the traders. The best of the best don’t just give eBooks and a few tutorials, they give one-on-one Account Managers who guide and protect new traders. For the more seasoned traders, a webinar is a must, which not only widens a traders understanding of the markets, it also lets traders test new limits and take their trading to the next level.
If you find a broker that seems interesting, browse around their sight for about ten minutes. Don’t read anything specific or bother with the details just yet. Simply snoop around to see exactly how much content is available, and how much effort went into the designing and building of the site. This might sound naïve, but actually the quality of the website can indicate just how much attention to detail a company requires from its employees.
Lastly, go to Google and type in the name of the broker and add the word “scam”. Practically every broker has an accusation or two, but if there are endless reviews and warnings, give the broker a wide berth.
Remember, with reward comes risk, so go with the best broker you can find, take it slow, study the industry whenever you can, and be patient.