Independent ratings and reviews: how to choose a broker in 2021

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Trading is supposed to be speculative transactions with various exchange-traded assets. A distinctive feature of trading is a high level of risk, so always consider your financial capabilities and do not invest those amounts that you cannot theoretically lose.

The effectiveness of trading depends on a large variety of factors. The probability of profit and profit margin, for example, directly depends on the level of trader’s skills, his knowledge and experience, the tools he uses to analyze the market and determine trend directions, his talent after all.

Financial security and safety of the deposit depend on the chosen trading strategy, trader’s personal traits and emotions, skills in capital and risk management and so on. Another important factor that affects the result of transactions and the safety of money is the broker.

Why do you need a broker?

A broker is needed to participate in stock speculation or investment. This is an intermediary who executes trader’s orders and takes a commission for their services. An ordinary trader does not have independent access to the exchange, since he doesn’t have the necessary capital and licenses.

How different brokers differ

First, look at the terms of cooperation with traders. Different companies work with different exchanges. In addition, the conditions for calculating commissions and other fees may differ.

Secondly, brokers differ in the geographical place of registration of the organization and obtaining licenses. It is advisable that the broker is registered in your country and licensed from the state central bank or financial regulator in your country.

Thirdly, brokers differ in the presented tools for analytics and trading. Many companies offer popular software, and some brokers work with their own trading terminals.

Beware of ‘investment scammers’, people who are selling ‘magic strategies’ and scammers who pretend to be brokers, but in practice take your money, manipulate exchange signals, deliberately delay the execution of orders, or simply block accounts without explanation. Some ‘so called brokers’ don’t even have access to exchange. 

If the trader’s money in this situation is kept by the offshore company, then it is almost impossible to resolve the issue through the court.

How to choose a broker?

To begin with, you must study the information placed on the public domain – on the official websites of companies, in official registers, on online media sites. Be sure to check public blacklists and lists of Forex or stock scammers. 

You can also use services with independent broker ratings. There are two types of rating resources. The first type is international agencies that collect information about large licensed brokers with thousands of active traders and big money turnover. The second type is websites on the Internet that publish reviews and ratings about any brokers, even just-registered. An example of such material and service with different reviews is FXCM broker reviews.

Spend some time looking for adequate reviews, free of ads and emotions, and read expert reviews with up-to-date comparisons of different brokerage companies.

Disclaimer: This content does not necessarily represent the views of IWB.

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