Online trading has become a world phenomenon which doesn’t look like it is going to stop any time soon.
Started more than 10 years ago to become more relevant on financial markets, this activity boomed to the highest level during the pandemic. For obvious reasons, the fact that many people had to stay at home, all at the same time and (more or less) across all over the world, facilitated this way of making your capitals at work for you directly from your computer.
What you must have to start it is a smart device (i.e. a tablet, smartphone, PC etc) connected to the internet and a trading account provided by a broker to access to a trading platform.
While trading platforms run basically on most devices, even the oldest computers, the choice of your future broker is one, if not the most important choice you have to make before starting your new trading journey. This, and the importance of a proper education on financial subjects, are going to be our focus for this article in order to give you all the information you need to know before you start.
Regulation & Regulators
To start with the right foot on you must choose regulated brokers only. By doing so, you’ll avoid most scams and leave your capitals in the hands of a legitimate brokerage service.
In order to check if you are going to open a trading account with a regulated broker, you must double check both the license number present on the broker site and the regulator main page. By doing so, you will be 100% sure that there isn’t anything fishy about your future brokerage service.
With all that being said, you should keep in mind that every regulator has one or more area of influence. To give you a proper guide regarding top regulators across the world, here you can find a list with the top regulators divided for nation and area of influence.
Area of influence – European Territories
- AFA – Andorran Financial Authority (Andorra)
- BaFin – Bundesanstalt für Finanzdienstleistungsaufsicht (Germany)
- BCSM – Central Bank of San Marino (San Marino)
- CBR – Central Bank of Russia (Russia)
- CONSOB – Commissione Nazionale per le Società e la Borsa (Italy)
- CYSEC – Cyprus Securities and Exchange Commission (Cyprus)
- DFSA – Danish Financial Supervisory Authority (Denmark)
- ESMA – European Securities and Markets Authority (European Union)
- FCA – Financial Conduct Authority (United Kingdom)
- FIN-FSA – Finnish Financial Supervisory Authority (Finland)
- FINMA – Swiss Financial Market Supervisory Authority (Switzerland)
- FMA – Financial Market Authority (Austria)
- FMA – Financial Market Authority (Liechtenstein)
- FSMA – Financial Services and Markets Authority (Belgium)
- GFSC – Gibraltar Financial Services Commission (Gibraltar)
Area of influence – Americas
- BMA – Bermuda Monetary Authority (Bermuda)
- BVI – British Virgin Islands Financial Services Commission (British Virgin Islands)
- CIMA – Cayman Islands Monetary Authority (Cayman Islands)
- CSA – Canadian Securities Administrators (Canada)
- CVM – Comissão de Valores Mobiliários (Brazil)
- FinCEN – Financial Crimes Enforcement Network (USA)
- FSA – Financial Service Authority (St. Vincent & The Grenadines)
- GIFSA – Grenada International Financial Services Authority (Grenada)
- IFSC – International Financial Services Commission (Belize)
- IIROC – Investment Industry Regulatory Organization of Canada (Canada)
- SEC – Securities & Exchange Commission (USA)
- SFSA – Seychelles Financial Services Authority (Seychelles)
Area of influence – Asia & Oceania
- ASIC – Australian Securities and Investments Commission (Australia)
- CSRC – China Securities Regulatory Commission (China)
- FSC – Financial Services Commission (South Korea)
- HKMA – Hong Kong Monetary Authority (Hong Kong)
- ISA – Israel Securities Authority (Israel)
- JFSA – Financial Services Agency (Japan)
- MAS – Monetary Authority of Singapore (Singapore)
- SEBI – Securities and Exchange Board of India (India)
- SESC – Securities and Exchange Surveillance Commission (Japan)
- SFC – Hong Kong Securities and Futures Commission (Hong Kong)
With all that being said, we must consider that choosing a non-regulated broker is a secure way towards a scam. No matter what they will offer, the fact that a non-regulated broker doesn’t have to comply with a given regulation imposed by a regulator will give them the chance of scamming you without any interference.
Education: Why It Is So Important?
Education, as everything in life, is the most important thing you have to keep in mind if you want to have success in online trading.
Thanks to modern technology, we have many ways to educate ourselves which are way cheaper and more immediate than in the past. Which is why many brokers have started to implement new forms of education tools in order to educate their traders, and (mostly) without adding any costs or fee for it.
Among the most useful and modern educational tools offered by top brokers today we remember:
- Demo Accounts: this is the most easy and safe way to learn how online trading works directly by practicing it on a trading platform (here you see the trading platforms most popular in Italy according to Finaria). Furthermore, due to the fact that you don’t have to deposit real money to use it thanks to the usage of virtual balance, there are zero risks in this form of practice.
- E-books: a modern and practical way to carry around hundreds of books on financial subjects directly in your smart device where you want and reading them when you want it. Usually, a broker will give you also the possibility of downloading them in order to read every ebook you want offline.
- Economic Calendar: knowing when and where important financial events and dates are going to happen is extremely important to anticipate market fluctuations. These economic calendars can be also customized by adding specific topics or asset-related focus (i.e. an annual shareholder meeting).
- Webinars: this form o f seminars conducted over the internet became extremely popular after the stay-at-home orders to fight the pandemic, but even before this event they’ve always been popular among traders and brokers’ education tools. That is why many brokers have implemented this feature and given the possibility of participating in it for free to all their traders.
Disclaimer: This content does not necessarily represent the views of IWB.