With the online forex trading boom, brokers and their trading platforms have had to adapt quickly. Today, the average online brokerage offers far more advanced conditions for traders than one did ten years ago. Combined with overall improvements in online services, this has created fierce competition among trading providers. Here are 5 features for every trader to help you choose the right broker and platform.
This, of course, is good for traders. More competition among the businesses with which they trade means, on average, better conditions. However, there are many brokers that, either due to a lack of care or being stuck in the past, don’t meet modern standards.
And simply put, traders shouldn’t settle for this. Since the industry has gone as far as it has, there are many options for traders in almost all parts of the world. Finding a broker with quality conditions can make or break your trading performance, so it’s far less optimal to stick with a sub-par brokerage.
In this article, we will discuss what we consider the bare minimum for forex brokers today. Five things that, regardless of the type or specialisation of the CFD broker, traders should have access to.
5 features for every trader, solid security
Trader safety comes first
First and foremost, traders need to stay safe. There are many brokers, especially those that promise overwhelmingly good conditions, that aren’t actual operations but malicious entities that steal the funds deposited with them.
Proven track record for traders
As such, forex brokers need to prove that they don’t belong to that group. They don’t prove this on the service itself, but rather through actions in their cumulative years of operating. This is a key component in ensuring you have a positive experience when using an online brokerage.
Security can be hard to measure for traders
The somewhat difficult thing about this is that, unlike trading conditions, for instance, security doesn’t have an objective measure. This means we can’t simply say look for this and that and you’ll be fine. However, there are multiple indications that a forex broker operates well.
Spotting red flags for traders
The easiest ones to spot are a clear website and regulation. Brokers who make false promises often do so vaguely and avoid showing their precise conditions. So, you may have a forex broker claim to have thousands of assets available, without an asset list anywhere on the website, or low pricing without showing their spreads or fees.
Check regulation information for traders
Regulation information, on the other hand, is most commonly found in a website’s footer. Remember to always cross-check the reference number with the regulatory body’s database. Regulation doesn’t guarantee security, but it is a huge step in the right direction.
Professional reviews help traders
Next, there are professional outlet reviews. These can give traders a good idea of brokerage security, as they often go more in-depth than inexperienced traders can. The people writing these reviews inspect hundreds of brokers, so they have a better eye than the average person.
Learn from other traders
Finally, there are the opinions of other traders who use the forex broker. Various websites like Trustpilot compile these and give an average rating. It’s smart to look at the comments themselves as well, since these can sometimes be a better indication than just the rating, which can be fudged.
Good platform for traders one of the 5 Features
Trading platforms are a major part of any trader’s routine. Even if you’re a fundamental trader who inspects news for most of your analysis, you need to place your trades and set your stops, and you’re more than likely going to need to do some chart analysis and employ some indicators. Needless to say, all of this happens inside a trading platform.
Now, a good platform may differ from trader to trader. In general, MetaTrader 4 is a safe choice, but if you’re an algo trader, for instance, you may need MetaTrader 5’s more powerful capabilities.
Some dislike both of these common tools and may look for something else entirely. However, it’s vital to ensure that your CFD broker provides the right trading software for your specific needs. Otherwise, it may be difficult to perform well, you may get stressed and fatigued more easily, and all of this may lead to bad trading habits like burnout developing.
Additionally, traders who don’t find their trading process a chore are far less likely to burn out. Altogether, the right trading platform can significantly help traders optimise their performance both practically through features and psychologically through better emotional regulation.
Good pricing an important feature for traders
The next thing traders should look for is good pricing. This is the thing that most directly impacts trading performance, and can outright invalidate certain trading strategies.
Of course, this also depends on your trading style. For instance, a scalper may find that even a brokerage with relatively low flat fees can’t support their trading style. Conversely, a trader who places a small amount of large orders may find that moderate flat fees perform better for them than a spread-based structure.
A large part of this comes down to accounts. ECN/STP accounts generally tend to have a structure with fees, while fixed/floating accounts often use spreads. A CFD broker that has both, of course, is a great option, since it can increase trader flexibility and let them execute multiple different strategies depending on the circumstances.
In essence, with suboptimal pricing, it may be difficult to make any progress as a trader. As such, all the other qualities, be they functional or for convenience’s sake, would fall through.
Trading Instrument Variety
Next on the list is the variety of trading instruments. Brokers today often offer hundreds of assets across multiple classes, so there’s really no need to settle if a key instrument class, like shares or commodities, for instance, is missing entirely.
As such, it’s vital for brokers to at least provide the bare minimum in terms of assets. This means covering all major asset classes (forex, commodities, indices, stocks), and having a decent number of options within each. Of course, since we’re talking about forex, the selection there is the most notable. All major and minor pairs are a must, and at least some exotics are welcome and quite common.
It’s true that most traders find their niche and end up sticking with a handful of assets or categories. However, markets can fluctuate widely in unforeseen circumstances, and it’s always better to have options often.
It can be argued that a skilled trader can perform well with any instrument, but in today’s online brokerage industry, that’s a compromise you don’t have to make.
Trader needs quality support – 5 features for every trader
Rounding off our list of key conditions is support. Mistakes happen, sometimes software behaves in unpredictable ways, and these situations can be extremely frustrating for traders. In the worst cases, they aren’t resolved, and traders get rightfully embittered by the CFD broker’s action, potentially turning them away from trading altogether.
These problems can happen during any part of the day, so a support team that has long operating hours is crucial. 24 hours on workdays is the industry standard, and most quality brokers will happily provide that.
Additionally, it’s crucial that the reply times aren’t long. Even if a team operates 24/5, it’s worth nothing if traders are waiting multiple days for their replies.
The final component of quality support is having multiple ways to reach the team. Sometimes, for short queries, a live chat option will be the most convenient way of resolving the issue at hand, while at other times, an email may be needed to provide more extensive documentation.
Sadly, there are few ways to verify this other than using a broker. However, many support teams will respond to non-clients, so be sure to test the waters before you decide on a CFD broker.
Disclaimer: This information is not considered investment advice or an investment recommendation, but instead a marketing communication.
