Opening an account with a broker allows investors to access markets to buy and sell currencies, stocks, bonds, ETFs or perhaps to carry out more advanced trading operations such as derivatives trading or forex transactions. It should be noted that nowadays also most online banks have integrated their offer with financial brokerage services. Therefore, when referring in a generic way to the figure of the broker, both traditional brokers and banks that offer online trading services to their customers are taken into consideration. Both offer instant access to the various exchanges and an online platform through which to mainly carry out transactions and hold financial instruments in the portfolio.
How to choose the best broker
Being a successful trader means making decisive and thoughtful decisions. One of the decisions you will make even before you start trading will be to choose a broker to use. Since this is an exceptionally important decision, it would at least be advisable to take some time and gather as much info as possible on the various different options that the financial industry makes available. For instance, Trade Horizon Review is a great source of information for this particular brokerage.
The consequences of choosing an unsuitable broker could cost you thousands of dollars in costs and fees. This can be avoided if you are able to define what you are looking for. It should be noted that there are many brokers on the market that are initially very similar to each other. In reality, each of them has characteristics and distinctive features that would make it more appropriate for one category of investors rather than another. It is for this reason that you should therefore take a step back and first outline your individual trader profile. What does it mean? First of all, it means framing essential factors such as one’s experience, preferences and goals.
Are you a novice investor or an advanced trader? Do you need to be supported by a consultant, or are you looking for an execution-only broker? In addition, would you need a training course and an educational service that will make you independent in the future when it comes to investing?
Habits and preferences
Which instruments and markets do you want to operate on? Do you want an easy-to-use platform or an advanced one? Some traders need the highest quality trading tools, such as highly sophisticated charting tools, news and real-time indicators; for others, such services may be expensive and unnecessary, particularly for those who are not familiar with trading tools or who do not need them due to their operation. It’s important to make sure you don’t spend too much on tools and services you don’t need.
Do you have a short-term investment horizon (day trader or scalper) or medium-long term? Do you have sufficient funds to trade or do you need to use a margin service that increases your exposure (leverage)?
Those who want to increase their exposure to risk and operate with leverage, will have to consider the interest expense deriving from the use of margins and the general conditions for holding leveraged positions overnight and managing the margin call.
Once you have well defined these personal requirements you will be able to move on to the analysis of the various brokers.