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Selecting the Right Broker for You Pt. IIPOTENTIAL SCR*W FACTOR 1. Must have a centralised price feed to insure reliability of quote. 1a. There should be no delays, re-quotes, rejections or manipulations of price. 2. Check fine print of contract for any unfair rules they may impose upon you as a trader. 3. Are there conditions in the broker agreement under which profits can be made void and if yes, what are they? 3a. Price latency arbitrage. 3b. Minimum holding time for trades. 3c. Other? 4. Is there an obvious stop loss hunting practise? 5. Must have a clear policy on margin calls. 5a. How much time is there to deposit extra capital in case of a margin call? 5b. Will they close all open positions when the equity in your margin account falls below the required maintenance level? 5c. Or will they close only enough positions to increase the equity, but not all open positions? EXECUTION ENVIRONMENT 1. Must have a mobile app with a user-friendly interface, compatible with your mobile device. 2. Must have a pc app with a user-friendly interface, compatible with your pc. 3. Must have a stable and secure execution environment. 3a. Privacy protection policy. 3b. Data encryption. 3c. Secure authentication protocols. 3d. Backup systems and contingency plans. 4. Does it have a link into a charting platform to facilitate chart trading? CUSTOMER SERVICE 1. Must have a “trade services team” to respond to inquiries / complaints / appeals regarding trades you make. 2. Must have the possibility for immediate access by phone to flatten all of your positions and cancel all orders resting in the market, in case of an emergency. 3. Questions must be handled timely and correctly by customer service. 3a. Is there an immediate channel of communication? 3b. Can you contact them by phone, email and chat? 3c. What hours are they open? Finally, a list of items I personally find irrelevant and do not include in my decision, but I put them here for completeness, as other traders may find them relevant. Does the broker offer: -A newsfeed? -A managed account? -A charting package? -A forum to facilitate a trading community? -Proprietary indicators / analytical tools? -Market analysis? -Education in the form of tutorials, guides, webinars, ebooks or trading courses? -Trade ideas, Signals, EA´s, bots? -A specific language other than English you are looking for? -Start bonuses and promotions? See also "Selecting the Right Broker for You Pt. I". See the link under Related Ideas.
Education
by JazzForex
4
Selecting the Right Broker for You Pt. IBROKER RISK PROFILE 1. Must be regulated by a regulatory authority. 2. Must have a (relatively) clean regulatory record. 3. Must have they been in business for several years. 4. Must have a segregated bank account for holding retail client funds. 5. Must be a member of a compensation fund, which compensates losses (up to a certain amount) in case of insolvency. 6. Must have a negative balance protection policy. 7. Must fulfil capitalization requirements set by the government. 8. Must be a publically traded company. 9. Must have a solid security check in case of withdrawal of capital by customers. SERVICE PROFILE 1. Must provide an account in the base currency of your choosing. 2. Must be a Non Dealing Desk (NDD) broker. 3. Which currency pairs do they offer? 4. What other instruments do they offer for trading (metals, oil, gold, indices, etc)? 5. Do they allow hedging? 6. Do they allow scalping? 7. Do they offer a mini or micro account? 8. Must offer a free demo account to get familiar with their execution environment. 9. Do they have price alerts (by email, SMS or push notification)? 10. What leverage do they provide? 10a. Can I select the leverage I want per trade? 10b. Or is the leverage automatically set based on equity? QUALITY OF SERVICE 1. Speed and ease of deposit and withdrawal of capital. 1a. Do any broker fees apply? 2. Speed and ease to open a live account. 3. What is the policy and track record on fills? 4. Does the broker offer guaranteed stops? 4a. Do they guarantee an absolute limit on the potential loss (read: the full risk of slippage is for the broker)? 4b. Is there an extra cost involved (like an additional spread)? 4c. What conditions hold for these guaranteed stops (can I change them or delete them for open trades)? COSTS OF SERVICE 1. Are the service costs competitive? 1a. Fixed or variable spreads? 1b. How much do spreads widen during news events? 1c. Commissions? 2. What is the roll over during the week and during the weekend? 2a. Are these rates applied to the account weekly or daily? 3. Are there inactivity fees? 4. Do they offer interest on the entire account? To be continued in "Selecting the Right Broker for You Pt. II". See the link under Related Ideas.
Education
by JazzForex
6