Perhaps the more stressful work before doing trading is finding a good broker. Your broker should be reliable and transparent of their rules. There are some basic tips that you can follow to find out your suitable traders.
Find out what YOU want: Different traders need different types of brokers. For example, if you are a day trader, you might need an ECN broker. They have tight spread but you need to give them some commission. When you are trading as a day trader, your trades will have small moves. You need to think about your account size and whether the broker and lot size that matches your account.
Research, research, and research: In the market, you’ll find many brokers. Many of them claim different guarantees. But you should never believe what you have been shown. Google your preferable brokers, compare their benefits and policies. It’s very important to have a clear idea of the broker’s policies.
Test with demo accounts: You can test your broker with a demo account. You can try with virtual money. While you are trading, you need to keep an eye on three things:
Whenever you are placing an order, it should be placed instantly.
Your spread should be as tight as possible.
Your trading platform is stable and not crashing all the time.
You should run the test for several weeks. After that, start trading with real money but with a small amount. For example, you want to trade with $10000. But to test the broker, you should not start with more than $1000. While this process, try to talk with their customer service to know whether they are real. After that, withdraw some funds to know their withdrawal policy. These might cost you some money, but it’s worth to know whether you can easily withdraw your funds.
Avoid “BONUS”: Get one thing straight, nothing comes free. When a broker is saying “open $10000 and get $2000 free”, that’s actually a trap for you.
Some broker companies hide the bonus policy or create problems when you try to withdraw the funds.
So, whenever you are depositing funds, make sure you give them proper instruction that you don’t want to have any bonuses.
Don’t believe online reviews every time: We often seek neutral reviews on different things online. But these reviews can be manipulated too. Find a website where you can see both positive and negative comments. These can help you to identify who are suitable brokers for you.
Personally, my first priority would be to ensure the broker is properly regulated by a reputable regulatory authority.
If a broker is “regulated” by some offshore address on an offshore “island” on the other side of nowhere, there is probably a good reason for this - and that reason is not likely to be in your favour as their client.
You are spot on but I would add that it is also handy to know if the broker is a dealing desk or no dealing desk broker. Especially for newbie traders as most of the time newbies are trading with very small accounts that are highly leveraged.
Whilst it is probably true that most new trading accounts start with a small balance, the access to high leverage is being progressively restricted by the most reputable regulatory authorities such as ESMA and FCA.
I guess there likely is a difference between DD and NDD, but I don’t think it is wise to assume this is a main reason why new traders tend to lose their money. The reasons for this fact (around 80% of traders, according to brokers’ reportings) are mostly due to the the traders’ own mistakes - as is widely and constantly discussed on this forum.
Usually, when suspicions are aroused that a broker has deliberately caused a trader to lose money, the broker in question is one of these offshore, dubiously regulated setups.
It surely must always be better in the long run to select a broker who is one of the bigger names in the industry and properly regulated and who is more interested in having a stable client base that is both profitable and long term rather than a constant turnover of newbies that put in a USD100 deposit and loses it tomorrow - and adversely reflects in the statistics that they are obliged to publish on their internet pages?
FX brokers offer flexible trading conditions so I think we have to look at it at different angle, I mean main problem with all fx brokers is conflict of interest, you have to read their ToS to find if they act as a counterparty to your trades or send them to LP. It is an important point the rest are just nuances
All this is good, but sometimes offshore broker with high leverage is all you need in reality for whatever reason being done. I do hope it will really make it better for anything. How else do you need to compete with that much ? I do not want.