Tuesday, 30 June 2015
Some points to keep an eye on in order to find a good brokerage!
People often ask me what's a good broker, well to be honnest it depends on your own trading style.
If you are a scalper obviously you'll need to have a tight spread and fast order execution, if you're using a grid it's important that the broker allows you to use your strategy.
Here are a few points to keep in mind when you're searching for a good broker:
1. Spreads - Many brokers claim to have low spreads where in fact they don't. Don't bother to open a demo account and check the spreads. Open a live account but don't deposit any money. Check the spreads in real time and by how much they open during economic figures, especially the Non-Farm Payrolls.
2. Margin requirements - Each broker may have different margin requirements for different instruments. Check this upfront with the broker.
3. Leverage - Check the leverage to make sure it meets your needs
4. Minimum distance - Check the minimum distance you can have form the market for stops, entry orders and take profits. Important!
5. Margin call - Will you receive an alert when you are in a margin call? (relevant if you leverage too much)
6. Margin stop out - By what % level will you get stopped out due to lack of margin? (relevant if you leverage too much)
7. Negative balance policy - We all know what happened to many brokers because of the SNB and EURCHF. Check the brokers policy if your balance is negative.
8. Withdrawals time frame how long does it take to withdraw?
9. Withdrawal fees - How much do you need to pay if at all for withdrawals?