With so many trading brokers to choose from, it can seem overwhelming for those who are looking for the best broker according to their individual requirements. The trading brokers review team have spent thousands of hours studying and analysing hundreds of online brokers in great detail. This experience has enabled us to understand some of the key factors to consider when choosing a trading broker.
In this guide we will explain what to look for and how you can choose a trading broker that has products and services which are suitable for your online trading needs. To discover more about online brokers that we have reviewed and rated, please see our trading broker reviews. If you do not have the time to read on, you may also consider checking out our best trading brokers.
A trading broker is an intermediary between you the trader and the markets that you are trading. They will usually provide you with an online trading platform so that you can connect to various global markets and trade instruments. The broker will allow clients who open a trading account with them to deposit funds for the purpose of buying and selling different assets. This is known as online trading where you are speculating on the fluctuating prices of various instruments. For more details, you may wish to read our guide on how to trade online. Brokers can also provide additional services such as trading tools, educational materials, PAMM accounts, social trading platforms, daily market analysis and more.
ASIC, BVI, CBI, FFAJ, JFSA, FSCA, IIROC, ADGM FRSA
Min $100 Deposit
FCA, CFTC, NFA, BaFin, FINMA, ASIC, FMA, MAS, FSA, FSCA, DFSA, JFSA, METI, MAFF
Min $250 Deposit
ASIC, FCA, DFSA, SCB, CySEC, BaFin, CMA
Min $200 Deposit
ASIC, CySEC, IFSC, DFSA
Min $5 Deposit
When you are considering and comparing different trading brokers with whom you plan to trade online with, there are numerous things to consider which can depend on variable factors such as your investment size, location, trading strategy, markets of interest and experience level. We will now look into some of the most important aspects to consider when you choose a trading broker.
When you trade online you are already putting you funds at risk by speculating on price movements throughout various global markets. It is important to minimise risks should anything go wrong with the broker that you have chosen to trade online with. Regulated brokerage firms can offer investors more protection than unregulated brokers can in a worst-case scenario. There is a reason why most experts and professionals would only ever open a trading account with a regulated broker. Not only is it important to look for a regulated broker but you should verify the brokers regulation is valid and up to date with the relevant regulatory authority. It is also important to consider the difference in standards between each regulatory authority as some are more lenient than others. Some of the most respected “tier one” regulators to look for are the Financial Conduct Authority (FCA), Australian Securities and Investments Commission (ASIC) and Cyprus Securities and Exchange Commission (CySEC).
You will find that each broker offers a range of different trading account types to suit the needs of various traders. They may have a choice of accounts that cater to specific levels of investment and experience levels. There can be different trade execution methods between the accounts and minimum requirements. Leverage may also be different as can the trading platforms, tools, asset classes and services that come with each account type. It is worth considering that there is an account which matches your investment size and has the features you trading strategy requires along with the brokerage services that you desire.
If there is a particular asset class, market or trading instruments that you would like to trade online, you should ensure that it is offered by the broker in question. Furthermore, it may be worth considering that if you plan to expand your portfolio in the future, the broker has a wide range of tradeable instruments. The main trading products to look out for include forex, stocks, commodities, precious metals, energies, cryptocurrencies and CFDs.
There are a few trading platforms that you will see provided by most brokers. One of the most popular by far is the MetaTrader platform. This platform is well known for its user-friendly interface, quick learning curve and vast array of built in tools. MetaTrader is use by millions of traders worldwide and freely available for desktop, web and mobile devices (iOS & Android). If you are already familiar with a specific trading platform or have one in mind, it would be worth making sure that it is available with your chosen broker. If you are a beginner and looking for a new trading platform, MetaTrader can be a good place to start. There is an abundance of online resources which can help you get used to using the platform including tutorial videos and detailed platform guides. The trading brokers review team have compiled a list of our best MetaTrader brokers.
Each broker will have different trading fees and other additional fees. Some brokers charge a commission in addition to providing you with raw spreads direct from the liquidity providers (LPs) whereas others will not charge you a commission but instead mark-up the spreads which acts as fee. There are account deposit and withdrawal fees to consider. Some brokers can charge fees greater than others which can add up if you frequently make transactions on your trading account.
Although some brokers say they do not charge any fees, third parties such as banks and payment processors may charge a fee. You should also be aware of the swap/rollover fees that brokers can charge for holding a position overnight. Other broker fees worth considering are account inactivity fees, platform fees, education fees, PAMM fees, etc. As broker fees can vary and change, it is imperative to ensure that you check and understand all of the latest information that can affect your online trading costs.
Most online trading brokers will support bank transfer and credit/debit card funding. If you would prefer to use an alternative option then you may wish to choose a broker that offers your preferred payment method. Popular choices amongst brokers and traders include online payment processors such as Skrill, Neteller and PayPal.
Having educational materials readily available can help traders of all experience levels to improve their trading skills and knowledge. A broker that has a more complete brokerage service will tend to offer educational resources and trading academy’s which can include trading video tutorials, trading guides, quizzes, webinars and other useful learning resources. If you are a new to online trading, it may be wise to make sure that the broker has some educational materials and that the support team is on hand to assist you as and when you need them. You may also wish to take a look at our best brokers for beginners.
For the average retail trader, the trading platforms provided by the broker are likely to have more than enough trading tools for their day trading needs. In addition to this, platforms such as MetaTrader have a large amount of free and paid tools which can be acquired online. However, if you require broker specific tools such as market sentiment data and expert market analysis, you should ensure that the broker offers this. Some professional traders may also need a broker who supports FIX API trading, offers PAMM accounts or social trading platforms. Again, ensure that when you choose a trading broker you take this into consideration.
There are brokers located all over the globe and operating in different time zones. If you plan to require support from your broker on a regular basis, it may be worth considering what time they offer support and in what time zone they are located. If customer support is only available during office hours and they are 8 hours ahead of you, it may take a while for you to get a response. Thankfully, many of the largest brokers either operate 24/5 or have offices located throughout the globe. At a minimum, the broker should have a telephone number and email contact, ideally with an online chat option as this can be a more convenient method of contact for many traders.
Now you hopefully have an understanding of what to look for when choosing a trading broker, you may be considering opening a trading account with one. You can take a look at our best trading brokers to get some inspiration and choose a broker or read our guide on how to open a trading broker account for a detailed explanation of the next steps.