Forex trading has become commonplace thanks to the appearance of online trading platforms. More and more people in South Africa and all over the world have already understood that regular jobs in offices will not bring them the desired level of income, while getting new skills and obtaining new knowledge in the field of forex trading might help them get a source of a steady income and provide for themselves for many years to come.
But this popularisation of trading has led to a negative consequence – too many 'scammy' sites have appeared. And a novice trader might not be able to recognise a really decent platform among hundreds of available options on the market. Therefore, it is crucial not only to look for reliable sources of information like Nadex reviews on forex brokers, but also know how to determine a really decent broker. We have collected the most outstanding criteria that will help you determine that a particular broker deserves your attention.
Just like any business, a brokerage company needs to be licensed by a jurisdiction responsible for a particular market – in this case, the South African market. Look for an FSCA licence on the site of a broker you consider trading with. If there are none, check out the available licences and make sure that brokers with these licences work legally in the market. Never skip this step since the legality of the operation is the prerequisite for your protection and the security of the finances you will deposit in your account.
Next, you need to get ready for a long process of reading. It is essential to find as much information about a particular broker as you can. Not all the reviews you will find on the internet can really be written by traders. If you read only a few comments, you will not be able to tell the difference. But approaching this matter responsibly, reading hundreds of reviews, you will even notice some repetitive comments, which is a sign that these are fakes. Unscrupulous companies post negative reviews about their competitors and too many positive ones about themselves.
Also, trust reliable reviewing platforms that post information collected and analysed by market experts. They not only review sites, but also sign up and use the services of the brokers they are reviewing. Compared to feedback from regular users, professional reviews will always contain more details and even practical recommendations.
Find out for how many years a broker has been working. It is best of all if a company has at least five years of experience. New companies are regularly appearing, however, it is necessary to be extremely wary considering them. Beginning traders are not recommended to start trading with a newly established broker. Gain more experience and you will be able to understand if a particular intermediary deserves your attention.
Initially, you might not even consider using numerous tools, but remember that you will gain experience and understand the market better. As a result, you will want to explore the possibilities of the market. Hence, a wide range of trading tools will come in handy. And it is better to select a broker that will provide you with them, instead of looking for a new intermediary after a while.
Among effective tools, copy trading is a possibility to set the automatic repetition of actions taken by experienced and successful traders. Their trades will be copied within the settings you foresee. For this, this trader will receive a commission.
However, be careful with leverage
Leverage is a possibility to use the financial resources of a broker to get access to trading with more money at stake. It might seem attractive. However, remember that the losses will also increase in the case of failure. Beginning traders should not resort to using leverage. Consider this possibility only when you get more experience and become more confident in your skills and ability to predict the outcome of trading deals.
Meanwhile, 'stop loss' and 'take profit' are useful, regardless of your trading experience. Therefore, do not ignore these tools and learn to use them as soon as you choose a broker and sign up.
To be a trader, it is unnecessary to have a financial education or background. However, there is a lot you will need to learn and master. And it is convenient when a broker provides educational materials on its site:
- A blog;
- YouTube channel; and
- Online and even offline courses, etc.
Regardless of the form, the possibility to gain new knowledge is extremely important. And when a broker provides this information along with recommendations on how to use certain tools, you will be able to use this theory in practice since all of these tools are provided by this broker.
To master the art of trading, it is crucial to have a possibility to practice. And a demo account provides traders with such a possibility. Use tools and try to forecast the results of deals, analyse your mistakes and define successful strategies. All this is feasible without putting your money at stake. The next step might be using cent accounts. You will be trading with real money, however, the amounts will be too low to regret in the case of loss. Reliable brokers provide their clients with these possibilities in terms of their educational programmes.
It is complicated to provide an objective response to this question since every trader has their own style and approach. Besides, your expectations from a broker might be different. We have told you how to determine a reliable broker. Pre-select several candidates and decides which one is the best for you.
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