It is essential to have an extensive knowledge about the broker you choose, especially when you’re about to open a real trade account. The choice of right broker crucially depends on many factors, including trade costs and your personal trading strategy.
A broker is a financial organization which gives you the opportunity to trade financial instruments, including equities, currencies and primary commodities. It aids with purchasing and selling bids, coming from traders or liquidity providers.
What do you need to know to pick up a good broker?
You have to determine for yourself which broker is most suitable in your case. Your priorities may change with circumstances and time. The following information will help you understand what you need to pay attention to while choosing a broker.
The differences between brokers:
– Minimal deposit: the minimal sum of money you need on deposit to be able to bid;
– Broker’s fee: a broker receives a sum of money for being an intermediary in your trading deal. There can be two forms of fee – commission, and spread.
Spread is a deviation between the purchase price of an active and a price for which it’s been sold. A spread can be fixed and floating.
– The fixed spread stays the same and relies upon volatility;
– The floating spread can change during the day and is subject to the market situation.
If the broker accepts commission fee, the sum you’re going to pay does not hinge on a spread. In this case, the fee is paid for each trading deal performed with broker’s assistance.
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