The last two decades have seen an explosion in the popularity of online trading. Sites like eToro have made it possible for common people to invest their money in the market, potentially increasing their wealth.
But how does it all work?
It’s actually quite easy. All someone needs to become a trader is some money available, a computer, and a broker!
And if you’re wondering what a broker is and why you do need one, we are going to walk you step by step on how to choose one and make sure it is the best for you.
Your broker is an intermediary that offers you the tools and the necessary access to buy and sell in the market. They provide traders with a platform that is the door into the online trading world.
Each broker is different in terms of what they offer, the assets to trade, their platform, commissions and fees, and general features and tools. That is why choosing your broker carefully is not only the first step to start trading, but the most important one.
Online brokers: why do you need one?
Most people interested in investing their money in the market have the ultimate goal of increasing their wealth. The traditional way to do it, giving your money to a broker and having them investing it as they see fit, it’s also a possibility.
However, the traditional brokerage doesn’t allow for any control from the investor. Trades nowadays want to know where their money is being invested, and why.
Online brokers have adapted to the new needs of investors and offer more of an intermediary service, allowing traders to make their own deals in the market.
Brokers now offer 24-hour access and they let traders have all the control of their accounts and finances.
If you are interested in trading in the market and want to have it all under control, as well as have the tools that let you buy or sell even from your phone, you need an online broker.
How to choose an online broker?
There are a variety of aspects to consider when choosing an online broker. Having clear expectations and objectives will definitely help narrow down the options of online brokers best suited for you.
To make sure you are choosing the right broker for you, check the following:
Regulations. Is the broker regulated? Is it registered with the appropriate authorities?
This is of utter importance since it guarantees your safety and that of your money. A regulated broker has to comply with the rules in place and respect the traders’ rights.
Fees. Make sure their fees are reasonable and that is something you can afford.
Services, features, and offered tools. Whatever your level of expertise is in the market, you will probably be interested in educational and research tools that will maximize your chances of making a profit in the market.
Many brokers offer detailed research tools that traders can use to make wiser investments. Beginner traders may also benefit from educational tools and demo accounts that will let them earn more practice.
How to avoid scams when choosing an online broker?
When it comes to online trading there are many scams and fraudulent operations lurking around. Sadly, with every chance there is to make money, fraudsters and criminals will be there trying to make a slice.
We are not going to list all the possible scams, but we are going to mention that when choosing a broker, double-checking, or triple-checking, their regulatory registrations are of utter importance for your future career as an online trader.