How to Hire a Great Broker (An Easy Guide)
If you’re new to the world of trading, on Forex or otherwise, you may be thinking about hiring a broker. Frankly, it’s a really good idea. While there are some investors who choose to go it alone, most people who have great success on the market have brokers, and if you’re new to trading, having one is pretty much essential. There’s no reason to go blindly into trading if you can utilize the experience and knowledge of a brokerage firm with tons of experience and know-how.
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If you’re wanting to hire a broker, you may be wondering how to best go about it. With so many brokerage firms all over the world competing for your business, how on earth do you choose, especially if you aren’t astute in the world of trading? We have a quick guide with a few tips to help you make an educated choice. You’ll be trading through a reputable broker in no time at all.
Comparing Brokers and Brokerage Firms
There are many brokerage firms out there competing for your business, so naturally you want to take the time to speak with a few and compare them before choosing. Each firm brings different things to the table, and it’s important to consider what your needs are, the goals you have for trading, etc. A good brokerage firm will ask you these questions as well - you’re both interviewing each other, basically.
Before settling on a broker, take the time to read reviews from other customers/clients who have worked with them. For instance, if you’re looking to do trading on the forex, check out forex trading reviews and look carefully for those reviews that illustrate how much experience and know-how a firm has with different types of trades in that particular market. You need a brokerage firm that has experience in the areas you’re interested in, as well as good marks for customer service, accessibility, and more.
Look at Commissions, Fees, Etc
For someone just starting out in the world of trading, you can easily be put off by what you feel is an unfair commission split. Don’t immediately count out a broker because of this - consider the larger implications. A broker is taking a chance, too, and if you don’t see a profit, neither do they. That isn’t to say you should agree to a hugely imbalanced commission split, but look at it fairly. Choosing a broker just because their commission split is slightly less than their competitor isn’t a good way for you to do business and it may come back to bite you later down the line.
A broker that offers you 100% commission may sound too good to be true, and that is true in some respects. Because often those same brokers are recouping that money through things like transaction fees, premiums and other subtle ways, and often those brokers don’t go the extra mile for you the way others would. Keep all this in mind. As with anything, you get what you pay for.
Social Media, Internet and Tech
Some brokers are “old school” in that they don’t have a big flashy online presence and prefer to do their trading the old fashioned way. And that’s fine! Flash and substance aren’t everything.
But if you’re looking for a way to keep up with real-time updates on the market, and want to make your bids online, through a website or app, and have a broker that constantly keeps track of these things for you, you want to choose a broker that has an online presence. If they have an app, even better. This makes trading so much easier.
A broker that has a strong online presence is likely to have reviews and client testimonials that you can review, as well.
Just make sure that your broker isn’t all flash and no substance, and that they are promoting what they can do for their clients, rather than a “brand”. What you’re looking for is a good balance of innovative tech, know-how and client loyalty.
Brokerage Firm Size/Team
Brokerage firms can range from one-person operations to entire teams and companies. It’s up to you which type you prefer, but mainly it depends on your needs and the amount of trading you plan to do. If you’re talking large trades and a great deal of money, hiring a company with many employees might just be your best bet. But for a “newbie” just starting out, likely you’re planning on beginning with smaller trades that don’t require a team of brokers to handle your trading.
Some beginners feel that doing business with a large, reputable firm is worth it, though, because it helps build your reputation as a trader. That’s up to you - we’re just saying that starting small is perfectly fine.
This falls under the umbrella of online presence in some cases, but it’s more than just that. You need your broker to be available to you, accessible and convenient.
You can choose a local broker, ensuring that you can meet in-person and talk about your trades. But in the case that you choose an out-of-state firm or even one that is in a different country, accessibility can simply mean that you’re able to always get in touch via phone or email when you need them. Making trades via a website or app is also a big one.
Make sure your broker is available to you in the ways you need them to be. It’s that simple.
This is the main one. The rest are just details.
Hiring a broker that has years of experience in the forex or other markets you wish to trade is in paramount. Sure, everyone has to start somewhere, but if you’re a beginner, now is not the time to take chances. You should cast your lot with a broker who has years of industry experience and will handle your trades with the care, experience and knowledge needed to see good returns. Look for brokers that have years of experience, good reviews, excellent rates of return and can answer all of your specific questions easily and with real knowledge. If you do this, you’ll see great trades.
Try these tips when hiring a broker and you’re guaranteed to be thrilled with the result. Happy trading!
CANDY TAI is a wife to David and mom of 5 with a degree in Communications. She's a native Texan (Hook 'Em Horns!) who's been making her home in the Kansas City metro area for nearly 15 years. She loves being able to shuffle her kids from their various sports activities, piano lessons, and school activities. She enjoys fashion, beauty, reality TV, and moviegoing.