The recent rise in accessible retail trading platforms has seen a concurrent increase in interest from ‘retail traders’, or individual amateurs with an active interest in making their own financial decisions regarding stocks and currencies.
The sheer variety of platforms available makes choosing the right one a difficult process, especially for forex; ill-designed platforms with poor functionality can actively lose investors money.
The following elements are key metrics by which a forex brokerage can be measured, giving you more confidence in choosing your trading platform.
Broker Pedigree
One of the foremost considerations you should make when picking a forex broker relates to reputation. A well-renowned brokerage company will attain a form of brand recognition, by virtue of their popularity amongst traders. By searching forex trading forums for recommendations, you can narrow down your options to tried-and-tested platforms with proven benefits to the end-user.
Trading awards are also a useful metric for this, as good trading platforms will be highly accoladed for their work. Brokers with little online presence or history can amount to a gamble of sorts, as their trading credentials can be an unknown quantity.
Clarity of Product
There are a number of ways in which an investor can interact with forex markets, and new investors can feel as though they have been plunged into the deep end when it comes to attempting to understand them.
With trading options like spread betting UK platforms seek to demystify the process, coaching new users through the principle and process, and ensuring greater understanding of leverage and risk as a result. Good platforms for those new to forex trading provide useful descriptions of functionality, allowing users to make discerning decisions regarding how to place their investments.
Trading clarity can also apply to the mechanisms of the broker itself. How much commission does it take from transactions? Are there any additional fees in the form of dormancy or overnight fees? How easy is it to withdraw funds? Can it offer any exclusive benefits to the user over other platforms?
Answering these questions will help you gain a clearer picture of the broker, and make a more informed decision regarding the security of your investments through the platform.
User Experience
Hand-in-hand with product clarity comes the quality of the user experience. Well-designed trading platforms can look different depending on their intended user, with more involved software potentially inscrutable to forex newcomers but also more comprehensive in sharing of data and analysis.
Simplified platforms to accommodate traders at the start of their journey might offer a slicker user interface (UI), with clearly labelled tools and data for ease of analysis.
Speed of Execution
One consideration is particularly crucial to trading success, especially with regard to more complex trading options: the speed at which the broker can execute an order.
A successful broker is one that can execute orders swiftly, as market volatility can see the desired buy or sell price disappear rapidly. A shift in price before an order is executed is described as ‘slippage’; slippage can cost dearly, depending on the scope and complexity of the transaction.
A reliable broker with a quick response time can mitigate the effects of slippage, and ensure more investment security over time.
