It is important to do your due diligence on the brokers, and that still doesn’t guarantee your money will be safe or the quality of service and support will be there for you. We have taken every step possible to review the brokers we recommend, and the best step would probably be to spread your capital over 2 or 3 brokers, and connect them to copy your trades or trade different strategies in each one.
The following are critical things we look at when deciding whether or not to recommend a broker.
- Security
The first thing we consider is the credibility of the broker. After all, if we are handing over thousands of dollars, we want to be as certain as possible the broker is legit and we will get it back. Unfortunately, we have had bad experiences in the past, and even if the broker is regulated there are no guarantees, but by limiting our choice to the following list of regulatory bodies we will be as safe as possible.
- United States:National Futures Association (NFA) and Commodity Futures Trading Commission (CFTC)
- United Kingdom:Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA)
- Australia:Australian Securities and Investment Commission (ASIC)
- Switzerland:Swiss Federal Banking Commission (SFBC)
- Germany:Bundesanstalt für Finanzdienstleistungsaufsicht (BaFIN)
- France:Autorité des Marchés Financiers (AMF)
- Canada:Investment Information Regulatory Organization of Canada (IIROC)
- Transaction Costs & Bonuses
Brokers offer a variety of account types which have various transactions costs. No matter what kind of trader you are, you will have to pay them one way or another. In this regard cheaper isn’t necessarily better! Going for the cheapest broker, more often than not, means they have hidden the cost somewhere and you will end up paying for it through reliability, speed or execution which also goes into determining your profitability.
Many brokers offer a bonus in the form of free money! Yeah! However, nothing good in life is free and the brokers are there to get your money one way or another. No, they are not your friend! They are there to do whatever they can to part you with your capital as quickly as possible. One way is through their bonus offers where you need to make a large number of trades sometimes in a limited time in order to UNLOCK the bonus. Most bonuses are optional! LOL
We recommend that you decline any bonuses offered, and focus on making money through your discipline and hard work, and leave the bonus chasing to those less informed.
- Deposit and Withdrawal
You should be able to deposit funds and withdraw your profits hassle-free. Brokers should have no reason to make it hard for you to withdraw, except when you’ve accepted that bonus, because the only reason they hold your money is to facilitate your trades. They make the market to ensure trades are matched up and settled fast.
- Trading Platform
As we trade online, we need a broker with a user friendly platform, and one that has our 5pm NY close charts if you are on the Blue or Orange teams. MT4 has worked well for us, but there are other options as well and we look for brokers who cater to the online technician. We don’t need education from brokers, robots for hire, news feeds, any broker trade recommendations, etc. We only need clean charts with an easy to use trade execution system and little to no down time.
- Execution
Just another way for brokers to make money off of traders is through what is called “slippage”. This is where the price you want to enter or exit a trade is different from the price you get. Ok, as execution hasn’t reached light speed yet there will be slippage of a few pippets if the market is moving, but it shouldn’t consistently reach a pip or more unless you are trading right after the NFP announcement or any big news event.
- Customer Support
Nobody is perfect, and we want a broker that we can easily contact when a problem arises. How they deal with technical issues is just as important as any other aspect of the business relationship. Do they try to solve problems in our favor (awesome!) Or do we have to constantly fight with their bots and only get canned responses (run away fast!). Do they approach the relationship as well as they did when they opened the account?
Whether you decide to use one our recommended brokers or search for your own, we hope these critical points will help guide you as much as we have demanded it before adding a broker to our list.
We are constantly looking for quality brokers and with your help we can develop a list of our most trusted (or garbage). That saves us a lot of time and allows us put our focus where it belongs, and that is in successfully implementing our trading strategies and building the bottom line.
Our Cards on the Table
We are developing relationships with the brokers we recommend, and they give us an introduction fee for each trader who goes through us. The fee is not added to your costs, only theirs. We gladly pass it along to you through our Badge system and Rewards Program, so be sure to submit that you have joined one of our brokers to receive credit.