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Are you looking for the right broker in 2020 and beyond but unsure what to look for?

With the high competition nowadays, each broker offers different features, instruments and advantages.

That’s why choosing one not an easy task for a beginner or even an experienced trader.

You’ll need to drill down exactly what suits your trading style, personality and risk profile.

I say this because, in the last two decades, I’ve been through a fair share of brokers. So, I know how difficult this decision can be and how it can determine whether you make money or not as a trader.

In this article, I’ll share with you an easy-to-follow checklist which you can use to help you choose the right online broker in 2020 and beyond.

What is a broker or dealer?

A broker is a company or institution that gives a trader access to a live trading account and trading platform which enables them to buy, sell and monitor different instruments and assets.

Here’s my checklist to find your ideal broker…

Checklist item #1:
Make sure the broker or dealer is regulated!

This is a must…

Whenever you sign up with a broker, make sure they are authorised, regulated and recognised by leading regulation authorities.

You will most likely find this stated on the company’s website, in the ‘About Us’ or in their ‘Disclaimer’, along with their license number they hold with that regulator.

Countries with dedicated financial regulatory agencies include:

South Africa
(FSB) – Financial Services Board.

USA
(SEC) – Securities And Exchange Commission

(FINRA) – Financial Industry Regulatory Authority

Eurozone
(MiFID) – Markets In Financial Instruments Directive

UK
(FCA) – Financial Conduct Authority

Australia
(ASIC) – Australian Securities and Investments Commission

India
(SEBI) – Securities and Exchange Board of India

Japan
(JSDA) – Japan Securities Dealers Association

Switzerland
(FINMA) – Swiss Financial Market Supervisory Authority

When you sign up with a regulated broker, you’ll at least have the security and assurance that they have met certain standards approved by the regulatory body, such as:

  • Having the right capital to protect the clients’ funds

  • Ensure the firm won’t go bust

Confirm they have met certain requirements from the financial service provider

Checklist item #2:
Check their reviews and testimonials

Before you make any decisions, you’ll need to see what others have said and are saying about the broker or the dealer company.

You can do this by searching on Google, ‘Hello Peter’, trading forums or go onto their social media pages to read what other unbiased REAL clients have written about them when it comes to reviews, testimonials and ratings.

Checklist item #3:
Broker minimum requirements

There are two minimums to take into account: Minimum balance and minimum deposit per trade.

Most brokers require you to start with a certain minimum balance to set up your trading account.

Nowadays, with the high competition, you should easily be able to find brokers or dealers who require no more than R1,000 up to R5,000 to open a trading account.

If they require any more to open your trading account, just know that there are other brokers out their where you can start with less.  

As with the minimum deposit to take a trade, you can easily find reputable brokers where the minimum is under R200 per trade.

Checklist item #4:
Availability:
What they can offer you

You should have a good idea on what you’d like to trade.

This is why before you sign up with the broker, you’ll need to see the availability and range of trading instruments the company has to offer.

What assets do you want to trade?
Shares, CFDs, Options, Futures, Spread Betting etc…

What markets do you want to trade?
Stocks, currencies, commodities, indices, bonds, ETFs or crypto-currencies…

Where do you want to trade?
Via phone, mobile or computer.

What times would you like to trade?
Morning, noon or night?

What gearing and leverage would you like to trade?
Whether you’re a Forex trader or a stock trader you’ll need to find out what gearing the broker has to offer.

Such as 5:1 – 20:1 (for stocks) and 50:1 up to 200:1 (for Forex).

E.g. With gearing (or leverage) of 50:1 this means if you deposit R1,000 into a trade you can hold a position exposed and valued up to R50,000.

REMEMBER: the higher the leverage offered, the higher the reward but also the potential risk.

Do they offer a demo account or a trial period?
You should never rush into trading with real money, before getting to know your broker and your trading platform.

That’s why you should ask your broker if they have a demo trading platform or account that you can use to test out what they have to offer with your strategies

Checklist item #5:
Do they offer trading education and training?

A good and genuine broker should want you to be successful as a trader.
And to do this, they should offer you a whole range of free education, training sources and tools such as:

  • Training guides

  • Glossary

  • Trading videos, podcasts, forums

  • Written articles

  • Step-by-step trading tutorials

  • Support staff

  • Opinion-based resources

  • Live trading events and webinars

  • Trading calculators, tools and calendars

Checklist item #6:
The trading platform itself

Majority of your analyses, preparation and the execution of trades are going to take place on the trading platform itself.

This is why you’ll need to try it out, test it and learn how to use it, to see if it will suit your trading.

Here is a list of items to watch out for with your trading platform:
 
Item #1: Chart types:
E.g. Line chart and candle sticks

Item #2: Time frame options of:
E.g. 1 hour, 4 hour, daily, weekly & monthly

Item #3: Trading indicators and oscillators:
E.g. RSI, Stochastics, MACD, OBV, ADX, Bollinger Bands etc…
 
Item #4: Real time charts:
E.g. Not having to refresh your screen every 15 minutes or download anything unnecessarily.
 
Item #5: Live streaming data:
E.g. News feed, live speeches & announcements, and SENS (Stock Exchange News Service). 

Item #6: Customized watch lists:
Make sure there is a functionality to create, modify and monitor a watchlist with the markets you’ll be trading.

Item #7: Trading order variety:
E.g. Market, buy, sell, limit, stops, trailing stop loss and guaranteed stop losses

Item #8: Trading journal:
E.g. Portfolio profit & loss summary of open, closed and historical trades.

Item #9: Trading order box:
Where you’ll place your entry, stop loss, take profit, margin requirements, order quantity, gain potential, risk potential and risk to reward.

Item #10: Reliability:
When you’re testing the trading platform, this is where you can ensure it’s reliable in a way that:

  • It runs smoothly

  • It saves your layout, charts and profile

  • It doesn’t crash

  • The speed is good

  • The features all work as they should

  • The web-based (java) or desktop application works great

  • The mobile app is easy-to-use and handle

NOTE: Some great trading platforms include: MetaTrader 4 & 5, ProTrader, Oanda, IG Markets and TradingView. 

Checklist item #7:
Customer support

It’s important to find out where you can contact your broker, in case you need help due to some technical or trading reason.

Which mediums can you contact them through?
•    Phone
•    Email
•    Online live chat
•    WhatsApp
•    Skype
•    Forums

Also when you give the representative a call, make sure they sound knowledgeable and confident in what they tell you.

Think about how they respond to your questions, how quickly do they solve your queries, are they friendly and approachable?

The contact support will also confirm their quality, efficiency, reliability and credibility for what the company already portrays and offers.

Checklist item #8:
Costs and fees

You will never be able to avoid costs and fees completely, but you can minimize them by choosing the right broker.

You’ll need to do a bit of research to compare the costs of buying, selling and holding trades.

Make sure you look at the following:

  • Spreads (Fixed or variable)

    Note: The spreads should be low for high volume traded markets

  • Commissions (When you enter and when you exit)

  • Margin interest

  • Service charges

Minimum charge per trade e.g. R100

Checklist item #9:
Ease of deposits and withdrawals

This is an important one…

Each broker or dealer has their own measures and policies when it comes to their clients depositing into their trading accounts or withdrawing back into their bank accounts.

Ask your broker how you can make a deposit whether it be via:

  • EFT

  • Credit Card

  • PayPal

  • Wire transfer

Then confirm with your broker to send you their policies and costs on how you can withdraw your money and how long it will take whether it be:

  • Via email to ask for a withdraw which will take under 3 trading days.

  • Via the trading platform where you can withdraw through an authentication process.

  • Via the broker who can only proceed with a withdrawal on the phone which will take three working days.

Note: A withdrawal and deposit with a reputable and regulated broker should NEVER take more than three working days or warning bells should ring.

Checklist item #10:
Safety, security and legitimacy  

There are a few ways to check if the broker is safe and secure including:

  • Their website starts with HTTPS: and not HTTP:

  • They are insured and deal with top banks around the world.

  • They have secured encryption processes.

  • They have proven to show growth for their clients over the last five years.

  • They have won broker awards or are listed in the top brokers in the country you’re looking at.

Final Words

You now have an idea on how to find the most ideal broker for you. Take your time to do the research and go through each line item one by one.

Never rush into choosing a broker as this can be a significant decision for your financial future.  

If there are any extra check list items you believe are essential to find the right broker, or if you found this article helpful in some way, please let me know by emailing Timon@TimonandMATI.com

Trade well,

Timon Rossolimos

Founder, MATI Trader

PS: If you found this article helpful let me know by e-mailing timon@timonandmati.com or click here to let us know in our MATI Trader chat room.