The brokerage industry is one of the most competitive ones out there because there is a multitude of options that you will find. First and foremost, starting this business is not that difficult due to which many people set up their brokerages. Secondly, there is a huge demand for brokerages because lots of people are interested in taking advantage of the financial returns and flexibility that trading can offer. The problem is that choosing the right type of brokerage can become tough for investors because they need to consider various factors. Traders want the process to be straightforward, but due to the wide array of brokerage houses, they end up spending a lot of time looking for the right broker.
This time can be shortened if decision factors are divided into different categories. This is where broker reviews come in. The purpose of reviews is to compare similar features of different brokers to help people shortlist brokers that can offer them the best package. But, what features are considered? You can check out this XTRgate review to get an idea of how broker reviews are done. Some of the top factors that are included in the review of cryptocurrencies, forex, and other instruments’ brokers are highlighted below:
Regulation
A good broker review is one that will focus on the regulatory status of the brokers. Being a regulated broker means that there are some specific conditions that have to be fulfilled for obtaining the license to provide trading services. Their operations are also monitored and they cannot exploit their clientele, which can give peace of mind to traders.
Safety of Funds
This is a priority for the trader because they are putting their hard-earned money at risk. Obviously, they don’t want to trust just anyone with their funds as they could be compromised. Broker reviews shed light on the measures that brokers have taken for ensuring the safety of their customers’ funds. These usually include segregated accounts to ensure that no one can touch the traders’ funds without their permission. The broker themselves cannot use their clients’ money for any purpose.
Reputation
A broker review also sheds light on the reputation of the said broker, which depends on the kind of reviews they have received from their clients. Traders who use a broker’s services tend to give reviews on the broker’s website, Google, forums, and social media platforms. These reviews indicate whether the broker does live up to their claims or it is just making false promises and misleading customers.
Set of Features
Reviews of different brokerages also discuss the different aspects of a broker. This can include the type of accounts they are offering, the fees they charge, the trading platform that’s available and its ease of use, the ease of the account opening process, and the kind of customer service it offers. Analyzing the set of features offered by a broker is important if you want to ensure that it can cater to your needs and not give you any trouble during the trading process.
The Downsides
One of the most important factors you will notice in all the best online reviews is that they talk about the downsides of the brokers as well. This should be natural, but these days, reviewers can be quite biased as well. If you are reviewing a phone, you are supposed to talk about not only its amazing features but the less impressive ones as well. In a similar manner, the right review will talk about the best features as well as the weakest features of the broker so you have a clear picture of things before you sign up with one.
If a review is constantly praising the broker or a particular cryptocurrency, you can be sure that it is biased. There is no perfect broker in the world. Even the best ones have their downsides and the reviewer’s job is to highlight them as well. A reviewer is a critic to the brokers and a guide for traders who are looking for the right broker.
Bonuses
It is important to talk about bonuses because they are attractive for new traders. It needs to be realized here that the online trading world is full of new traders. In fact, most of online brokers target new traders because they are their biggest market. However, new traders are quite scared of trading for the first time. They are not ready to take risks with their money and therefore the broker needs some tactics to attract them. That’s where bonuses come in. Some brokers will offer some credit to the trader for the first deposit while others will minimize the risk in some way.
The right review will tell you about bonuses as well. That’s because if you are looking for a bonus to minimize your risk, you should not have to spend days finding the right broker. Since there are so many, you can end up spending weeks before you get to the right one. On the other hand, if you are looking at the right review, it will provide you with this information as well.
Minimum Deposits
One of the biggest hurdles in the way of new traders starting their trading accounts is the minimum deposit requirement from online brokers. Some online brokers have these limits set too high for new traders to join their trading platforms. You get the view that they don’t want new traders to join their trading platforms and are after only experienced traders. However, the online brokers that are friendly to new traders make sure that their initial deposit limits are low. You will notice that there is competition among these brokers. There was a time when a minimum deposit of just $250 was considered quite an offer from the broker.
However, you now have brokers that let you start trading with just $5 in your account. You can say that the competition among these brokers is proving to be greatly helpful for traders.
Foundation Year
Does it really matter when a broker started working? Should you be getting this information as a trader? Well, at first, it might seem like a piece of information that you don’t really need. However, this information is quite important for any trader who is thinking about signing up with a broker for the first time. Sometimes, online scams can be very sophisticated. They have all the ingredients in place to prove that they are legitimate businesses when they are not. For example, they will even have regulation from a regulatory authority. And when you see that a broker is regulated, there is no way you can think that it is a scam.
However, this is a huge mistake that even experienced traders can make. Even the brokers with regulation information on their websites can be scams. How? There are some regulatory authorities that are not considered fair and transparent. In fact, they are there for scam brokers to get regulated and provide their services around the world under the disguise of regulated and honest brokers. However, despite being regulated, when a broker makes too many blunders i.e. customer service complaints, corruption in trader funds, etc. it gets caught within a few years.
If a broker has been around for a decade, you can have some guarantee that it is not a scam. A scam can survive for a year or two but it is very unlikely for a scam broker to survive for decades. So, when you see that a broker has been around for 10 years or 15 years, you can be sure that you are signing up with the right one.
Asset Index
This particular piece of information is not so commonly found in online reviews. However, there are some detailed reviews that will provide you with information on the asset index from the broker. The asset index shows how many different types of asset classes you can trade-in when you sign up with a particular broker. Is this information important? Very important! With this information, you know which type of broker you are about to sign up with. A broker who is primarily a forex broker will not offer much in stocks, commodities, and cryptocurrencies. On the other hand, a crypto broker will offer the longest list of cryptocurrencies.
This way, you are able to find exactly the type of broker you are looking for. If you are interested in cryptocurrency trading, you should be able to sign up with a broker that provides cryptocurrency trading primarily.
Final Thoughts
Last but not least, you should pay attention to the tone and language of the review as well. Sometimes, it looks more like touting than a review of an online broker. When a reviewer becomes the mouthpiece of a broker, you can’t trust a single word he/she says. Look for online broker reviews that have the abovementioned traits in them and then decide a broker that meets your needs the best. Don’t forget to trade with the demo account before you shell out the money you have and deposit it straight away into your trading account.
