This debate is always on and why wouldn’t it be? People who are interested in trading want to know the right broker that they can sign up with to start their trading careers. They cannot take any risks because they are new traders and they do not have too much money to spare. They want their first decision to be the best decision. However, when you are a new trader, you do not have too much information with you to recognize the right broker. But don’t worry, you will not need any more information from anyone once you have read this review completely.
This review will guide you in such a way that you will always identify the right broker at first sight. At the same time, no scam trading brokers will be able to fool you and make you waste your money on their scam products. So, let’s get into the comparison straight away.
Good vs. Bad Broker – A Detailed Comparison
Responsible vs. Pushy
This is the first thing you will notice about online brokers. If you are on the website of the right broker, you will see that all the information on the website has been given with responsibility. You will not see the broker making any promises with you. In fact, you will often see on the website that the right brokers inform their traders about the risks of trading and investing as well. For example, if you are on the website of a CFD broker, you will see that they clearly state that CFD trading can involve a lot of risks. On the other hand, if you are on the wrong website, you will notice some pushiness in how the broker informs you about things.
The broker will tell you that there is a promotion or bonus for you if you sign up right now. They are always trying to lure you with some bonuses and incentives. The worst thing is that they will make promises, which is something you never see on any professional website belonging to any industry in the world. If there is a broker that tells you that you can make thousands of dollars every week by signing up with them, you must run away from this broker and never return.
Regulated vs. Non-regulated
The most reliable online brokers are always regulated. That’s something you will find out when you land on their websites and also when you read the online reviews. These reviews always provide you with information on the regulation of the broker. That’s because regulation is the most important achievement that an online broker can make. Regulation means that there is a reliable regulatory authority that will be looking into the financial matters of the broker. If the broker is engaging in any fraudulent activities, the regulatory authority will take action and block its website.
On the other hand, unreliable brokers will always find ways to tell you how regulation is not important. That’s the most wrong statement that you can hear from anyone. Regulation is extremely important because it saves traders’ money when they invest it with online brokers. You should keep away from signing up with an online broker that does not have any regulation as much as you can.
Commission vs. No Commission
Here, you cannot say that great brokers do not charge you any commissions. It is understandable that online brokers have to make money as well to keep their operations running. However, they have some good ways to make money from their traders. The best way to make money is by providing some great online trading platform to the traders. When traders make money, they trade more. The more they trade on the trading platform of the broker, the more money the broker will make. However, cheap, unregulated, and bad brokers do not use this strategy.
They want to make money as soon as possible, even if they have to resort to some illegal means to achieve their gains. So, when you sign up with the wrong broker, you notice that there are commissions everywhere. These commissions end up being landmines for you. You make a deposit in your account, and you find out that there is a commission. You make a withdrawal, and a commission has to be paid on that as well. You enter a trade, you have to pay a commission. The worst is that they do not even inform you about all this. You only come to know about the commissions when you withdraw or deposit money.
Focus vs. No Focus
That’s something you will realize when you have spent ample time on the website of the broker. The best brokers are always focused. They have a particular aim and vision, and you can see that they are always following that vision in their services. On the other hand, you will never see such focus when you sign up with the wrong broker. So, how do you see the focus of the broker? First, you just have to look at the types of trading accounts you have access to. Are you being offered trading accounts that are easy for all types of traders?
Usually, the best brokers do not have a long list of account. They might only have three different account types. These accounts types suit new, intermediate, and expert traders. At the same time, their features that come with these accounts have some focus as well. You will notice that a professional account comes with features that suit an expert trader. On the other hand, a basic account has basic features but specifically suited for a new trader. A wrong broker tries to lure new and experienced traders with things like bonuses and promotions. That’s the worst strategy.
A professional trader who has been doing it for years will never sign up on a trading platform for a bonus. They have other important preferences, which bad brokers are never able to see.
Final Thoughts
Now you understand the main differences between an excellent and a bad broker. There are many other additional differences as well. For example, a good and legitimate broker will make deposits and withdrawals easy for you whereas a bad broker will make your life miserable through conditions, terms, and unbelievable policies. Make sure you spend some time researching the right broker before you make a final decision. A wrong decision today might throw you out of your trading career tomorrow before you even learn to trade properly.