Top Brokers and Accounts

The process of choosing a broker is one of the most difficult a trader will face, and one that often comes too early in the trading lifecycle. When traders engage in the markets, they do so through a broker, and pay fees for the privilege of using the broker's trading platform. While it's easy to think that broker choice doesn't matter a great deal, it can have an ongoing effect in that the costs of trading are variable and the legitimacy of operators varies across the markets. As a result, traders should bear in mind the following tips when choosing a broker to ensure they make the right call for them and their trading account.

Choosing a broker is one of the most important steps you can take in the run up to trading the markets, and the choice you make at the point of entry into the markets often becomes one you have to live with through your early trading stages (you can always change the broker at any stage). At this most vulnerable time in the trading process, having access to the right broker can make the difference between a success and a trading failure, and so traders need to take measures to establish the best brokerage option for their needs.

Latest Broker Reviews and Updates

(01 Apr 2015) CapitalSpreads have extended their trading hours on a number of markets.

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(18 Mar 2015) Following the latest developments and FCA involvement into Swiss franc trading on 15 January, we have updated spread betting comparison table to reflect the latest changes and keep our visitors up-to-date.

(27 Feb 2015) DF Markets are adding new functions to their DFTrader platform - see the post for details.

Read DF Markets Review

Choose what you want to trade

Before you even think of opening an account you need to decide for yourself what markets and instruments you want to trade. Nowadays, you have a wide range of options to choose from: financial spread betting, Contracts For Difference (CFDs), Forex, conventional shares. Before you start, make sure you understand advantages and disadvantages of each option available to you.

Look for Price

Undoubtedly one of the most important elements of the broker choice equation is the pricing they charge, both in terms of the spreads in key markets and in terms of the financing charges applicable to cover the costs of leverage. While pricing alone shouldn't be the deciding factor, it is undeniably one of the more important elements of choosing a broker which is essentially a commodity service. Lower priced brokers can and will save you money in both the short and long term, and will make it easier to profit from the markets moving forward.

Regulation

Make sure you check broker regulations before you open an account; brokers have a legal obligation to be registered, authorised and regulated by Financial Authority in their jurisdiction. One of the most prominent regulators in Europe is UK Financial Conduct Authority (FCA); any broker who is FCA regulated is required to adhere to strict, complex rules designed to protect consumers and investors, and as a result FCA regulation gives traders some peace of mind in terms of the legitimacy of the organisation they are dealing with (customers of FCA regulated brokers are covered by Financial Services Compensation Scheme).

At Independent Investor we deal mainly with FCA regulated brokers and we clearly state if broker is not FCA regulated.

Range of Markets

When you're choosing a trading broker, you want to find an option you can stay with for the longer term. One of the most practically important things traders have to contend with is the selection of markets that are quoted by their broker, and those that generally have access to the widest selection tend to be more preferable. There is no point in limiting your options arbitrarily by choosing the wrong broker from the outset - look for a wide selection of tradable markets as one of the factors in making your choice as to which broker to choose.

Read What Others Have to Say

The beauty of the Internet is that it's easy to find opinions on different brokers from real, live traders who have been in your shoes previously. Go in search of these opinions and digest as many reviews, comments and articles as you can about traders' experiences with different brokerage options. While reading broker-written material is one thing, user-generated reviews, experienced and reports of different providers and the services they offer can be far more telling for those looking to choose a broker than any other indicator, in terms of who best to trade with.

On Independent Investor, you will find a user ratings section for each broker reviewed; we manually moderate those reviews to maintain integrity and impartiality.

Trade a Demo Account

Finally, before you settle on a particular broker it is always wise to investigate their demo account platform, and to trade through it to get a better feel for the service and platform that they provide. Demo accounts are often ultimately where decisions are made about brokerage services, and even those that pass the other elements of the checklist can fall down at the demo account stage. Demo accounts are usually free and obviously attract no risk, so traders are advised to take advantage of them before depositing their capital with broker. By trading through these platforms, traders can better determine the optimal broker for their market access.

Please note: some brokers do not offer fully functional platform on demo accounts so you might consider opening live and demo accounts at once to get a better feel.