Anyone who is thinking about trading in the financial market should know that they first need to create their trading account in order to get started.
Since there are almost countless platforms that are available all around the world, choosing one to be your broker can be more significant and difficult than most people realize.
From the get-go, when you take a look at most of your options, they will appear to be homogenous, which means they offer very similar services. It is only when you take a closer look that you will come to see the differentiating factors.
We approached a leading trading and crypto investor Ido Fishman and got some tips from him on how to get started with online trading.
Fishman’s guide basically defines what you should check for making the right decision. As per Ido Fishman, some of the factors to consider when you are opening your first trading account are:
You will always incur a transaction cost whenever you are buying or selling a financial product such as cryptocurrency, stocks, forex or Contract for Difference (CFD). This means the more you increase your trading volume, the higher the cost will go. If this element is left unchecked, you will realize that these transaction costs can eat into your profits significantly or push up your losses. The best way for anyone to counter this is by ensuring that the transaction costs associated with your trading account are not excessive to the point that they eliminate your ability of earning a profit from your trades.
There are two forms in which transaction costs can be charged; either on the bid-ask prices, which are referred to as bid-ask spreads or in the form of a commission on the transaction value of the trade. The bid-ask spreads that are provided by brokerages are highly competitive
The Reputation of the brokerage
Personal finance has been truly globalized, thanks to the internet. Before this happened, retail investors had no other choice but to call their trading representatives for buying or selling assets on their behalf. Nowadays, as per Ido Fishman, all a trader needs is a reliable and strong internet connection for utilizing any platform offered by brokers all over the world. However, the problem with this convenience is that there are a number of small and obscure brokers who are offering their services out there.
When selecting a platform, some key considerations to be made include the availability of tools and the user experience. The former comprise of charting indicators and customizable tools. Some other must-haves include automated trading and stop-loss features. All of these can be incredibly helpful to you as a trader when you first open your trading account. They can simplify the process for you and enable you to minimize your losses and boost your returns as much as possible.
In today’s competitive and fast-paced market, it has become vitally important for people to be able to use their smartphones and tablets for checking on their trades or conducting them. People have now begun to spend more time on their phones and prefer to use them over laptops and desktops for different purposes, which include trading. Thus, before you open a trading account, you should check to see if the provider you are opting for offers an app or a mobile trading platform that allows you to use your smartphone or tablet for trading. This could be helpful for you in the long run, so it is best not to ignore this feature.
Availability of products
It is also important to check what products you will be able to trade through your trading account. You don’t want to be in a situation where you have to open up multiple trading accounts on different platforms because you cannot access all financial products through a single trading account. For instance, if you are interested in trading both stocks and cryptocurrencies, then you need to open a trading account with a provider who offers you both instruments instead of just one.
Ease of account opening
Put simply, when it comes to opening a trading account, it is understood that you want the most convenient option that’s available in the market. Every trader appreciates one that has a low barrier to entry. Being able to sign up online saves you considerable time. Similarly, not having to submit a sizable sum as minimum funding for your trading account gives you a great deal of flexibility because you don’t have to risk all your money in one go.
Opening your first trading account is a big deal and your priority should be to ensure you are able to sign up with a provider that offers you an account option in accordance with your needs. It should offer you flexibility and all the other features that enable successful trading.