A broker is an intermediary organization that provides access to exchange trading. In this article I will tell you how to work with a broker and how to choose the right broker.
Essential Brokers Essentials
A brokerage organization is licensed for its services and activities. It may be a company within a financial group, an independent commercial company. Banks sometimes combine brokerage functions.
The broker assists in the purchase and sale of securities, the conclusion of contracts, and currency exchange.
The services of brokers are as follows:
- providing access to the service and trading account;
- accounting of money and property transferred to customers;
- informing about the bidding process;
- receiving orders for the purchase and sale on the trading platform;
- preparation of reports on the movement of funds and securities, transactions;
- withdrawing money to wallets and customer accounts.
Organization of work with a broker
The algorithm is simple - below I gave a step-by-step procedure.
Need to open an account. The procedure is quick and easy.
2. Opening and funding accounts
Next, you log in to your account broker platformusing username and password. In order to start trading, replenish your account balance. There are such ways for this:
- bank card (Visa, MasterCard, Maestro);
- bank transfer;
- electronic wallets of Yandex.Money, WebMoney, Scrill, Neteller systems.
Sometimes you can replenish your account with bitcoins.
3. Exploring platform capabilities
Before starting trading, you need to study the features:
- transaction amounts;
- expiration time;
- closing the transaction ahead of schedule;
- stop loss, take profit, etc.
Depending on the broker, the functionality of the trading platform may vary.
Brokers draw up schedules for trading. For example, on weekends, some organizations do not have assets to trade, so trading on Saturday and Sunday is not held.
During the trading session, users open transactions on assets that interest them.
5. Drawing up reports
Brokers report to customers if they made deals during the day. Also, reports are prepared when the movement of funds. You will find the report in a separate tab in your account.
6. Withdrawal of funds
Funds are credited to the account when selling shares / bonds, earning at exchange rates. You can withdraw both the whole amount and part.
Brokers have different conditions for withdrawing funds - check this question with the manager separately.
Withdrawal may take up to 3 business days.
Recommendations for choosing a broker
Next I will tell you what to consider when choosing an organization.
1. The likelihood of bankruptcy
Yes, a brokerage organization may go bankrupt or lose its license.
Assets purchased through a broker are stored on deposit with electronic records. The state does not provide guarantees for brokerage accounts, and there are no investment insurance agencies.
I recommend using broker ratings. Choose the services of brokers who have an excellent reputation and have been working in the market for a long time.
2. Access to markets
For trading in the derivatives, foreign exchange and stock markets, contact universal brokers.
3. Trading by phone
This option will come in handy if you do not have the opportunity to use a personal PC or study deadlines.
But not all brokers have this opportunity.
4. Trading with a robot
Trading Robots provided for free or for free - it all depends on the conditions of work with the broker. Some organizations allow the use of a personal robot.
Trading robots are in demand even by experienced traders.
Sometimes brokers organize paid and free courses, classes with instructors.
Special tariff plans are being developed - “Personal broker”, “Educational”. Users will find out what they should buy according to the degree of risk, terms of investment and capital.
Usually, plans differ in capital requirements and are expensive. They have two drawbacks:
- there is no guarantee of profit;
- quality may be poor.
Free training with brokers is almost never found.
6. Trading platform
In rare situations, the client needs to install a trading terminal on a smartphone, computer or PC. Usually, the trading platform is already implemented on the broker's website.
The size of the tariffs depends on the particular broker.
Organizations also have several accounts with different values.
Tips for beginners
Here are some useful tips for beginners.
- Take a look at brokers who offer work on transparent and understandable conditions. At first, choose simple cheap tariffs - this will allow you to gain experience and “look around”.
- Even if at the end of the year you realize that you have overpaid for the services of brokers, practical skills and knowledge are worth it.
- Start with simple steps. Work daily to get results.
- Be prepared for continuous learning. Legislation and the economy are constantly changing.
- If you do not like the conditions of a brokerage organization, you can always change it. It takes time to find the perfect broker for yourself. Another option is to open an account with several organizations at once.
- Feel free to contact support for any questions. If the managers of the organization reacted quickly, this is a plus for the broker.
Summarizing the above
- The main thing when choosing a broker is simple and clear conditions. Subsequently, you can change your organization at any time if the services of brokers have ceased to suit you.
- Not all brokers have modern sites and applications that are suitable for any device and screen size. Be prepared to adapt to brokerage programs.
- Chat with support staff. So you will find confirmation indicated in the tariff plans, you will be able to find out additional nuances and evaluate how quickly your question has been answered.