Hi guys, hi from Andrea Unger.
How to choose the broker?
This question is often asked and obviously, there are many answers to such a question.
The first thing to do is to choose somebody who is supposed to do what you want him to do, it’s very clever, very smart.
Yes but actually you have to ask yourself: “On what markets, what instruments do I want to trade?”.
This is the first question and the answer to this already drives you somewhere.
The answer might depend on the level of your capital dedicated to trading.
If you are not willing to dedicate a big amount of money, you are sort of compelled to choose a broker offering Forex and CFDs.
If you want to work with $2,000, you need somebody who allows you to trade ForEx or CFDs, just because on these markets you can scale down your position as much as you need.
So actually you have to choose among all the Forex brokers out there and if you want to trade futures because you have a large amount of money to dedicate to trading you have to choose a broker offering futures and you have to also identify what markets you want to trade.
Do I want to trade Italian futures? Do I want to trade Eurex Germany? Do I want to trade the CME Globex futures or maybe I want to trade the Hong Kong futures or Nikkei or KOSPI or Kuala Lumpur or whatever?
So actually if you have something that works on some markets, make sure the broker you choose to offer access to those markets, this is pretty much obvious but not always it is verified as a starting point and then sometimes when it’s too late we adapt our way to operate on other markets which we did not intend to trade as a first choice.
Is the technology of the broker good enough?
How do I know?
You have to read reviews, there are plenty of reviews on the internet and today we have very broad access to the Internet.
So read the reviews, investigate, read and try to understand if it’s the brother of the broker writing a review or if there are serious reviews about how things work and also try to identify if the answer is from somebody who is in line with your needs.
If the answer comes from, for example, a high-frequency trader who wants a millisecond execution, not necessary that might be what you are looking for.
So maybe if, even if that guy is skeptical about the technology of the broker, maybe for your needs the broker is still good, so try to properly summarize what you read.
So the technology, market assets and technology have to be good and then obviously the most important thing: is my money in good hands?
Is my money safe?
Again, read the reviews, make sure that whoever you open the account with is willing and capable of giving you the money as soon as possible, as soon as you require to withdraw the whole amount of money or a part of it.
Read the reviews if really the deposits are given back on a very short time after your request if you plan to do so, this is very critical.
Unfortunately, I must tell that, most often, those brokers who offer some tutor, following somebody trader to follow you in your decisions, some mentor, they are the less serious.
I mean, there is no equation if there is a mentor they are not serious, I don’t want to say that, but I’ve read many cases where the broker was offering mentorship to tutoring or whatever to the traders then that was a scam.
Normally, this is a good service, but if it’s intended the wrong way it’s dangerous, so be careful about this because the point is, the broker says: “If you don’t know what to trade, don’t worry! My guys, they are experienced guys they are telling you what to do!”
My answer is: “If you don’t know how to trade don’t trade! Don’t open an account!”
So it’s a bit different okay!
So it might have been that those who offer the moon, actually take your money and run to the moon!
But this is has said, it’s not an equation, I don’t want to… it’s not my intention to offend anybody saying this, but I just want to say to you: “Be careful, ok!?!”
Then where is my money going to?
Is it at the broker? Is it in a bank? And if it is in a bank, what bank? Where is the bank?
All this information might help you in the decision because maybe they’re sending the money into a bank from Hong Kong, you have to declare the money in Hong Kong, you don’t want to have your money in Hong Kong?
That might be something critical for your decision.
Now that said, depending on whoever you choose, if they are serious or not is another matter of fact and very useful help, there are many scams out there.
I always suggest you stay with big brokers, the big names okay, and we know the big names.
I mean, I am not sponsoring anybody here, but CMC Markets, IG Markets, IC markets, Saxo, PepperStone, TickMill all big names out there is a list of these where you have a higher probability of being in good hands at least, in serious hands.
I had an account with one of these big players and you might be aware if you followed my story, that when there was the Swiss frank fact, from one day to the other due to a recalculation of the exit level of a stop-loss on Singapore dollar against Swiss franc, not even Euros this one, I found something more than 100,000 euros less on my balance.
I immediately connected to the broker claiming that it was absolutely outrageous what happened.
Obviously, they did not give me my money back, but they offered the address where I could send my claims to, it was the Ombudsman in the UK and they should have taken care of my claims.
They did, I went through the whole path and I must say that after two years I was right and the decision was that there was no reason to take that money from my account.
That money was entirely given back to me with 8% interest per year and even and another small sum for some, I don’t know, disturb or something like that.
So even though the first decision of this big broker was against me and was absolutely unpleasant to find, that broker, in the end, was very serious because they followed the decision of the Ombudsman and gave it back the whole amount plus interests.
So I was lucky because I was in good hands, it took two years, it was not pleasant, it was a mess but in the end, everything went well, that’s why I suggest always to stay with bigger brokers.
Somebody asked me: “Yeah, but what broker do you suggest personally?”
I’ve always said openly, I trade at Interactive Brokers.
I think they offer what I need.
I’m an automated trader, the connection to Interactive Brokers is good through my platform where I develop systems, which is Multicharts and in this case that is another point, when you have something specific to do, make sure that you can properly connect and do what you want to do, not only the broker has that you can interfere with the broker the right way.
I can do that with Interactive Brokers so there is no problem for me and I suggested Interactive Brokers to all the Unger Academy’s students who are supposed to do what I do because I think that’s the best solution for me and therefore for those who intend to do what I do.
I have no interest in getting accounts opened at Interactive Brokers, nobody is paying any repaid to me or to Unger Academy nothing.
I mean, I just say this is what I use and I think is the best solution.
Those people go independently to the site of Interactive Brokers.
Somebody also says: “Yes but you have your face on some brokers pages so you recommend them!”
There are, I think, three brokers where my face might appear on their sites.
These are Metatrader Brokers or ForeEX brokers, they are Purple trading in the Czech Republic, TMS in Poland and Two-Trade in Germany.
Actually, because I know the management of these 3 companies and I am pretty much confident that they are serious and honest guys which is very important in this business.
So I don’t mind putting my face there because I believe that if you give them your money to trade, they will give it back when you ask for it.
This is my opinion, I might be wrong of course, but knowing these guys especially if you trade, we know it went from 2005 maybe, they are my personal friends, all these guys are people I like and I think they are honest so to say this, on their website, is something that it’s fine with me.
I don’t know if they offer the best condition, maybe they don’t, maybe they have a spread of 20 pips, I don’t know, I don’t care about that.
I’m not planning to send people there to trade to make money, I’m just saying I think, I believe that those guys are honest, so if you want to sleep at night without taking care of all the doubts you might have, I think those guys are serious, that’s it.
If you find a link anywhere from me, sending you to their sites, be sure that link has no tracking cookies or so because I’m not getting any benefit from somebody opening accounts with any of them.
They are even competitors some of them, so I mean, I just say those guys, in my opinion, are serious, Purple trading, TMS and Two-Trade Germany.
That’s it, I mean this is the reason why you might find my face on their websites, no other real reason.
So, read reviews!!!
Read reviews as much as possible.
If you go and you plan a holiday I believe you are reading the reviews of a hotel or the cruise or where you are planning to go to.
So do the same on ForEx, do the same on futures, do the same!
Look for reviews and if you are not convinced that that broker is really that good, simply ignore that broker.
It’s not that difficult.
I’m sorry that maybe some new brokers don’t offer many reviews because they are new and maybe they are the best brokers in the world.
Unfortunately, I would prefer to wait for a while to see how they establish their business before giving them my money.
So take care of technical aspects, depending on what markets, what you need how you can interface with them.
How serious they are, read reviews, also for the first case, read reviews, read reviews and read reviews.
Really dig into the internet about anything you can read, make sure the reviews are not fake reviews.
Then make sure, the last is that the economic condition is in line with what you expect.
Economic condition means both spreads, costs of trading and other costs that might be there.
In this case, it doesn’t really matter if they are Market makers or ECN brokers, because it’s not automatic that a Market Maker is evil and the other one is good.
I mean, everything depends on how they run their business and you might have a benefit in working with a Market Maker or you might have a benefit in working through an ECM broker.
So actually make sure you don’t just work and decide on what you hear in the bar or the pub.
Make sure you make your proper choice looking for the proper reviews and that what you choose is what you need for your purpose, for your needs, that’s the most important thing.
Among the three, I stress that honesty and seriousness of the broker is obviously the first thing I look at because it’s all about money, they are taking care of your money and we want our money to be in good hands, because money is something we have earned working hard, so it’s good to know it’s in a safe place.
That’s it guys, see you next time ciao.