KUALA LUMPUR, MALAYSIA - Media OutReach Newswire - 16 July 2024 - When deciding which broker to trade with, there are several caveats to consider. A good broker is hard to find, especially if you are an emerging trader who has yet to become knowledgeable in the intricacies of the financial markets. However, some time-proven rules allow you to manage the risks and make this decision confidently. In this article, the experts at Octa, an experienced broker operating across the globe, list five notorious pitfalls to avoid when choosing a broker and offer their advice to help you make the right choice.
1. Insufficient time on the market
It stands to reason that any business that has been operating in a market for a number of years has a lot to say in its favour. Complying with the requirements of local authorities, successfully interacting with its clients, and ensuring legitimate profitability year after year are all signs of a stable and trustworthy broker. If you put your faith in a broker that meets these criteria, you can rest assured that it will stay on the regional market for a while, leaving you high and dry and unable to withdraw your well-earned profits.
2. Inadequate security
Data drive the modern world, and keeping your personal information under lock and key is crucial for individuals and organisations. Any data breach can result in identity theft and financial losses for clients, and financial brokers that handle sensitive personal and financial information must have robust security measures.
It is worth noting that when it comes to security, global brokers have the upper hand over local ones since they comply with the security regulations in all regions of operation. Exposure to a broad scope of challenges significantly strengthens global brokers' overall resistance to potential attacks and makes them more flexible when adjusting their security stance to the current risk landscape. Such brokers are well-versed in international best practices since it's the only way to stay afloat in this ever-changing and perilous environment.
Another important aspect to remember is the security of clients' funds. Before depositing your capital, you want to ensure the broker can safeguard it against risks and has the necessary mechanisms in place. For example, experts consider it a universal good practice for a financial broker to have a segregated bank account where client funds are deducted from operational capital.
3. Hidden fees and costs
In the investment and trading field, transparency is king. Brokers might advertise low commissions but have hidden withdrawals, inactivity, or data access fees. Adding up, these undisclosed costs can significantly eat into your profits. Check the broker's clients' reviews before committing to large deposits, and make sure your broker keeps true to its declared policies every step of the way.
What is more, you need to be aware of the size of spreads when choosing a financial broker. Simply put, the lower the spreads, the higher your gains. Over time, high spreads will inevitably accumulate and make it an uphill battle for you to keep your trading outcomes consistently positive. Conversely, low spreads allow you to take home what you earned and not pay more for brokerage services than is due.
4. Poor customer support
Competent and responsive customer support is one of the best indicators of a reputable and reliable broker. Ideally, you want your broker's customer support to operate around the clock—you never know when their help or advice might come in handy. If you encounter issues or have questions, poor customer support can result in significant delays in resolving problems, potentially leading to financial losses.
5. Lack of educational capabilities
Trading requires continuous learning, analysis, and skill improvement. Any experienced, client-centred broker is well aware of this fact. For this reason, you want to choose a broker that offers its clients a wide range of educational materials and promotes learning as a critical part of the trading journey.
On its part, Octa actively engages in bringing financial knowledge to its clients. The broker's proprietary trading platform, OctaTrader, has recently introduced an education and analysis hub seamlessly integrated into the solution's interface. This flexible toolkit facilitates fast and data-driven decision-making by offering a customisable feed of expert-curated content tailored to your trading style and asset preferences.
Conduct thorough due diligence when choosing a financial broker. Look for a global presence and sufficient experience, a transparent fee structure, reliable platforms, strong customer support, and robust security measures. Reading reviews, comparing multiple brokers, and starting with small investments can greatly help mitigate the risks and successfully navigate the trading landscape.
Hashtag: #Octa
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Octa
Octa is an international broker that has been providing online trading services worldwide since 2011. It offers commission-free access to financial markets and various services already utilised by clients from 180 countries who have opened more than 42 million trading accounts. Free educational webinars, articles, and analytical tools they provide help clients reach their investment goals. The company is involved in a comprehensive network of charitable and humanitarian initiatives, including the improvement of educational infrastructure and short-notice relief projects supporting local communities.
In the APAC region, Octa received the ‘Best Forex Broker Malaysia 2022’ and the ‘Most Reliable Broker Asia 2023’ awards from Global Banking and Finance Review and International Global Forex Awards, respectively.
source: Octa
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