You are searching for the best forex broker in 2020, and you are not sure of the details to scrutinize? In this article, here are everything you need to know in order to choose the best forex broker for you.
If you are wondering which broker to choose for your trading, this article is for you. You will learn how to select a good trading broker, and you may find it through these suggestions.
What is an online stock broker?
A stock broker is a financial intermediary that will allow you to make orders to buy and sell on the stock market. The latter can either represent an investment company or be a real banking establishment. The investment company offers some of the lowest brokerage prices on the market. In return, it is not possible to let money sleep on its stock market portfolio: the company has an obligation to continuously invest the latter, since it is not a banking establishment.
How to choose your online broker: the difference in prices
To choose your online broker, some research on the Internet must obviously be done. The rates applied by the different banking and investment agencies are different, and the trader must think about the formula that will interest him the most before embarking on stock market operations.
Some online brokers operate on a flat rate basis, while others charge by the percentage invested. For example, if you request the discovery package, the applicable rate will be € 1.99 for an order less than € 500. So, whether you invest in shares for an amount of € 1, or € 500, the applicable brokerage fees will be the same. These will obviously apply during resale.
However, the broker offers a percentage rate. The applicable rate is then 0.04% of the total amount of the transaction. The costs will obviously be paid for the purchase as for the sale, but will always be proportional to the amount invested, which can have advantages for less experienced traders.
Choose your trading profile to better negotiate prices
Each trader has his own profile, and brokerage fees should be considered in this sense. Thus, a trader who is oriented on long-term transactions may be less attentive to brokerage fees, because his transactions, if they work, should earn him more money.
Conversely, a day trader, who makes several small transactions every day in order to reap modest but regular gains, will be much more attentive to brokerage fees. Depending on the profile chosen and the broker requested, a winning position can quickly prove to be in deficit in the event of mismanagement of fees. Brokerage fees have a direct influence on the trader’s performance here.
Between the two profiles is that of the swing trader, who seeks to take advantage of stock market movements taking place over a few days. If the gains obtained can be significant, this type of profile must always be vigilant with the trading fees applicable to its transactions.
Growing stock market investments
If playing in the stock market was at a time reserved for an elite working within the framework of the largest investment companies, the development of the Internet and technical analysis tools has greatly democratized trading. There are more and more budding traders, beginners or experienced. Online brokers like ETFinance now allow you to trade online from home, and limit possible losses. However, it is always necessary to remain vigilant when playing a few sums on the stock market, since an investment can always be lost, partially or totally, during a violent reversal of the trend.