fChoosing a reputable broker that can give you access to the leading African and other global exchanges is the first step for most traders. The good news is that there are dozens of brokerage firms that can assist newcomers and more experienced traders, no matter what kinds of assets they want to buy and sell. But, if you’re new to the idea of online trading, it’s critical to know how to evaluate various brokers who compete for your business. Among the honest, reputable, well-known firms, which one is the best match for your style of trading, financial resources, personal preferences, and experience level? If you are an Africa-based trading enthusiast, use the following guidelines to find a broker that suits your needs.
Find the Features and Functions You Need
What kinds of features should you look for? Besides low fees and commissions, opt for a provider with excellent educational resources and a decent mobile platform. Other things that help are easy account setup, research and charting tools, a simulator so you can practice your skills, access to many different markets, responsive customer service, and mostly positive reviews.
Test Customer Service
Customer service is one of the top things you should be looking for. One way to test drive a company’s abilities is to call their listed phone number, send them an email inquiry, or access the chat feature on their website. Ask a simple, general question about how to open a new account and see how they answer. If it takes several minutes just to get through on the phone, or if they are non-responsive to emails or chat queries, consider a firm that has more reactive customer service.
Begin With Forex
Choose a brokerage firm that offers forex accounts. If you’ve never traded before, consider starting with foreign exchange, also known as forex for short, or international currencies. Whatever name you prefer, a capable platform and broker are all you need when starting to trade at South Africa or from any other location on the continent. Why forex?
There are several things that make this asset class the perfect entry point for newcomers to the securities markets. First, it’s easy to follow the constantly changing values of currency pairs like USD/ZAR (the US dollar to the South African rand) or EUR/JPY (the Euro to the Japanese yen). Generally, it takes many just a few days to learn the basics and get busy with placing orders and seeing profits in the forex markets.
Look for Easy Stop Setting
Many who routinely buy and sell stocks, options, forex, bonds, and others assets use stops to protect themselves from large losses and to lock in gains. That’s why it is so essential to look for brokers who make it easy to set stops on every transaction. Most service providers offer stops within their standard tool menus. However, do a few trials of your top choices among brokerages to see how easy or difficult it is to set stops. Your aim should be to set upper and lower values on most transactions. Then, if prices sink or rise rapidly, you’ll be automatically taken out of the trade, thus preserving your gain or limiting your loss.
Ask About Account Minimums
You probably won’t have to ask because most websites will list the firm’s required opening balances for various accounts. For instance, it’s more common to see very low account minimums for assets like CFDs, shares, and forex. Those who prefer to trade more complex instruments like futures, options, and bonds often pay more to get their accounts set up. Be wary of any service provider that does not list its minimums in a prominent place on their main web page. Another reason to avoid high fees in this area is that most brokerages nowadays charge very modest startup and trading fees, so high ones should serve as a ‘beware’ warning sign.
Check Reviews
Review sites are not the most reliable gauge of how good or bad a company is. However, you can gain some general insights into how people feel. The most reputable trading platforms and brokerage firms, for instance, often have thousands of online reviews that are overwhelmingly positive. Read several to get a feel for how well or poorly the firm performs.
Know Your Risk Tolerance
Before you begin placing orders for stocks, forex pairs, or anything else, assess your tolerance for risk. If it’s low, keep all your purchases as small as possible and avoid assets that come with very high volatility, like cryptocurrencies. If you can’t place small orders due to the broker’s rules or setup, consider finding another place to do business.