Key Essentials in Finding the Best in Class Online Broker
If you want to join the growing ranks of people trading with a real money broker to speculate on the financial markets there are ample opportunities to do so. The leading online brokers offer a universe of products that enable you to place bets on anything from Facebook or Apple to the direction of the Pound against the US dollar or the oil price. Finding the most attractive real money online broker amid the morass of offerings on the market isn’t easy. To find the best real money broker to meet your needs you need a clear understanding of the types of trades that you would like to make and the markets that are of interest to you.
Finding the best broker also depends upon your knowledge of financial markets and your risk appetite. Many of the products available are leveraged, meaning that the profits – and losses – you make can far exceed the size of your initial stake. Real money trading is not for everyone but those who execute a professional trading strategy can enjoy great rewards trading online.
While the financial markets offer myriad opportunities you will find that it is not easy to make real money trading online. To be successful amid the boom in online trading in the UK you need to have a professional trading approach. Fortunately, the leading online brokers offer trading tools, educational resources and webinars to help enhance your trading performance. When you open an online trading account you should consider educating yourself about the markets and practicing with a demo account first. Many of the leading online brokers offer demo accounts where you can take risks that only incur virtual – rather than real-money – losses. Realmoney.co.uk takes an in depth look at the key essentials in trading online with a real money broker.
Choose a Best in Class Broker for Your Favoured Trading Play
If you want to place bets on stocks rising – and falling – Contracts for Difference (CFDs) are instruments worth considering. These are geared products meaning that you can obtain exposure to securities that far exceed the margin payment required to make a trade. CFDs are derivatives where in effect a tradeable contract is made between a client and a broker. When the contract expires, the client and the broker exchange the difference in the current value of the security. Unlike when you own an underlying security such as a share, a CFD enables you to ‘go short’ and bet on a fall in the price of a security rather it increasing in value.
Binary options are also derivatives contracts that are growing in popularity among retail investors. These instruments enable investors to place short-term bets on price fluctuations of assets and securities using a binary option broker. These bets can be for as long as minutes, days or weeks. Investors can also place so called turbo binary option bets which expire in just 30 seconds. Binary options trading has rapidly grown in popularity in recent years opening up the financial markets to retail investors.
Forex is the biggest market in the world. Currency trading provides deep levels of liquidity and is available to trade 24 hours a day, five days a week. If you think sterling may drop further or have doubts about the strength of the economy of a particular country, placing a currency bet is a great way to profit from your intuition. As well as major currencies most of the leading brokers allow you to speculate on minors and exotics as well.
Making decisions on what securities to buy and sell can be a daunting task of course. If you’d rather follow the trades of an investment guru via social trading than follow your own intuition, you can become part of the social investment network phenomenon that has swept across global markets in recent years. These networks allow you to copy the trades of star investors on the network. Alternatively, you can become a guru yourself and set up your own fund deriving an income stream from a growing army of followers.
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Trade CFDs, binaries & forex
Spreads from 0.7
When you shop around for a real money broker trading account you can take advantage of an array of broker bonus offers. These deals can provide a welcome fillip when you start out as a trader. Still, you should read the small print as there are likely to be strings attached to such offers. Not all bonus deals are created equally. It may be that you have to make a minimum deposit into your account or have to execute an agreed volume of trading with your real money broker before you are eligible. Some real money brokers offer points schemes linked to trading activity where additional cash bonuses or desirable items such as iPad’s are available to traders that meet the required amount of trading activity. While a trading bonus can be a nice incentive to start trading it you not be the guiding reason for choosing a broker to trade with.
Online Brokers Can Beat Your Traditional Broker
Before the advent of online trading, many viewed the financial markets and high finance as an inaccessible and opaque world. The proliferation of real money online brokers has now opened up the flow of financial information to the masses. Social media such as Twitter provides instantaneous updates of key economic data and market breaking news while internet forums are abuzz with market gossip. Online trading also makes it far more accessible to trade actively. Telephone-based trading via a bank or traditional broker seems very antiquated in comparison to online trading. Advances in technology give retail investors the capacity to execute trades instantaneously.
Key Essentials for Finding the Best Broker
While online trading offers many opportunities, unscrupulous rogue outfits are using the cloak of anonymity that the internet provides to defraud unwitting investors of their cash. You should always make sure that the real money online broker you choose is properly regulated, falling under the remit of the UK’s Financial Conduct Authority (FCA). Also check if the real money broker offers a good level of customer service. Many brokers provide an online chat function while you should expect to receive a speedy response to any e-mail inquiry that you might have. Ideally, a broker should also offer telephone support and provide a postal address.
- Charting and Analytical Tools
- 24/7 Customer Service
- Trading Signals Analysis
- Welcome Trading Bonus
- Webinars and Online Tutorials
- Large Range of Products
- News Flow
- Tight Spreads, Fee-Free Trading
When choosing a trading account it is essential to check the fees and charges levied by the broker. If you are trading with a CFD Broker or Forex Broker you need to check what the spreads are on each trade. Essentially, a spread is the difference between the bid and ask price on an asset or security. The tighter the spread, the cheaper it is to trade. You should also check if there are any monthly or annual fees and charges for having a brokerage account. The capacity to trade on a handheld device has become an essential feature rather than an accessory. When choosing a brokerage account you should make sure that it offers an app that enables you to open and close positions on the move while delivering quotes to your handheld device in real time.
Tips for Real Money Trading
When trading online for real money it is vitally important that you have a risk management strategy in place. Active trading carries a high level of risk and you should only trade with capital that you can afford to lose. The advent of unexpected turmoil in financial markets can be perilous to those making high-risk trades. If you are trading with CFDs or Forex you should put in place stop losses to protect your level of downside risk should market events turn against you. A limit order can also be put in place which will automatically close a trade at a profit after it strikes an agreed price.While not every trader uses technical analysis and charting tools to trade online you should choose a broker that offers such tools. Even if you prefer to take a more intuitive approach to your trading based upon your own research it is advisable to take into consideration what technical indicators are revealing before you make a trade.
- Always Place Stop/Loss
- Use Charting Tools
- Pick the Right Leverage
- Place a Take Profit Order
The history of finance is littered with examples where the seeming madness of crowds created investment bubbles. However, there is also a wisdom of crowds that it would be foolish to ignore. Social investment networks provide you with immediate access to the flow of information and the activity of buying and selling. When you open an account with a social investment network you will be able to instantly see which securities and assets are being heavily bought and sold. To take a trade against the bulk of the buying or selling would either be brave and insightful – or more likely incredibly stupid if gut instinct alone is your only reason for making the trade. Social investment networks have taken the information flow of the old trading floors of the eighties and nineties to your PC or handheld device. The flow of information on such networks can provide valuable insight and if you are inexperienced as a trader copying the trades of a ‘star investor’ could be a smart move.
Is Investing with Leverage for You?
Typically, the best online brokers vary the amount of leverage from 50:1, 100:1 or 200:1. With leverage you could effectively trade £100,000 of a currency with a deposit of just £1,000. While it is easy to set up a trading account offering this level of leverage never be fooled into thinking that leveraged instruments can be used without a high level of risk. If you’re trading CFDs, one way of protecting yourself against a big loss is to put in place a stop-loss order, which places an order to sell a security or asset when it reaches a pre-defined price. These can be put in place if you are taking a long or short position. If you are shorting a stock, meaning you are betting on a drop in its price, a stop-loss order is executed if the stock trades above a pre-defined price. Alternatively, if you are taking a long position the stop-loss order kicks in if the price falls below a pre-defined level. It is also advisable according to thebalance.com to put in place a take profit order, to close a profitable trade.
Can I trade for Free Online
Setting up an account with a real money online broker is not for everyone. If you’re interested in opening an account with a broker but are still not quite sure about taking the plunge and trading with real money, it could be worth trying out trading with a demo account. Leveraged products such as CFDs are high risk investment tools making it a good idea to practice first without risking your capital. A demo account can often be opened with a broker without the need to put down a deposit. Many brokers offer demo account users the same level of functionality that is available on a real account. Here you can practice trades and strategies without the fear of financial losses. But remember that a trader’s judgment can be altered when real money is put on the line. A winning streak on a demo account provides no guarantee of success when you make your first real money trade. The base emotions of fear and greed will be absent from virtual trading.