Broker’s SecretsThe 5 Secrets of a Broker Which Every Trader Must Know!
Brokers are an integral part of your trading journey and play a huge role in dictating your success in the same. While there are a lot of things which need to analyzed before choosing the right broker, there are some secrets which a broker would never tell you:- that you need to know
How Account Managers Gain an Inside Eye into Your Financial Capacity
There are brokers who are capable enough to scale up your trading capital into actual profits and on the other hand, the market today has a lot of traders who might sound convincing to the ear but have their own aggressive and calculative mind working behind the doors. You might find your account manager to be genuinely interested in your welfare and success as a trader, but the real truth is brokers use these account managers to get an insight into your financial capabilities in order to scale the investment potential from you as a trader. Account managers can be really persuasive when it comes to making you invest periodically and the game plan is usually to lure the trader with impressive deals and promises like free trading lessons, higher payouts, faster withdrawals and so on.
Brokers Aren't often honest about their initial costs!
Most of the brokers we met along the way in recent years have always been very correct and their platforms are still quite accurate. but unfortunately it is not always the case with all brokers.
Be wary of the initial win you seem to make when you start Trading . in order to make the trader to gain confidence, the platform might be set up with a lower cost, but over time as the trader begins to get addicted to the sweetness of success, and at this time the platform return with normal conditions. It is important for the trader to stay vigilant and under such a situation, terminate the dealings with the broker and withdraw the trading capital immediately.
Beware of Bonuses!
Be aware of the conditions attached to the bonus your Broker promises . While bonuses might look attractive in the beginning, they come with some really risky clauses attached with them , It may be used to manipulate you to stay in trading longer than you wish to . these clauses could include restrictions in withdrawing the profits and there have been instances where there have been restrictive clauses on withdrawing your trading capital as well .
The bonus might be tempting but it actually becomes your bonus only when you reach a particular threshold of trading volume . Mentally you are unable to perform because of the psychological pressure caused by this high target.
The social trading of many accredited brokers is very professional, but some new brokers want to take incorrectly advantage of this trend.
Be wary of following seemingly genuine traders attached to bad Broker. They may be just false profiles created to make it seem they are aggressively placing trades and making money to encourage you to follow their role model. Trading these profiles could become bad in a short time so that you can never make enough money.
Trading Signals Need to Be Dealt With Caution!
Trading signals are often a part of the package from broker houses. But bad broker uses these trading signals just like a magic wand which actually hallucinates the trader to follow them blindly. These signals could be helpful in the beginning but not in the long run. It may be better to not follow these generously given trading signals, or better yet, follow the profitable trading signals initially and pull out of trading when it starts to slide.
the Analyst's answerJean Grossett - Financial analyst
It is important to note that irrespective of the fact that account managers may attempt to pry into your financial capacity, you as a trader is responsible for every action you perform on a trade terminal. So never get swayed by sweet talks, and unrealistic offers by snake oil sales men.
the Manager's answerRobert Danvil - Investment Manager
Advices… Trading competitions organized by most brokers are totally not advisable for newbie traders, as this encourages them into forming habits that have long lasting effects on their live trading accounts. These habits are usually risk management and money management habits, which are usually very difficult to unlearn. There is actually no substitute for actual live trading as this will shed light on the actual activities of the brokers.
Although trading bonuses and promotions, often offers a low risk way of getting into the trading business. When accepting bonuses, it is important to read through the terms and conditions and other documents related to the promotion. In some cases, you might even require the service of legal personnel to explain in details what each clause truly means and how it affects you as a trader.
When engaging in social trading, it is required that you look more into the major risk metrics of the trade signals which is the maximal adverse excursion (MAE) and the maximal drawdown of the entire account intended to be followed. Most brokerage companies offering these services do not display these metrics, and those that do only display the maximal drawdown. Amongst the metrics to look out for are risk to reward ratio, and percentage reliability of signals.