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Best Broker for a Newbie
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TheLastBear

Member Since Jul 03, 2012  186 posts TheLastBear Jul 11 2012 at 09:59
There is no such thing as best broker for a newbie, true. A good broker is good for all. I disagree that the best brokers do not offer bonuses. There are plenty of good brokers who do offer bonuses and have loyalty programs. It also depends on what you consider best broker. Most use the MT4 or MT5 platform. Spreads are one thing you can judge them by. I judge by customer service and security of my funds. Execution of trades is also part of it.

Pax puts the X in Forex.
aj901512

Member Since Mar 07, 2010  60 posts df233336 (aj901512) Jul 11 2012 at 10:03

   TheLastBear posted:
   There is no such thing as best broker for a newbie, true. A good broker is good for all. I disagree that the best brokers do not offer bonuses. There are plenty of good brokers who do offer bonuses and have loyalty programs. It also depends on what you consider best broker. Most use the MT4 or MT5 platform. Spreads are one thing you can judge them by. I judge by customer service and security of my funds. Execution of trades is also part of it.


I agree

...
James_Bond

Member Since Jan 14, 2010  556 posts James_Bond Jul 11 2012 at 10:06
TheLastBear, you might be right about the bonuses, I simply always looked at it as a cheap gimmick used by bucket shops to lure newbies.

As to the customer service and security of funds, I agree very much, although the other begs the question - how do you determine the security of funds?

TheLastBear

Member Since Jul 03, 2012  186 posts TheLastBear Jul 12 2012 at 09:00
That is a good question and I do not have a great answer. What I do is I deposit a small amount into an account and trade, make a few more minor deposits and withdrawals and see how they are being handled. This is far from perfect, but the best I can think of.

Yes, there are a lot of bucket shops who lure newbies with great bonuses which is why I think it is important for traders to communicate and inform each other about those bucket shops and warn newbies. It is like a self policing environment.

Pax puts the X in Forex.
James_Bond

Member Since Jan 14, 2010  556 posts James_Bond Jul 12 2012 at 11:59

   TheLastBear posted:
What I do is I deposit a small amount into an account and trade, make a few more minor deposits and withdrawals and see how they are being handled. This is far from perfect, but the best I can think of.


That is some sort of testing, problem is that if the firm is going to bankrupt, you simply can't know when is it going to happen so this doesn't really matter what happened previously. I think a good way to check with their regulation and:
(1) Are the accounts insured?
(2) By who the accounts insured?
(3) Up to which amount are the accounts insured?

I don't really know though how many brokers have actually insured their accounts and I would bet not too many as that obviously incurs more costs on their end.

TheLastBear

Member Since Jul 03, 2012  186 posts TheLastBear Jul 13 2012 at 10:00
Right, if they go bankrupt there is no way to know when. My bigger concern is that they don't simply shut down and run away, but then again if they decide to do so there is no way of knowing when. I think it takes time to develop trust in your broker. Even if they are insured, if they run it will be a lengthy process to recover your funds.

Please tell me if you find a FX broker who actually insured accounts. I am not even sure that is possible as you are trading and this is not a bank account. I think if accounts are insured, traders who lose would file suits attempting to get their lost money back but I could be wrong here.

Pax puts the X in Forex.
James_Bond

Member Since Jan 14, 2010  556 posts James_Bond Jul 13 2012 at 12:58

   TheLastBear posted:
Please tell me if you find a FX broker who actually insured accounts. I am not even sure that is possible as you are trading and this is not a bank account. I think if accounts are insured, traders who lose would file suits attempting to get their lost money back but I could be wrong here.


I know that opening a forex account through a bank is definitely insured, although you then get the bank's rates which are mediocre at best (unless you trade very high volumes).

I search on Google and did find that citifx insure their accounts, you can find in this release (although it's from 2009, so not sure if it's still current):

https://www.citifxpro.com/sites/default/files/content/pdf/CitiFXPro_Dollar_Covered_By_FDIC_230209.pdf

TheLastBear

Member Since Jul 03, 2012  186 posts TheLastBear Jul 16 2012 at 10:38
Right, through a bank they will be insured but then again I use a bank to bank and a broker to trade :). Thanks for looking into it and sharing.

Pax puts the X in Forex.
lkwong

Member Since May 10, 2012  71 posts LK Wong (lkwong) Jul 17 2012 at 03:15
Have a look at Custodian Bank Services provided at Dukascopy. It seems as the funds are held at banks (your choice of 7 banks) in trust (not segregated accounts). Deposit accounts in Switzerland are insured to CHF100,000. These services are reserved only for larger accounts tho'...

TheLastBear

Member Since Jul 03, 2012  186 posts TheLastBear Jul 17 2012 at 09:59
That is an option. I am happy where I am right now with PaxForex and don't worry about it to be honest.

Pax puts the X in Forex.
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