The opportunity of being a participant in the global financial markets is a precious one. In our times, with the advent of online trading platforms, it’s much more readily available than ever before. The real challenge lies in sifting among the many brokerages you’ll encounter upon doing a Google search, each of which confidently advertises its own superiority.
In this article, we’ll pinpoint three qualities a broker should possess in order to be worthy of your business. The aim is to assist you in finding the trading platform that fits you like a glove, and that brings out the best in you. No legitimate brokerage can claim to offer you a sure path to success because that’s up to your own diligence and hard work. What they can do is create the conditions in which successful trading happens. It’s certainly worth your time searching for the ideal brokerage, so take the first step by joining us now for a couple of minutes.
Demo Account
There’s a saying in the theatre that a bad dress rehearsal means a successful opening night. The reason for this is that, through running into obstacles during that late-stage practice, performers realize what needs to be fixed. The dress rehearsal is crucial for the actors to get used to wearing their costumes and working with their props so that everything goes smoothly on the big night. Without the dress rehearsal, all the conditions of the live performance would be totally new to the actors, and this would fluster them.
A demo account is the equivalent of a dress rehearsal in online trading. You may have done your homework, diligently reading up on the financial markets and their instruments, or even training yourself in the methods of technical analysis, but there’s still a bridge to cross – the one between theory and practice. There is something that old-time traders possess that newcomers just don’t, and it’s the result of plenty of real-life experience. If you haven’t yet got this under your belt, a demo account can be a very good, if imperfect, substitute. Demo accounts simulate real trading conditions, allowing you to open and close deals based on live market data, set stop loss orders, and test out strategies. This can be of use to the experts too when they want to trade in unfamiliar markets or from a new platform.
Real-Time Quotes
If you get your price quotes from the standard financial websites, you may be seeing data that’s 15 to 20 minutes old. If you’re dealing with a fast-moving asset, this is basically useless. Take, for example, the EUR/USD forex pair, which experiences an average volatility of 0.47% in the 11th hour of the trading day. To successfully trade with this pair, you’ll need to be sure that the prices you’re seeing are fresh.
Indeed, the IMF (International Monetary Fund) writes that financial assets’ prices have grown more volatile in recent times. One reason is that they tend to undergo shocks when geopolitical events occur, since those events are not properly priced into them. In other words, “asset prices may not fully reflect the potential impact of wars and trade disputes”.
Whatever the reasons are for the increased price volatility we’ve been seeing, online traders need to find the most effective ways of dealing with it. If your platform is equipped to send you a reliable stream of live quotes for your instruments, you’ve made a substantial step in the right direction.
Technical Analysis
You definitely want your brokerage to offer you the tools to do technical analysis because they make it possible to trade in a simpler, clearer fashion. With many hours of research to back them up, these tools can help you identify the key trend that’ll be driving your asset’s prices down the line. As a result, you can plan your deals and manage your risk with greater precision, reaping the utmost from that trend when it shows up.
The secret power behind technical analysis is that it incorporates behavioral economics into your trading decisions. This is the study of human conduct in situations involving finance, and it’s much deeper and more complex than you may think. For example, research indicates people don’t, in fact, decide on things rationally, but emotionally. Factors like cognitive bias, herd mentality, and loss aversion colour our views of facts, which never appear to us in their cold, hard realities. Technical analysts account for this by basing their approach on historical trader behavior, which is carefully studied and then presented in the form of chart patterns that offer actionable signals.
Wrapping Things Up
Ensuring your brokerage offers these three things is a good start to setting yourself up for trading success. That’s because these innovative tools, when used correctly, have the power to give you that extra edge you need to come out on top in your trades. Remember that the true benefits of working with a demo account and using technical analysis come with consistent practice, not a single burst of effort. Every failure you undergo on the way really constitutes a valuable lesson for the future, in the way of a dress rehearsal in the theatre.
One brokerage that all traders should consider using is iFOREX – an established presence in the industry for over 25 years. iFOREX keeps its clients on the cutting edge of financial trading technology, offering all three of the tools we have mentioned and many more. Visit the iFOREX website to find out about their unique, home-built trading platform, the long list of instruments they offer, and their attentive customer support.