5 Trading Strategies Every Trader Should Know

Regulation is the most important consideration for any beginner when choosing a broker. It is the first sign that you are dealing with a safer, more transparent, and reliable broker.

Financial regulatory agencies set standards and best practices that brokers must adhere to. These regulations are designed to protect traders by providing a transparent, ethical, and fair-trading environment.

Trading with a regulated broker also gives you a path of recourse if you have an issue with a broker. A case can be opened with the regulatory body, which will investigate and mediate the matter. With an unregulated broker, you will have no recourse, and often these brokers operate illegally in various jurisdictions.

Here are some of the key obligations of a regulated broker:

• Segregated Accounts

Regulated brokers are obligated to keep client funds in segregated bank accounts that are completely separate from their business operational funds. This way, clients’ money is protected in the event that a broker goes insolvent.

• Transparent Services

Everything that is offered by the broker needs to be stated and clear. For instance, any fees or commissions charged, or how funds are handled. In essence, information should be freely available with no obscurity or misleading details.

Regulated brokers are subject to regular checks by the relevant regulatory agencies to ensure that their services are fair and transparent at all times. Dodgy brokers may manipulate price feeds, charge extra fees, or even prevent traders from withdrawing their money.

• Best Mediation

Regulatory bodies are government agencies that have a mandate to protect traders and investors. As mentioned briefly above, if you ever encounter a problem with a regulated broker, there is a third-party arbiter whose obligation is to look out for your interest. You will have no recourse if you ever have an issue with an unregulated broker.

A trading platform is software that allows you to perform trading activities such as opening, managing, and closing your positions in the market. It is one of the most important things to consider when selecting an online broker.

A good Platform-Tutorials must be user-friendly and reliable and have all the features you need to conduct your trading activity effectively.

Some of the features to assess when considering a trading platform include:

·         Functionality

The purpose of a trading platform is to facilitate your trading activity. A good trading platform should have all types of orders:

• Buy/Sell market orders
• Pending orders
• Stop-loss and Take-profit orders
• Fast execution of all orders
• Plus, other trading functions such as automated and social trading

·       Accessibility

A good trading platform should allow flexible trading. You should be able to trade conveniently and reliably on both desktop and mobile devices.

·         Analytical Tools

A good trading platform will have sufficient analytical resources to help you perform both technical and fundamental analysis effectively. Analytical resources include:

• Charting tools
• Indicators
• News feeds
• A range of timeframes
• Graphical objects
• Economic Calendar
• And more

·         Tradable Instruments

A multi-asset trading platform will allow you to explore the huge and diverse opportunities available in the global financial markets. Even if you have a preferred asset class, trading different assets can add diversity to a portfolio and be used for risk management.

Some of the asset classes that you should be able to trade on a single platform include:

• Forex-Trading
• Stock-Market-Trading
• Commodities
• Indices-Trading
• ETF-Trading
• Bonds-Trading 
• Cryptocurrency-Trading

Trading conditions are the terms by which you conduct your trading activity through your broker’s platform. Trading conditions directly impact your risk level and reward potential in the market. Some of the conditions to assess in a trading platform include:

·         Leverage and Margin Conditions

Leverage is your broker’s borrowing facility that allows you to multiply your exposure in the markets. For instance, with leverage of 100:1, you can be able to trade a $10,000 position by putting down just $100.

Margin is the amount of your own money you need to put down to be able to trade a much larger position. Margin conditions that you need to be aware of include the margin call level and the stop-out level.  You may also want to consider a broker that offers negative balance protection, such as AvaProtect offered by AvaTrade.

·         Trading Costs

Trading costs directly impact the level of your potential profitability. Some of the costs you need to pay attention to include:

• Spread fees
• SWAP/Rollover fees
• Commissions
• And any other related charges such as account inactivity fees

·         Trading Hours

Online trading markets are typically available round the clock during weekdays. Some markets, such as cryptocurrencies, are even available 24/7. However, some assets have special trading hours, so their liquidity and volatility are impacted by the open hours of their local exchanges. Some markets are also closed or trading hours are adjusted during certain public holidays.

·         Trade Limits

Some brokers have specific limits on the minimum and maximum trade sizes. Knowing the trade size limits of your broker will help you decide whether the broker will be the right fit for your trading goals.

It is important to assess the trading tools and resources available from the brokerage firm. As a trader, you will need tools and resources to help you be a better trader.

A good broker will also have comprehensive and regularly updated educational resources such as eBooks, videos, and webinars, as well as expert market reviews and analyses.

There should also be handy trading tools such as trading calculators, risk management tools, and an economic calendar to help you trade more efficiently. At AvaTrade, traders can access exclusive trading resources such as AvaSocial and Trading Central. Lastly, access to a free and unlimited demo account to help you practice trading risk-free is essential.

The ultimate goal of your trading activity is to earn profits. This is why payment methods are a key factor to consider when choosing a broker. A good broker will have a good selection of safe, secure, and convenient payment methods. Most brokers typically support credit/debit cards, bank transfers, and popular eWallet options.

As a beginner, you may want to consider a broker with a relatively small initial deposit required while you learn and become comfortable with trading. You should also consider the processing times of your deposits and withdrawals. You should be able to start trading within a few moments after completing a successful deposit. A good broker will also ensure that the withdrawal process is hassle-free, so you are not kept waiting when it is time to enjoy your profits.

It is very important to choose an online broker with a professional, responsive, and understanding customer support team. In the fast and dynamic world of online trading, it is good to know that you can count on your broker to provide quick assistance whenever you need something.

When assessing customer support, consider factors such as:

• Communication channels - How to contact support, i.e., email, phone, live chat.
• Availability- customer service working hours.
• Languages supported- Is your preferred language supported?
• Quality – The support team should be friendly, polite, and knowledgeable.