When choosing a broker for your trading account there are a whole host of different options. In this article, I shall discuss the different types of accounts and how to choose the one for you.
Note that whichever broker you choose. Make sure they are properly regulated. Do not choose a broker that has a bad reputation, do your research. Choosing the wrong broker can mean you can find you cannot withdraw your money, you’ll find it difficult to win trades.
Different types of Trading Accounts.
- STP stands for “Straight Through Processing” execution. In STP accounts the broker’s trading commission is included into the spread. STP spreads are variable and depend on the buy and sell orders available.
- ECN stands for “Electronic Communication Network”. This type of account provides its traders with direct access to other market participants via interbank trading prices. This network allows buyers and sellers in the exchange to find someone trading the market in the opposite direction.
- The standard trading account is the most common. Often this is run by trading desk who are taking the opposite of your trades. I do not recommend you choose this account. This means the broker is actually trading against you.
Check those conditions – those amazing offers
Be clear on what your account conditions are. Some brokers offer free money, you deposit £10 and they will give you £10 extra, don’t be fooled this kind of account often comes with some pretty strict terms, for instance, you can only withdraw profits if you deposit a certain amaount, you need to complete a certain number of trades. One broker we tested gave $5000 free! (amazing) but when you had made a certain profit demanded a $250 deposit and in fact froze the account until you placed it.
Our recommended broker is Vantage FX but please do your own research and find a broker that suits you with the appropriate trading account.
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