Independent Investor is a financial trading information portal, publishing free advice on trading opportunities and techniques designed to improve the results seen by ordinary traders in the financial markets. Written to be accessible yet informative, the site benefits from a vast archive of educational content aimed at helping investors and traders improve their performance and enjoy better market results.
In addition to providing insights into more effective trading practices, Independent Investor also provides visitors with the chance to compare different brokers, their pricing and service levels, through impartial, unbiased comparison tables focusing on key trading criteria with constant updates ensuring they represent an accurate picture of what’s on offer.
Choose Your Trading Instrument
World of investing is complicated and challenging as it is, and strong financial knowledge and perseverance are key to success. We strongly recommend novice investors to familiarise themselves with financial spread betting, contracts for difference, share dealing and forex using our comprehensive guides.
It takes a lot of time and experience to learn to trade professionally, you have to consider the number of traders and the experience involved. It might sound impossible to achieve the success but it is not as difficult as one might think. This website strives to provide the most accurate and relevant information about trading and the options available. Learning is just the beginning then you’ll have to practice and eventually, you’ll meet your investment/trading targets.
How To Choose The Right Broker
Traders are increasingly choosing CFDs, forex, and spread betting to trade in the financial markets because of the leverage on offer. However, in order to safeguard the interest of the trader, it is extremely important that s/he trades using an appropriate brokerage firm that meets all the requirements. Choosing a wrong broker can often be counterproductive and result in losses even on winning trades. Hence, due diligence and appropriate care should be exercised in selecting a broker.
While choosing a broker for trading, it is important for the trader to research the factors discussed below so as to maximize his profitability. Ignoring the warning signs can lead to losses for the trader. Some of the factors that a trader needs to watch out for are as mentioned below.
Below is a short list of key factors that are considered to be important when searching for the best company, make sure you read latest broker reviews.
Commission And Financing Charges
It is also equally important to check out the commission / brokerage charged by the broker. A broker who charges an extremely high commission can cause the trader to incur a loss even on winning trades. Hence, it is extremely necessary for the trader to check up on the fees charged by the broker before selecting it.
Another important thing that a trader needs to be aware of is the amount of financing charges charged by the broker for providing the required margin to trade the derivative product. Most brokers charge a floating rate (normally linked to RFR) + a fixed rate. A trader should verify these charges before choosing the broker.
Tools Provided
A trader must also check out the tools provided by the broker such as trading platform, charting tools, etc. A faulty trading platform can result in incorrect execution of trades which can cause grievous problems. Also, value-added services such as charting tools, market commentary, mobile trading platforms and easy fund transfer can provide a better trading experience.
Service And Support
Another factor that a trader must watch out for is the quality of service and speed of support provided by the broker. As the broker selected by the trader will be handling his money, it is extremely important that the broker be prompt in responding to the trader’s queries and also provides the service to the trader’s satisfaction.
Safety Of Funds
The trader must also ensure that his funds kept with the broker are safe. Forex, CFDs, and spread betting are extremely leveraged and risky products, and there is a possibility of the broker going bankrupt if it doesn’t have proper risk management systems in place. Hence, the trader should ensure that the broker has adequate systems in place to ensure safety of the funds invested.
It is safe to say, that not spending the time doing due diligence can have detrimental results and may lead to total loss of one’s capital. Once the trader has considered all of these factors, they must also feel confident in the broker selection.
Greater Diversity For A Better Risk Management
Traders should consider diversifying their positions across different markets and sectors, in order to spread the market risk of taking exposure to CFDs and to offset the threat of a total account collapse.
Choosing to trade smaller positions over more numerous positions is a common strategy for sharing risk across a portfolio and across different markets, as an attempt to insulate portions of capital through unrelated, unlinked investments in the assumption that while one or two might fail, the odds of more positions turning against the markets simultaneously are lesser. This allows traders to dampen the risks of being exposed to the market, particularly with such high leverage, in order to build a more secure, stables trading account for long-term returns.
While too much diversity can make a portfolio unmanageable, spreading the risks to your capital across different, isolated positions can be a better way to manage the odds in your favour.
Diversification almost always means strength from a risk management point of view. The idea of putting your eggs in one basket and why that’s a bad thing is well versed, yet it is no less applicable in the event of derivative products, and those that spread their financial eggs over a wider base of positions can expect lesser risks and a smoother path to achieving capital growth on aggregate. More diverse portfolios, within reason, tend to outperform those that choose a narrower base for investment, particularly when analysed over the long-term.
On this portal, you’ll find extensive resources and materials on how to effectively diversify your trading account, and how to make the most out of the opportunities available to you; the materials are designed to help make it easier for traders to introduce the right mix of risk management into their portfolio, and to understand both the principles and practices which make diversification work as a trading aim. You can also use this list of forex and CFD forums to talk to fellow traders and learn more.
For those who are into forex trading and internet marketing we have a section where you can learn about forex affiliate programs; which brokers offer CFDs and spread betting.
Independent Investor is an online investment and financial market guide, written by experienced traders to share insights and tips for greater success. Covering the basics of getting started and how to trade in Forex, CFDs, share dealing, spread betting and a number of other different trading types, and shares strategies and techniques ranging up to advanced technical analysis in order to provide traders with access to the materials they need to further their portfolio. Comparing brokers is an important part of establishing a profitable trading account, and we helps traders find the most competitive terms on trading commissions from across the industry.