3 Factors To Keep A Lookout When Choosing A FX Brokers In India

For people who keep abreast of the financial market, you would know the importance of choosing the right online brokers before ones start their trading endeavour. But for starters, certain factors may not be too self-evident, and if you don’t consider it well enough you may end up losing important benefits and paying expensive fees.

In this article, we will cover three factors you should always keep a lookout when choosing an online FX brokers in India.


Bad Actors And Scams

Forex trading is not a scam, and many people have managed to trade for a living after years of hard work and study. But there are many bad actors in the industry, and you would likely fall into one if you get lured into their unscrupulous marketing scams.

The question here is how do you then ensure that the brokers you choose are trustworthy, have your best interest in mind, and not a scam? All online trading brokers in India have to be licensed by the Securities and Exchange Board of India (SEBI) and will be given a license number authorised by SEBI. They will usually indicate it at the footer of the website, and you can check it against SEBI website to see if they do appear on their registered stock brokers list.

If you can’t find them on the page, then you should avoid using the brokers as you certainly do not want to park your money with a financial institution that you can’t rely on.


Expensive Trading Fees

There are many trading houses especially those that offer contract-for-difference (CFD) act as a market maker. They may not charge a direct transaction fee, but they profit from the bid-ask spread quote you. In the end, you may end up paying more than you would if you go for those who charge a trading fee.

Some of these brokers may also be a market marker, meaning they are the opposite party that takes your trade whether you buy or sell a security. The market marker gets to see you trade and they can trade against you. In other words, your losses are their profits.


Educational Material And Research

As the saying goes not all are equal and some are significantly better than others when it comes to educational material and research. Whether you like it or not you won’t make trading decisions because of your independent thinking. The quality of information you consume can have a drastic impact on your trading decisions, and ultimately, your P&L results.

A good broker should offer daily & weekly analysis, how-to instructional videos, and put huge emphasis on risk management since trading is a high-risk endeavour, and the last thing you can do is to think about how much profit you can make rather than the risk of you undertaking that would result you in a financial ruin.

Read Also : Powergrid won Silver awards at ET Government PSU Leadership & Excellence Awards 24