Brokers and Platforms
When you open a trading account you are extending credit to a company and accepting its execution practices. Spreads and bonuses are the least important part of that decision. Here are the questions a professional asks before transferring money, in the order they matter.
- 1Which entity will hold my money, and in which jurisdiction is it licensed? The group brand is irrelevant; the entity on the client agreement is what you have a claim against.
- 2Is client money segregated, and at which bank? Ask for the answer in writing.
- 3What compensation scheme covers this entity, and to what limit?
- 4What is the execution model for my account type — agency, principal, or a mix?
- 5What is the average spread on my main pair during my trading session, not the advertised minimum?
- 6What is the policy on slippage, and is it symmetric — do positive price improvements get passed on?
- 7Under what circumstances are orders rejected or requoted?
- 8What are the withdrawal timelines and fees, and are there conditions attached to any promotion I accepted?
- 9What happens to my positions during a liquidity gap — is there negative balance protection, and is it contractual or discretionary?
- 10How are swap and financing charges calculated, and when do they triple?
Verify the licence yourself
Every serious regulator publishes a public register. Search the entity name and the licence number from the footer of the website, and confirm that the permissions actually cover dealing in investments as principal or agent for retail clients. A licence for payment services or for a different group company is not the same thing, and this substitution is extremely common.
Test with money you can afford to lose
Fund a small amount first. Trade it for a month in your normal session. Then withdraw all of it and time the process. A broker that executes well and pays out in two days has passed a test that no review site can run for you.
Keep the evidence
- Screenshot the client agreement and the terms you accepted, with a date.
- Export your trade history monthly. Platform histories are not permanent.
- Record your fills against an independent price source for one week per quarter.
- Keep withdrawal confirmations.
None of this is paranoia. It is the same record-keeping any business does about its suppliers, and it takes about twenty minutes a month.
Your edge does not matter if your counterparty does not pay. Do the credit work before the trading work.
Written by Adrian Vestberg — former interbank FX dealer, now running a two-person discretionary desk.