Choosing a Online Broker

With hundreds of online brokers to choose from traders might not know which crypto broker to choose. A trader may not know which factors to look for when selecting their broker, this tutorial will explain to traders more about brokers and what factors traders should consider before deciding which crypto broker to open an account with.

In bitcoin trading there is no central market where trades are settled, instead trades are carried out in an Over The Counter market. Because there is no central market place trades will be settled in the online inter bank market. This online interbank market is composed of a network of big banks. For traders to gain access to this market they must trade through a online broker. The broker will place trades in the interbank market on behalf of the traders.

Traders cannot trade directly on the inter bank market because they do not have the capital to setup the technology for doing this neither do they have the required minimum capital that is required by the big banks to allow them to trade directly in the btcusd market. For this reason retail brokers exist so that to connect retail traders to the online inter bank market. Retail brokers will allow traders who don't have a lot of capital to trade in the btcusd market.

Crypto brokers also provide bitcoin leverage so as to help traders to open trades with borrowed funds. Because crypto lots are traded in units and most retail traders cannot afford this, the brokers provide this bitcoin leverage so that traders with little capital to invest can also be able to trade the btcusd market on borrowed fund. The borrowed funds are borrowed from the online broker, a broker providing cryptocurrency leverage of 5:1 means that traders can borrow up to 5 times their capital, therefore a trader with only $1,000 can borrow up to 5 times which means $1,000 multiplied by 5 is $5,000, this $5,000 will be the capital that is available to the trader after using leverage & henceforth the retail trader who only has $1,000 dollars capital can now trade standard lots.

Factors To Consider When Choosing Your Crypto Broker

The following factors should be used to figure out which crypto broker you will select to trade with.

Regulation - The first thing to consider is broker regulation license. You should only open an account with a broker that's regulated. In bitcoin trading the most reliable and most transparent brokers are the ones which are regulated. This is why this is the first thing that most traders will look for before they even start considering whether to open an account with a particular crypto broker or not.

Withdraw Policy - Try to find out the withdraw policy of a online broker before opening a trading account with them. Best withdraw policy is one where you can withdraw your money any time you as the trader want without any questions asked. This policy should also provide that the withdraw should be instant if you are using a credit card to withdraw or should take 1 business day if you withdraw using bank wire method

Execution Policy - the best execution policy is a no requotes execution policy where orders are executed within one second or less. This means that as a trader you can open and close trades quickly and your trade positions should be requoted. A requote means that you'll have to place a trade transaction again once the trade is requoted. A requote will happen if the execution of your crypto broker is not fast enough which means that the bitcoin quote will change before you've completed putting your trade & therefore you have to make another trade.

Bitcoin Quotes - traders should choose a broker that provides a wide range of trading instruments that they can choose to trade. In addition to bitcoin crypto, traders might choose to select broker that offer other trading instruments for trading such as commodities, CFDs, Futures, Metals such as silver and bitcoin and stock indices.

Bitcoin Software - choose a broker that uses MT4 platform. Almost every online broker uses this software. As a trader make sure that the platform of the broker you select allows automated bitcoin trading especially for those traders that trade with automated bots.

A trader may also use other factors to decide what broker to open a trading account with based on the preference. On this website traders also can find a list of the top 100 crypto brokers on the broker ranking section of this website & traders may use this list to find the online broker of their choice.

Get More Lessons:

Trade Bitcoin Trading

Choosing a Online Broker

Factors To Consider When Choosing Your Crypto Broker