What to look for in a broker
When you first start trading forex, which broker to use is one of the most vital decisions you will need to make. The extensive options can cause you to become overwhelmed, thus narrowing down the brokers according to their particulars is a great way to start. Here are the factors that you should consider:
· Choices of investment
This refers to the type of investment you wish to partake in. Brokers do not always offer the full range of investment options; thus it is important that you know what you want to trade and the broker you choose offers it. This could be ETFs, Individual stocks, Mutual funds, bonds, etc.
Essentially, your main goal of trading is to earn money. A commission is a fee that you will pay when you make a trade. It is important that you choose a broker that has low commissions or one that has chosen to join the zero-commission movement in order to receive the most return possible.
· Extra fees
Sometimes commissions are unavoidable, however, many brokerages do not charge extra fees and can be avoided. These may be annual fees, inactivity fees, and withdrawal/funding fees. Again, choosing a broker without these will ensure that you receive maximum returns.
· Affordable funding
The minimum deposit that a broker requires varies according to brokerage. It is best, especially as a beginner, to find a broker that has an affordable minimum deposit.
· Educational resources
The ideal broker will provide educational resources to assist you with trading. This could be third-party research or performance analysis of various trading instruments. Although you can access these resources through your own research, having them available on hand is more convenient.
· Easy access
It is best that you are always able to access your trading account. Using a brokerage that has a mobile app and a reliable website is important.
Overview of Eightcap
Eightcap is an average-risk broker that was established in 2009. It is suitable for trading forex and CFDs. Their educational resources are limited compared to other leading brokers. However, Eightcap does offer very low spreads which can benefit your trading experience. They offer both MT4 and MT5 trading platforms.
One of the most important questions is: Is Eightcap safe?
Eightcap is relatively safe (average-risk). They are regulated by the ASIC which is a tier-1 regulator. They also hold an AFSL. Their trust score is 69/99. This means trading with Eightcap is not risky, however other brokers with a higher trust score and more regulators may offer a safer trading environment.
Spreads and Fees
Like other brokers, Eightcap also takes a fee from the spread. However, the fees you pay is dependent on the type of account you choose to open. With the raw account, you can expect low spreads with a commission of $7 for every standard lot traded. The standard account, however, does not have any commissions, but a spread mark-up is present.
Extra fees are not charged by Eightcap. This means there are no account maintenance fees of inactivity fees. The minimum deposit is also very affordable at only $100 for both accounts.
The leverage on both accounts can go as high as 500:1.
The customer service at Eightcap is available 24/5 through email, live chat, and telephone. This is very minimal in comparison to other top brokers which supply much more in terms of customer service.
Type of investments available
There are 42 forex pairs available to trade. These are the major, minor and exotic forex pairs. Physical cryptocurrencies are not offered by Eightcap. The forex pairs offered by this broker are lower than others. Commodity CFDs are limited to metals and energies. Index and Stock CFDs only include Japanese and German shares. Overall, the investments that Eightcap offers are much less than what you can access through other brokers.
If you are considering social or copy trading, this is a feature offered by Eightcap.
The research provided by Eightcap is very minimal. The primary form of research provided is written updates their in-house staff and YouTube videos that correspond with said updates. The Market Update and Market Focus will choose which assets should be further analyzed to produce an outlook on the following week’s markets.
Eightcap does not use any third-party research which makes them rank quite low compared to other brokers.
Education is a vital part of trading, unfortunately, Eightcap does not have a strong focus on this aspect. For CFD trading they only have 7 videos available and less than 10 for forex. These exclude platform tutorials. Educational articles are also minimal. The only other educational resource that they provide is an Investor Dictionary.
Eightcap is a MetaTrader-only broker. Users are able to download MT4 or MT5 on their android or IOS Apple devices. This is a great feature as it allows you to access the market at any time. However, there are no features that make Eightcap stand out from other brokers with regards to their platform offerings.
As far as the web-based versions go, only MT5 is available. This can have a negative impact on a trader if they prefer the MT4 platform. There are no extras regarding their platform and tool offerings.
Trading with Eightcap
As mentioned before, Eightcap has very tight spreads. There is a high level of transparency when it comes to the price you pay for the execution of trades. The minimum deposit is low, minimum trade requirements are smaller and there are no commissions on trades. This can make your trading experience pleasant.
Opening your account with Eightcap is fairly simple. Of course, there are a few compliance checks that one must pass in order to be allowed to trade. You may need a copy of your national ID/driving license/ passport as well as proof of address. The compliance questions should take about 10 minutes. After this quick process, you will be able to access the platforms, but only able to trade once you pass the compliance.