When choosing a financial broker your decision will be influenced by a wide range of factors. The first of these of course will be cost and accessibility. On the second point, the internet means that all major brokerages have a global reach, and where the company is based is of less concern than it once was. However, some brokers are only licensed to operate in certain territories, so when choosing an online broker one of the first things you should do is check whether they are able to trade in your country.

There are also advantages to having a broker based in your home country though, and even in the city where you live. London is one of the main financial centres of the world, and London-based trading companies have a reputation for fairness, competiveness and honesty. Even if you are not actually based in London there are many good reasons to choose a broker that is based there.

Brokers based in London (and indeed the rest of the UK) must adhere to strict regulations and meet stringent standards, which means that your money is safer with them than with companies based elsewhere in the world where the rules may be more lax. A genuine financial broker in London will be approved by the UK’s Financial Conduct Authority (FCA).

London financial brokers are also close to where the financial action is, particularly if you are trading on the London Stock Exchange. London is also a centre for forex trading and for markets in a wide range of commodities and assets. As such it has a wealth of different brokers to choose from when you’re looking to buy and sell on one of the different financial markets.

Multiple markets

Exactly which market you are looking at will certainly affect your choice of broker as not every company deals in every form of financial asset. One of the leading multi-asset brokers in London is City Index, which offers forex trading, CFD trading and spread betting. Their custom trading platform can be accessed via your City Index login and offers many unique specialised features, including price tolerance, HTML charts and research tools.

London Capital Group has been trading out of the city for over 20 years and allows a wide-range of asset trading on its custom platform, LCG Trader. With relatively low fees and minimum spreads they are understandably popular, though online reviews suggest that their customer service has room for improvement.

Levels of service

Brokers can be divided up into categories according to the level of service they offer as well as the markets they trade in. Financial brokers can be described as either discretionary, advisory or execution only. A discretionary broker has the ability to buy and sell on your behalf and also to make investment decisions for you without your prior approval; in other words, they offer a full portfolio management service in return for a regular fee. As well as costing more this option requires you to put a large degree of trust in your broker. Nevertheless this may be the best option for a novice investor with a significant amount of capital.

An advisory broker will buy and sell according to your instructions and will also provide financial advice, usually for a fee. Smaller firms are more likely to offer individual advice than bigger ones, although it’s worth noting that expert advice is one of the extra features offered by City Index, above.

Finally an execution only broker will simply execute your instructions to buy or sell and will not offer advice, although their website may still include educational resources and how-to guides. This is the most common form of online brokerage and the most popular, as it costs the least and is simple and easy to access.

Frequency of use

Another question you should ask when choosing a broker is how often will you be using their services? Many brokers in London and elsewhere charge an inactivity fee, while frequent traders are generally charged at a more favourable rate. That said, you should choose your broker according to your needs and not try to adapt your trading habits to what your broker encourages. Over trading in the hope of avoiding fees could be a false economy if you invest more than you can afford or eat into your returns.

London is one of the best cities in the world for choosing a broker, and the list of options is very long. Large, well-established companies are generally safer but every investor’s needs are different. You are sure to find the broker that’s right for you in London if you ask the right questions and research thoroughly.

When you start your Forex trading journey, you will likely be swarmed with dozens of different trading methods. There are plenty of indicators available with compelling introductions, like learning algorithmic trading strategies, which can leave you confused as which trading idea is the best.

If you are stuck amidst options, this article may be useful to you. Below are the 3 most useful indicators in Forex trading.

1. Moving Average

The Moving Average is a trend-following indicator used by almost all Forex traders. Displayed on price charts as a line, it shows you the average price of an asset for a specific period of time.

The Moving Average’s main functions include:

• Smoothening the price action
• Identifying support and resistance levels
• Determining market trends
• Identifying changes in market sentiment

The Moving Average can work as an independent trend detecting tool or can be combined with an oscillator to create a complete trading system. In addition, you can use multiple Moving Averages to determine trends more accurately.

2. Relative Strength Index (RSI)

First introduced in 1978, the RSI is an oscillator (also known as a leading indicator) invented by a mechanical engineer named J.Welles Wilder. The indicator has quickly become famous for its accuracy and is now one of the most commonly used tools in Forex trading.

The RSI is represented by a line that moves in a range from 0 to 100. This indicator was originally designed to identify overbought or oversold conditions of an asset.

• When the RSI line crosses above 70, the price of the asset is considered overbought. That indicates upcoming downward reversals.
• When the RSI line turns below 30, the price of the asset is considered oversold, and that signals upcoming upward reversals.

As time progressed, traders have figured out more methods to use this indicator, such as:

• Determining trends
• Finding divergences
• Confirming trends (when the RSI is combined with trending indicators

The RSI can work in many different market conditions; however, as an oscillator, it’s most useful when the market is ranging.

3. Average Directional Index (ADX)

The ADX is a very comprehensive indicator. Not only can it help traders identify market trends, but it can also help with determining trends’ strength.

The ADX has the following components:

• An ADX line, running in a range from 0 to 100. This line shows the trend’s strength.
• Two Directional Movement Indexes (DMIs), including +DI and -DI. These two lines are used to identify the market trend.

Traders often use the ADX in the following way:

• First, they use the DMIs to determine trends. When the +DI line is above the -DI line, the market’s trend is considered bullish. Conversely, when the -DI line is above the + DI line, the market’s trend is considered bearish.
• Next, they use the ADX line to determine the trend strength. A trend is considered tradable when the ADX is above 25.

The ADX works best in trending conditions.

Conclusion

Above are the 3 most useful indicators in Forex trading. As you can see, these indicators belong to different classes and have their own advantages.Therefore, which one you should use will depend on your trading style. You can also combine these indicators together to create a comprehensive trading system. To learn more about forex indicators, Easy Markets provides a series of articles that cover this topic in more depth.

Whether you are looking to gain some extra cash, or even look for a new career, trading has exploded in popularity over the last few years.

It has now become more accessible than ever and whether you are trading CFDs or more “standard” options, there is a lot more potential to turn a profit.

Of course, whenever there is profit potential, there are also possibilities to lose money. As a beginner, the risks naturally increase, and this is what today’s article is about.

We have compiled a list of some of the more common mistakes that are made in the world of trading by beginners, to give you the best possible chance of coining a profit during the early days.

You follow the crowds

Sure, there must be a reason why everyone is investing in a particular stock, but by the time you have jumped on the bandwagon there’s every chance that it is too late. Usually, you’ll be paying through the nose for such stocks, and that good investment will have actually become very expensive.

There’s no doubt that trends are there to be followed, but at the same time it’s important to know when they become too crowded. As a beginner, it can be difficult to gauge this and as such, this is a strategy we would strongly urge against.

You follow the tips

Similarly to above, another primary error is to listen to tips. The very worst thing that can happen in these cases is that you actually profit from one of your first tips – as this will just encourage you to do it more often. Suffice to say, over time this tends to be a losing strategy.

Each trade should be made on merit and you should understand all of the math. It might be tempting to act on a tip from the television, but if one were to analyse the success rates of these it would quickly become apparent that this is not a successful, long-term strategy.

You forget the hidden fees

Whether it is tax or brokerage fees, don’t forget to build these into your trading plan. In relation to the former, you can get a tax break on some investments, but it doesn’t include everything and in no time at all your profits can be wiped out. The same rules apply with fees and this is one of the reasons it is crucial to shop around when looking for a broker.

You use too much margin

This final mistake is probably one of the most technical; but you need to be warned. In some cases, margin is something that works like a charm. After all, this is the thing that can allow you to maximise your profits by effectively “borrowing” money.

Well, let’s not forget the opposite side of the coin. Margin is also something that can inflate your losses and as a beginner, this is probably an even more important point to note.