Best Exchanges 2022
A wide range of crypto exchanges confuses beginners with which one to go for. Even the advanced and pro trader looks for a reliable crypto trading and staking source. The investors require full proof security for their funds and want to restrain from any monetary loss when working with a platform. So, this makes every level trader vigilant in selecting any exchange, as this is, most probably, once in a lifetime decision. So, here we will guide you on what you must check out in a crypto exchange before making your first deposit to earn your fortune.
Many traders look for exchanges that provide a full range of crypto assets. However, this could not be the priority for every trader. Some exchanges are good with the coins that remain on the top in market capitalisation. Although crypto is a highly volatile trading asset, every crypto coin has a different magnitude of volatility. The traders classify different crypto according to their market volatility and then make trading decisions. Some traders opt to open an account with such exchanges that deal with top cryptocurrencies only.
On the other hand, the advanced and pro level traders want to diversify their risk to optimum and hence choose exchanges that offer a huge range of cryptocurrencies. Binance is one of the best exchanges that offers 500+ cryptocurrencies and offers an ultimate portfolio diversification opportunity.
Another notable thing that a trader must look for is the type of coins the exchange offers. Despite the same fundamental functionality, not all cryptocurrencies work identically. They have different use cases, technologies, and projects, making them more or less popular among the investors accordingly.
Different exchange offers different types of cryptocurrencies with different applications in sectors like payments, infrastructure, financial service, media, and entertainment. A good exchange is then called to offer coins and tokens with all use cases. Offering an NFT platform is an additive for an exchange.
Commission and Spreads
Today, many online brokers provide zero-commission trades in most listed stocks and exchange-traded funds (ETFs). This has drastically reduced the cost of investing and trading for ordinary individuals. These brokerages earn money primarily via “payment for order flow.” This entails routing customer trades straight to specialised trading businesses known as market makers, who essentially pay the broker for the chance to be on the other side of your trade.
A spread is defined as a difference between the bid price and the ask price for the trade. In FX Market, the bid price is the price you will get for selling a currency, the ask price is the amount you pay for buying currency. A broker might charge both a commission and a spread on a trade.
The spread might potentially be either fixed or variable. In the event of a variable spread, the spread will fluctuate based on how the market moves. A large market event, such as a change in interest rates, might cause the spread to change. This might either be favourable or unfavourable to you. If the market turns volatile, you might pay considerably more than you expected. Another point to notice is that a forex broker might have a different spread for buying and selling the same currency. In general, the brokers who are well-capitalised and interact with a number of significant foreign exchange dealers to receive competitive quotes often provide competitive pricing.
Top online brokers, we won’t say, offer you 100% free of cost trading because of the quality of the stuff they are providing to you. However, it varies for the account types and volume of trades you are doing. The best brokers charge a balanced commission and spreads, which seems negligible compared to the quality of services they provide.
Deposit and Withdrawal Fees
The online brokers generally offer debit/credit cards, e-wallets, and wire transfers for deposits and withdrawals. However, brokers also integrate deposit methods such as PayPal and cryptocurrencies to benefit traders anywhere. The best brokers facilitate the traders by providing multi-base currency such as GBP, USD, EUR, and JPY options for funding the account.
The best brokers do not charge any fee for funding the account. However, a handful of brokers charge withdrawal fees and have specific guidelines for withdrawal. For example, an Australian broker may charge withdrawal fees if the client resides outside the EU.
The trader may be charged with processing fees that the broker does not apply directly. This is generally a fess that the intermediary, like a bank or a financial institution, charges for providing the services.
The broker charges account inactivity fees if no trading activity is observed over a specific period of time. This time could range from 6 months to a year, while the inactivity fees could be between 10$-30$ per month. Brokers may also charge the one-time fixed account inactivity fees instead of a recurring monthly penalty. Before building a relationship with a broker, always clear from the support if the inactivity fees hurt the open positions. It will be a negative gesture for a trader if the broker compensates such charges with open positions.
It would be best to have various asset classes to diversify your portfolio. Most brokers come up with forex, stocks, indices, commodities, CFDs, and ETFs, while few, in addition, offer options and bonds for trading. The best brokers are the proponents of risk diversification and thus provide a complete range of trading instruments. Few top-notch brokerages also provide investment plans, saving accounts, and retirement plans.
Brokers either come up with 24/5 customer support or 24/7. The mediums of support could be live chat, email or telephone. Many brokers offer multi-lingual support services whose network spreads across the world. Brokers also offer a “Call us Back” feature on the website where the member will contact you on your given contact number and attend to your queries. There is an option for direct WhatsApp contact by many brokers. Whatever the medium they provide, it’s prudent to choose the broker who attends to your queries quickly and cooperates with you.
The best brokers have state-of-the-art customer service. Whether you are a corporate or an individual investor, you will be treated equally, and queries will be addressed in the right way.
The best brokers strive to make their trading platforms user-friendly, highly compatible, easy to navigate, and widely available. The designers of platforms make sure to build them in an understandable way for every level of trader. Generally, the broker offers proprietory, third party, web, and mobile trading platforms.
Every platform includes basic trading functions like placing the order, setting the limits, and fixing the take profits. At the same time, the advanced level brokers ensure the one-click availability of portfolio reports and easy access to price alerts. Best brokers also ensure maximum chart and workplace customisation enabling the traders to mold the platforms up to their own level of satisfaction.
Moreover, the platform’s mobile applications are designed for Android and iOS versions with minimum specs requirements. The best brokers ensure the availability to place complex order types like OCO, GTT, and GTC with mobile. Since a trader needs to work for longer hours, the platform designers use color combinations that one’s eyes can bear for longer periods. Every nitty-gritty is seriously addressed to make the platform usable for novice and pro traders.
Research & Education
It is a plus point for a broker if it offers educational material to beginner traders. Many brokers provide textual and graphical content to train beginner traders about investing and trading. Free seminars, webinars, and guidelines are given to help the traders in their careers. Moreover, a news section provides updates on the current happenings around the world, which potentially impact the trends of financial markets. An economic calendar is shared on the website most commonly to prepare for the key economic events. Consider the broker providing quality free educational material; however, if you can afford you can choose the premium educational material where successful and experienced traders will train you.
There are many brokers out there, but only a few have a banking licence, are listed on a stock exchange, and have publicly available financials. Of course, those with all such features are safer than those lacking such attributes.
Regulation is another thing that brings a sense of security and safety to a trader. Being regulated by any organisation does not ensure safety from loss. However, the regulating body compensates you with some of your money when your brokerage goes bankrupt, which seldom happens.
Furthermore, there are the following benefits of being associated with a regulated broker:
- Due to the regular supervision of the financial supervisor, a regulated forex broker follows the rules and regulations. This includes audits that have a tangible effect on the trader.
- Money laundering is a problem that plagues governments worldwide and is largely responsible for financing illegal activity. When trading with a regulated broker, traders are often required to provide documents such as photo ID and address proof.
The credibility of regulatory bodies depends on several factors, the most prominent of which is the jurisdiction it belongs to. The regulatory bodies belong to tier-1 countries and are regarded as tier-1 regulators.
Above all, the best broker from a safety perspective is considered the one with a banking licence, multi-regulated with tier-1 jurisdictions, listed on a stock exchange, and financials that are publicly available.
It is hard to find a broker with all greens because priorities differ from trader to trader. Generically, if a broker has the best safety, a wide range of trading instruments, nice platforms, tools, and sound educational material might cost you higher for the best service provisions. The infant brokers might offer you attractive fees and some welcome bonuses, but they might not be regulated and lack experience. So, while choosing the best brokers, you have to be vigilant and go for the one that balances out all aspects and has some suitable market experience with positive reviews.