10 Things to Check Before Opening a Trading Account

How to choose a broker, or a crypto platform, is less about finding the flashiest app and more about ruling out the ones that could hurt you. The checks below apply to forex and CFD brokers, share-dealing platforms and crypto exchanges alike. Run them in order: if a firm fails one of the first four, stop there. PyxelTrade does not recommend or rank any firm, and we have no referral arrangements, so treat this page as a method rather than a shortlist.

Why this site has no top forex brokers list

A top forex brokers list or a "best exchange" table looks helpful, but it has two built-in problems. First, many such lists earn money for every account opened through them, which rewards the highest payer rather than the safest firm. Second, the right firm depends on where you live: a broker authorised in one country may be unauthorised, or may place you with a lightly regulated overseas arm, in another. A checklist travels better than a ranking.

The ten checks

1. Is the firm authorised to serve you?

Search your own regulator's public register: for example the Financial Conduct Authority in the UK, ASIC in Australia, or the national authority in your EU country. Crypto platforms may appear on a separate list or licence regime. A firm licensed only in a distant jurisdiction is not authorised to protect you at home, even if its website says "regulated".

2. Is it really that firm, or a clone?

Scammers copy the names, licence numbers and even addresses of real firms. Take the phone number, email domain and website address from the register entry, not from the site you were sent, and check they match. Most regulators also publish warning lists of unauthorised firms and known clones.

3. Which company would you actually contract with?

Large groups often run several legal entities in different countries. The account-opening screen or the terms of business name the entity that will hold your money. Make sure it is the regulated one you checked, and not an offshore affiliate offering higher leverage in exchange for weaker protection.

4. How is your money protected?

Look for clear statements on segregated client money and assets, any compensation scheme that applies, and, for leveraged products in the UK and EU, negative balance protection. For crypto platforms, ask whether customer assets are held separately from company funds, how much is kept offline, and whether the platform publishes any evidence of its reserves and liabilities.

5. Which products and leverage are offered to you?

Retail leverage in the UK and EU is capped: 30:1 on major currency pairs, 20:1 on gold and major indices, 5:1 on shares and 2:1 on crypto CFDs. If a firm offers you hundreds-to-one as a retail client in those regions, it is either not the regulated entity or not playing by the rules. Also check whether futures, margin lending or "earn" products are switched on by default.

6. What does a complete round trip cost?

List every charge: spread, commission or trading fee on each side, overnight financing, currency conversion, deposit and withdrawal fees, and inactivity fees. Our guide to trading fees explains each one.

7. How do deposits and withdrawals work?

Read the withdrawal rules before depositing: minimum amounts, processing times, any limits for new accounts, and whether funds must return to the method they came from. For crypto, check which networks are supported for USDT and Bitcoin withdrawals. Once your account is open, a small test withdrawal early on is the most honest check of all.

8. Is the platform usable and transparent?

A demo account lets you test order types without money. Look for stop-loss and limit orders, a clear order-execution policy, and published information on slippage. On crypto platforms, check whether order books are visible and whether trading pairs have meaningful volume.

9. How secure is the account?

Two-factor authentication using an app or hardware key, withdrawal address allow-lists, login alerts and a delay after security settings change are all good signs. So is a published process for reporting a compromised account.

10. What happens when something goes wrong?

Find the complaints procedure and whether an independent ombudsman or dispute service covers the firm. Read the terms on account closure and on what the firm may do in extreme market conditions. If you cannot find these documents, that tells you something.

Extra checks for crypto platforms

Crypto platforms raise questions that share brokers mostly do not. Add these to the list when the firm will be holding coins for you:

• Reserves and liabilities. Some platforms publish a proof-of-reserves report. Check whether it also counts what the platform owes customers, who prepared it and how recent it is. A snapshot of assets alone proves little.
• Storage. Look for a description of how much customer crypto is held in offline cold storage and how withdrawals from it are authorised.
• Network support. Confirm the networks available for each coin you plan to use, for example Tron and Ethereum for USDT, and the fee for each.
• Listing standards. A platform that lists every new token within days is taking on risk that may end up being yours.
• Lending and yield. If coins you hold may be lent out or used in "earn" products, find out whether that needs your consent and what happens in a failure.

Keep a one-page record

For each firm you consider, write down: the legal name, the register reference and the regulator; the entity named in the terms; the full cost of a typical round trip; the withdrawal rules; and any red flags. Comparing two or three of these sheets side by side is far more revealing than any advert, and it gives you a record of what the firm told you if anything changes later.

A worked cost comparison

Here are two made-up brokers, labelled A and B, quoting EUR/USD. The figures are illustrative, not typical of any real firm.

The "no commission" broker costs more here, because the fee is built into the spread. The lesson is not that commission accounts are always cheaper; it is that you should convert everything into money per trade before comparing. The pip calculator helps with pairs where one pip is not worth $10.

Red flags that end the search

• Guaranteed or fixed daily returns, or "no-loss" strategies.
• Bonuses that lock your deposit until you trade a large volume; see our guide to forex bonus offers.
• An "account manager" who calls repeatedly, urges bigger deposits or offers to trade for you.
• Requests to pay a fee or tax before you can withdraw.
• Contact that began on social media, a dating app or a messaging group.
• A web address registered recently, or a name that differs slightly from a known firm.

More warning signs are collected in how to spot trading scams.

Sources

• UK Financial Conduct Authority, Financial Services Register and warning list
• European Securities and Markets Authority, CFD product intervention measures
• Australian Securities and Investments Commission, professional register search