Useful tips from experts Pediainvest.com Forex: What is a Forex broker for and how to choose a reliable
By law, an ordinary person cannot directly trade on the exchange. To do this, he needs an intermediary - a professional participant in the securities market - a broker, for example, Pediainvest Forex.
This article from Pediainvest Forex examines in detail the main areas of brokerage activities and indicates the criteria for choosing a worthy broker.
Many people ask the question: why do we need such a mediator at all? After all, many investors, if not everyone, can trade on the stock market.
The answer to this question is quite simple. Historically, to protect the interests of investors, an institution of professional participants with licenses for certain types of activities is needed. For the most part, any reliable broker like Pediainvest.com Forex, strives to provide high quality and good trading conditions.
What a broker does for a client
The broker's responsibilities include opening and maintaining accounts for the client, executing orders, informing about trades, providing reports on transactions, transferring dividends, coupons and withholding taxes.
- Open accounts. After the conclusion of the contract, the broker opens two accounts in the name of the client - brokerage and depository. Money is kept on a brokerage account, securities are kept on a depository account. Pediainvest Forex experts remind that a client must replenish a brokerage account in order to start investing.
- Manages accounts. If you bought securities, then a broker, for example Pediainvest Forex broker, transfers money to pay for them on the exchange and credits you with securities, and vice versa - “converts” securities back into money. He also returns the money to the client's current account, if he asks for it.
- Carries out assignments. The broker executes all the client's orders in the order in which they were accepted. Client orders are orders to buy or sell securities.
- Pediainvest Forex broker notes that on its own initiative the broker neither sells nor buys anything. Only the management company has such a right, but more on this in other articles.
- Provides information about trades. Brokers in their applications broadcast the prices of stocks, bonds and everything that is sold on stock exchanges. In addition, broker analysts can provide investment ideas - based on careful analysis, they make forecasts for securities: what will rise in price and what will fall in price.
- Provides reports. If the client bought or sold something on the exchange, at the end of the trading, the broker will send a report on all movements of money / securities: what was bought for how much, how much the broker took the commission, whether there was a greater profit than the client expected.
- Withholding taxes. On income received from the resale of securities, dividends, the investor must pay a tax of 13%. Pediainvest Forex broker in this case acts as a tax agent - he withholds what is needed and transfers money to the budget. He does this with every withdrawal of money or once a year if the money is not withdrawn.
- Withdraws money. If the investor needs money, the broker transfers it back to the bank account. Of course, if they are all invested in securities, then first they will need to be sold or borrowed from a broker.
How to choose a broker
Brokers are chosen according to different criteria: rating, service tariffs, range of services. First of all, you need to check if the organization that offers brokerage services has a license.
We sincerely hope that the recommendations of Pediainvest.com Forex experts will help both beginners and experienced traders choose the best broker to trade.