10 Things to Check Before Opening a Trading Account

How to choose a broker is less about finding the "best" one and more about ruling out the ones you should never use. RavixPrime does not review or rank providers, and we are not one; what follows is the checklist we would apply ourselves, in the order we would apply it. It works for forex and CFD brokers, share-dealing platforms and, with a few changes flagged below, crypto platforms.

1. Is the firm authorised where you live?

Short answer: look the firm up on your own regulator's public register, not on the firm's website.

Regulators such as the UK Financial Conduct Authority, the Australian Securities and Investments Commission, EU national authorities and, in the US, the Commodity Futures Trading Commission and National Futures Association keep searchable registers. Search by firm name and by reference number, then compare the website address, phone number and email listed there with the ones you have been given. Scammers often copy a real firm's name and licence number onto a different domain, so a matching number alone proves nothing.

2. Which legal entity would hold your account?

Many trading brands run several companies in different countries. A group might have a tightly regulated entity for UK or EU clients and an offshore entity, with higher leverage and weaker protections, for everyone else. The client agreement and the website footer will name the company you would contract with. Make sure it is the regulated one you checked in step 1, and be cautious if you are steered towards an offshore entity "to unlock better conditions".

3. How is client money protected?

In regulated markets, firms must keep client money in segregated accounts separate from their own funds, so that it is not used to pay the firm's creditors if it fails. Some countries add a compensation scheme that pays out up to a limit when client money is missing. Find out whether a scheme applies to your entity and your type of account; it usually does not cover trading losses and often does not cover crypto at all.

4. Do the retail protections apply to you?

Under UK and EU rules, retail CFD clients receive leverage caps, a margin close-out at 50%, negative balance protection, a standardised risk warning and a ban on bonuses. Some firms invite clients to be reclassified as "professional", which removes most of those protections in exchange for higher leverage. Reclassification is supposed to require genuine experience and substantial assets; being encouraged to "just tick the box" is a warning sign.

5. What leverage is offered, and why?

Leverage well beyond the caps described in our margin calculator guide, such as 500:1 or 1000:1 to retail clients, tells you the firm operates outside the major regulatory regimes. That may be legal where it is based, but it also means the protections in step 4 are unlikely to exist. High leverage is not a feature to shop for; it is a measure of how quickly an account can be emptied.

6. What does it really cost to trade?

Ask for the full schedule: typical and minimum spreads, commission per lot, overnight financing or swap rates, currency conversion fees, inactivity fees, and charges for deposits and withdrawals. Compare providers on one realistic trade rather than on headline numbers. Our guide to trading fees explained shows how to add these up, and why "zero commission" often means a wider spread.

7. How does the firm execute your orders?

Some brokers take the other side of client trades themselves, a dealing-desk or market-maker model; others pass orders to outside liquidity providers and charge commission. Neither is automatically bad, but the firm must disclose how it handles conflicts of interest and publish its order execution policy. Read the policy's sections on slippage, requotes and what happens around major news releases.

8. Can you withdraw without friction?

Read the withdrawal terms before depositing. Legitimate firms return money to the source it came from, verify your identity once and state processing times. Warning signs include withdrawal "taxes" or "release fees" that must be paid first, requests to deposit more before a withdrawal can be processed, and terms that let the firm cancel profits at its discretion. Any of these deserves a search of your regulator's warning list.

9. What platform and account information will you get?

You should be able to see every trade, charge and financing adjustment in a statement you can download. Many forex brokers offer third-party software such as MetaTrader alongside their own platforms; the software is the same everywhere, but the prices and execution come from the broker. A demo account is useful for learning the platform, but demo fills are often better than live ones, so do not judge costs from a demo.

10. Where would you complain?

A regulated firm must have a written complaints procedure and, in many countries, an independent ombudsman or dispute scheme you can escalate to if the firm's answer is unsatisfactory. If no route outside the firm exists, your options when something goes wrong are limited to the firm's goodwill or the courts of its home country.

How to choose a broker when it is a crypto exchange

Most of the checklist still applies, with three additions. First, confirm whether the platform is registered or licensed for crypto services in your country; rules such as the EU's crypto-asset regime and national registration requirements now cover many platforms, but not all. Second, ask how customer assets are held: in segregated wallets, with a third-party custodian, or pooled with the firm's own. Some platforms publish proof-of-reserves reports; these show assets at a moment in time, and are only meaningful if liabilities are covered too. Third, check withdrawal limits and which networks are supported, since a platform that cannot send USDT on the network you need adds cost and risk. Our pages on how crypto works and USDT explain why custody matters so much.

Why start with a small test?

Even after every check passes, the first deposit can be a small one. Fund the account with an amount you would not miss, place a few trades of minimum size, and then request a withdrawal back to the same payment method. Note how long it takes, what documents were requested and whether any fee appeared that was not in the schedule. A provider that handles a small withdrawal smoothly is not guaranteed to handle a large one the same way, but one that makes a small withdrawal difficult has told you most of what you need to know.

Keep your first positions small for another reason: live prices, fills and swap charges can differ from what you saw on a demo, and it is cheaper to find that out with micro lots.

What should I record before depositing anything?

• The regulator, register entry and reference number, and a screenshot of the register page.
• The name and country of the legal entity in your client agreement.
• The cost schedule and withdrawal terms as they stood on the day you joined.
• The official domain and support email, so you can spot impersonators later.

If an offer arrived through a message, advert or social media contact rather than your own search, read how to spot trading scams before going any further.

Sources

• UK Financial Conduct Authority, Financial Services Register and CFD rules
• European Securities and Markets Authority, product intervention measures on CFDs
• Australian Securities and Investments Commission, CFD product intervention order