Selecting a trading platform is one of the most critical decisions for any trader. But how do you ensure you're choosing one that's regulated, cost-effective, and easy to use? Understanding the key criteria can set you up for success.
In this article, we’ll break down the essential factors to consider when evaluating trading platforms and illustrate them with a real-world example: Mitrade.
1. Supervision
This is always a top requirement for trading platforms if they want to gain attention and support from investors, as no one wants to entrust their assets to a platform lacking credibility.
Currently, checking whether a trading platform meets this criterion often relies on leading regulatory organizations in major countries around the world, such as:
Country | Regulatory Organization |
USA | National Futures Association (NFA) |
UK | Financial Conduct Authority (FCA) |
Australia | Australian Securities and Investments Commission (ASIC) |
Cyprus | Cyprus Securities and Exchange Commission (CySEC) |
Switzerland | Swiss Federal Banking Commission (SFBC) |
Germany | Federal Financial Supervisory Authority (BaFin) |
France | Financial Markets Authority (AMF) |
A trading platform that is one of the organizations listed in the table above provides greater credibility and security for investors.
One of the key indicators of a forex platform's credibility is its operating license. Typically, reputable international platforms are licensed by major financial organizations such as ASIC, CySEC, and FCA, which are considered among the top regulatory bodies worldwide for overseeing securities and investment markets.
There are several offshore licenses available, including the Financial Services Authority (FSA) of Seychelles, the International Financial Services Commission (IFSC) of Belize, the Cayman Islands Monetary Authority (CIMA), and the Financial Services Commission (FSC) of Mauritius.
An offshore forex license allows a company to legally operate a forex brokerage business outside its home country. These licenses are issued by regulatory authorities in various jurisdictions, which often feature favorable regulatory environments, lower taxation, and streamlined processes for obtaining licenses.
While offshore licenses can be beneficial for certain business models, they may be perceived as less reputable compared to onshore licenses, such as those from ASIC and FCA, as we mentioned.
The choice between offshore and onshore licensing often depends on the broker's target market, business strategy, and the importance of regulatory reputation to their clients.
For example, to cater to users in different jurisdictions, Mitrade holds both onshore and offshore licenses from ASIC, CySEC, CIMA, and FSC.
The regulated brokers always clearly state their regulated status on their websites. However, whether the information is accurate or not, you need to check it yourself on the official websites of the regulatory bodies or by other methods, as follows:
