10 Things to Check Before Opening a Trading Account

How to choose a broker, or a crypto exchange, is less about finding the lowest advertised spread and more about ruling out the providers that could lose your money in ways no strategy can fix. OrynPrime does not recommend or rank providers, and we do not open accounts for anyone. What we can do is give you the checks that work on any name, in any country, and explain what each answer means. Run them before you hand over identity documents or a deposit.

The ten checks

1. Find the entity on your regulator's register

   Search the public register of your national regulator (for example the FCA in the UK, ASIC in Australia, or the CFTC and NFA in the US for retail forex) yourself, rather than following a link from the provider. Confirm the firm's name, registration number, permitted activities and approved website addresses. Clone firms copy the name and number of real companies; a mismatch in web address or contact details is the giveaway.

2. Identify the legal entity you would actually contract with

   Groups often run several companies: a well-regulated one for some countries and an offshore one for everyone else. The terms and conditions name the entity serving you. If your account would sit with an entity licensed somewhere with light rules, the protections of the group's main licence do not apply to you.

3. Check how client money and assets are held

   Regulated brokers must segregate client money from their own funds. Share brokers hold investments in nominee accounts. Crypto exchanges vary widely: look for statements about cold storage, independent custodians and proof-of-reserves reports that also cover liabilities. Ask which compensation scheme, if any, applies.

4. Understand the execution model

   Some providers take the other side of your trades (often called market makers or dealing-desk brokers). Others pass orders to external liquidity and earn a commission or mark-up. Both can be legitimate. What matters is that the model is disclosed, that the firm publishes an order-execution policy and that conflicts of interest are managed. On a crypto exchange, check whether you trade against other users in an order book or against the platform itself.

5. Add up the full cost of a round trip

   Headline spreads are only one line. Add commission, overnight financing, currency conversion, withdrawal and inactivity fees. An illustrative comparison on one standard lot of a USD-quoted pair: a 1.2-pip spread with no commission costs 1.2 × $10 = $12, while a 0.2-pip spread plus $7 round-turn commission costs 0.2 × $10 + $7 = $9. Our guide to trading fees explained goes through each charge.

6. Check leverage against local rules

   Retail caps in the UK and EU are 30:1 on major currency pairs, 20:1 on gold and major indices, 5:1 on single shares and 2:1 on crypto. A provider offering you 500:1 either classes you as a professional client (which removes protections) or is not operating under those rules at all. Neither should be a reason to sign up.

7. Confirm the risk protections

   For retail CFD clients in the UK and EU, positions must be closed out at a 50% margin level and your balance cannot go below zero. Check that the provider applies negative balance protection and publishes its margin rules. For crypto platforms, find out what happens to open positions and balances during outages.

8. Read the withdrawal terms before the deposit terms

   Look for processing times, fees, identity checks and the rule that withdrawals return to the original payment method. Legitimate firms state these up front. Platforms that demand extra "taxes", "unlocking fees" or deposits before releasing funds are almost always fraudulent.

9. Test the platform without money

   A demo account shows whether order types, stop-losses, margin figures and cost displays behave as you expect. It will not reveal live execution quality, so treat it as a user-interface test. See what demo contests and demo accounts can and cannot show.

10. Know the complaint route

    Find the firm's complaints procedure and whether an independent ombudsman or dispute scheme covers it. If the only route is a messaging app chat or an "account manager", that is a warning in itself.

Keeping records from the start

Whatever you decide, save copies of the terms and conditions, fee schedule and key information documents on the day you open an account, along with the register entry you checked. Terms can change, and if a dispute arises later, the version you agreed to is what matters. Keep confirmation emails for deposits and withdrawals in the same place.

Red flags that end the check early

• Unsolicited contact by phone, messaging app or social media, especially from an "account manager" or "mentor".
• Promises of guaranteed or fixed returns, or pressure to deposit before a deadline.
• Bonuses for depositing: bonuses and inducements for retail CFD clients are banned in the UK, EU and Australia.
• Requests to install remote-access software or to send crypto to a personal wallet.
• A regulator warning list entry for the firm or its web address.

More warning patterns are in how to spot trading scams.

How to choose a broker for different markets

The ten checks apply everywhere, but the weight shifts by market.

Extra checks for crypto exchanges

Crypto platforms sit partly outside the rules that protect forex and share clients, so a few questions need more attention.

• Licence scope. A registration for anti-money-laundering purposes is not the same as a licence covering custody and conduct. Check what the registration actually permits.
• Reserves versus liabilities. A proof-of-reserves report that lists assets but not customer liabilities cannot show solvency.
• Supported networks. Confirm which networks the exchange supports for each coin and stablecoin before sending anything; see USDT networks.
• Withdrawal limits and pauses. Read how the platform handles suspensions, and whether it has paused withdrawals before.
• Product restrictions. Leveraged crypto products may be unavailable to retail clients where you live; a platform that offers them anyway may not be serving you from a local entity.

Questions to put to a provider in writing

A short email creates a record and tests how the firm responds. Useful questions include:

1. Which legal entity will hold my account, and what is its authorisation number?
2. How is client money held, and which compensation scheme applies to me?
3. Do you act as counterparty to my trades? Where is your order-execution policy?
4. What were typical spreads on the instruments I plan to trade over the last quarter?
5. What fees apply to deposits, withdrawals, inactivity and currency conversion?

A clear, specific reply is a good sign. Silence, pressure to call instead, or an answer that changes the subject is not.

Why we don't publish a "best broker" list

A provider that suits a resident of one country may serve another country through a lightly regulated entity. Costs change, ownership changes and licences are granted and withdrawn. Lists that ignore those facts are, at best, out of date. A method you can repeat on any name stays useful, and it keeps the decision where it belongs: with you, using evidence you checked yourself.

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, CFD product intervention order
• US National Futures Association, BASIC registration search