10 Things to Check Before Opening a Trading Account

Knowing how to choose a broker matters more than any trading technique, because a bad provider can lose your money before the market has a chance to. LyvexTrade does not rank or recommend firms. Instead, here are ten checks you can run on any forex or CFD broker, share-dealing service or crypto exchange. If a provider fails one of the first three, you do not need to read the other seven.

The ten checks

1. Is it authorised where you live?

   Look the firm up on your own regulator's public register, typed into your browser yourself, not through a link the firm or an advert gives you. Examples include the Financial Conduct Authority's register in the UK, the ASIC professional register in Australia, and the NFA's BASIC database for US forex dealers. Note the firm's reference number, authorised activities and registered website address.

2. Is the entity you would join the one that is regulated?

   Many groups run several companies in different countries. The website may mention a well-known regulator while signing up new clients through an offshore sister company with weaker rules. The account terms name the legal entity you contract with; it must match the register entry.

3. How is your money held?

   Regulated brokers in major markets must keep client money in segregated accounts, separate from the firm's own funds. Some countries add a compensation scheme if a firm fails. For crypto exchanges, ask where coins are held, whether client assets are kept separately and whether the exchange publishes independent evidence of its reserves. Protection here is often much weaker.

4. Does the leverage follow the rules?

   For retail clients in the UK and EU, CFD leverage is capped at 30:1 on major currency pairs, 20:1 on gold and major indices and 2:1 on crypto, with a margin close-out at 50% and negative balance protection. A firm offering a UK or EU resident 500:1 is either not regulated there or is steering you into an unsuitable category. Use the margin calculator to see what any leverage level means in money.

5. Can you find every cost in writing?

   A proper fee schedule lists spreads (typical and minimum), commissions, overnight financing, currency conversion, withdrawal and inactivity fees. If you cannot find these before signing up, assume the costs are higher than you think. Trading fees explained shows how to add them up.

6. How do withdrawals work?

   Read the withdrawal rules before depositing: processing times, fees, minimums, and whether money can only return to the account it came from. Complaints about delayed or refused withdrawals are one of the clearest warning signs a provider can give.

7. Are there bonuses or "free money" offers?

   Regulators in the UK, EU and Australia ban bonuses and similar inducements for retail CFD clients. A bonus offer to a retail client in those regions suggests the firm is operating outside those rules. Bonuses elsewhere often come with conditions that lock your deposit until you have traded huge volumes.

8. What exactly will you be trading?

   Check whether you would own the asset (a share, a coin) or hold a contract with the provider (a CFD). Read the order execution policy: does the firm take the other side of your trades, and how does it handle fast markets, slippage and requotes? Trading software such as MetaTrader is just a platform; the firm behind it is what matters.

9. Is there a proper complaints route?

   A regulated firm must have a complaints procedure and, in many countries, access to an independent ombudsman or dispute scheme. A firm offering only a chat window or a messaging app has no one above it you can turn to.

10. How did you hear about it?

    If the firm, or someone "helping" you, contacted you first through social media, a dating app, a messaging group or a cold call, stop. Genuine providers do not recruit beginners this way. Read how to spot trading scams before going any further.

How to choose a broker when the checks conflict

Sometimes a firm passes the regulatory checks but has high costs, or has low costs but slow withdrawals. Beginners should weight the checks in order: regulation and client money first, withdrawals second, costs third. Saving a fraction of a pip means nothing if the money cannot come back out.

Be careful, too, with comparison websites that rank providers, including ones that look independent. Many earn a fee for each client they refer, which can influence which firms appear at the top. A ranking is not a substitute for checking the register yourself, reading the fee schedule and testing a withdrawal. The order in which firms appear tells you about the website's business model, not about your safety.

It also helps to write down what you actually need. Someone who wants to buy a few index funds once a month needs a very different service from someone who wants to practise leveraged forex. A long list of markets and tools is not an advantage if you will never use them.

Extra checks for crypto exchanges

• Registration or licensing for crypto services in your country. Many regions now require it.
• Security basics: two-factor authentication, withdrawal address allow-lists and login alerts.
• Support for the networks you plan to use, such as TRC20 or ERC20 for USDT.
• Clear rules on what happens to your coins if the exchange is hacked or becomes insolvent.

Red flags that end the search

• Guaranteed returns, "risk-free" trading or profits promised within days.
• An "account manager" who calls, messages or tells you which trades to take.
• Pressure to deposit more to "unlock" a withdrawal or pay a "tax" first.
• A website registered recently, copying the name or logo of a known firm (a "clone").
• Payment requested in crypto, by gift card or to a personal bank account.

Start small and test the exit

Passing the ten checks does not mean you have to commit large sums. A sensible sequence is to open an account, deposit a small amount, and then withdraw part of it back to your bank before doing anything else. This shows you how long withdrawals really take, what they cost and whether the identity checks create delays. If a provider makes this simple test difficult, you have learned something important for the price of a small transfer.

Treat any trading platform's demo account in the same spirit: it is useful for learning the buttons, not for judging the firm. The things that matter, such as how your money is held and how withdrawals are handled, only show up with real money, which is why the test amount should be small.

When a provider's status changes

Authorisations can be varied, restricted or cancelled. Regulators sometimes publish notices when a firm stops taking new clients, enters administration or is found to be operating without permission. If you already hold an account, it is worth checking your provider's register entry once or twice a year and after any unusual event, such as a sudden change of company name, website address or bank details for deposits. Scammers sometimes pose as an existing provider announcing "new payment details", so confirm any such change through the contact details on the register.

A simple record to keep

Before depositing anywhere, write down: the firm's legal name, its regulator and reference number, the website address on the register, the fee schedule you read, and the withdrawal rules. If anything later changes, or someone contacts you claiming to be from the firm, you have something solid to compare against.

Sources

• UK Financial Conduct Authority, Financial Services Register and CFD rules
• European Securities and Markets Authority, CFD product intervention measures
• Australian Securities and Investments Commission, CFD product intervention order
• National Futures Association, BASIC database