How to choose the best trading account for your needs

How to choose the best trading account for your needs

To participate in the financial markets, one must have a trading account, which is a specific type of investment account that allows you to buy and sell securities such as stocks, bonds, forex, commodities, and various funds. Trading accounts come in various types depending on the broker you work with, and choosing the right one for your needs may be overwhelming for beginners who are just getting into investing.

In this article, we aim to provide you with the knowledge surrounding trading accounts. This includes the types of trading accounts you can typically find with providers and brokers, factors you can consider choosing one that works for you, and the steps you can take to create one. If you are keen to create a trading account in Australia, read on.

What are the different types of trading accounts?

In Australia, there are many types of trading accounts you can open, depending on the kind of securities you want to trade, your financial situation, any religious needs you may have, your trading style, and more. Of course, it does depend on the specific broker you work with, because different brokers will offer different accounts – and call them by different names. However, generally, below are some of the types of trading accounts you may be able to choose from:

Individual standard account

Many traders start off with an individual standard trading account, which is a type of classic account offered by brokers and other financial institutions for retail traders. There is usually a low minimum deposit affordable by many, and with this account comes access to trading platforms, where you can trade securities. If you are a beginner, you may want to start off with a standard account.

Joint account

A joint account is a type of investment account that is designed for two or more people who want to trade securities jointly. This can be a married couple, for example, who wants to build their financial future together. Not all brokers offer joint accounts. Therefore, if you want to invest with a spouse or a partner, you should make sure you choose a broker that does.

Corporate account

Many brokers also offer corporate or professional accounts for companies or organisations that want to trade securities. Typically, you will not be able to apply for a corporate account as an individual retail trader, as it requires your company to sign off on account creation. Funding and trading may also work slightly differently from individual standard accounts, with slightly different fee structures.

Professional account

Finally, brokers may also offer professional accounts for those who have experience in the financial industry. This may include former professional traders with more than a decade of experience or those currently working on the trading floor in large banks and financial institutions. Typically, you will need to provide proof of employment and experience when you apply for a professional account. Professional accounts may come with more advanced tools on the broker’s trading platform.

Variations within these accounts

Aside from these main types of accounts, there are also other variations, such as cash accounts, margin accounts, and options account. There may also be account types based on your trading style, such as high-frequency trading account for short-term traders who are very active in the markets, opening and closing hundreds of trades a day.

Variations of these accounts may include different fee structures, such as sliding-scale commissions instead of a fixed number, access to higher leverage ratios, and minimum deposit and trading requirements. There may also be Islamic accounts for traders of the Islamic faith, which will have separate account requirements and commission fee structures to adhere to requirements of the religious faith.

Are trading accounts regulated in Australia?

Yes, trading accounts are regulated in Australia. The country’s regulatory body is the Australian Securities and Investments Commission (ASIC), and they are responsible for overseeing all activity in the financial services industry, including the activity of forex brokers and traders.

The ASIC issues an Australian Financial Services (AFS) license, and forex brokers must meet strict requirements and guidelines to obtain it. This means they must have sufficient financial resources, follow risk management procedures, and maintain proper client money segregation. They must also provide clients with protection for their fund and transparency in their disclosures related to their services and fees, as well as the risks associated with trading.

Knowing this, it is in your best interest to find a broker that carries an AFS license. Most major brokers operating in Australia have this license and you can usually find a declaration on their website. But if you are unsure, you can also access ASIC’s website and search for your broker’s name in their register of licensed financial services provider to check.

Factors to consider when selecting a trading account

Once you have selected a licensed and reputable broker that meets your needs and offers the securities you want to trade, you must do a bit of self-evaluation to see what kind of trading account would be best for you. Some factors you can consider are:

Account fees

Account fees include any minimum deposit requirements, account maintenance fees, transaction fees, and commission rates. You should check whether your financial circumstance or trading style is compatible with the account fee structure.

Trading platform

Many brokers offer versions of the MetaTrader platforms, which include some of the most popular platforms for trading forex, stocks, and more. Two examples are MetaTrader 4 and MetaTrader 5. However, there are also brokers who offer bespoke, branded trading platforms. Whichever is the case, ensure you will be working with a reliable and user-friendly trading platform that meets your needs.

Customer support

You should also consider whether your broker can offer you any customer support when you open an account with them. Look for those that offer responsive and reliable customer support services, and if you have any other requirements, such as support hours or language needs, ensure that your broker meets them.


As mentioned, you should make sure you are working with a broker that is ASIC-licensed. This can not only ensure the safety of your capital, but it will also help you protect your personal information. Additionally, working with a licensed broker means they comply with strict rules and regulations, and they are transparent about their fee structures, provided services, and risk disclosure.

Your trading needs

Finally, some of the trading needs you can consider before you open an account include your trading style, preferences, and approach. For example, if you are a scalper or a high-frequency trader, you may want to consider opening an account with low commissions and transaction fees. This can help you maximise your potential returns. If you are someone who requires professional tools, ensure that your trading account or broker can provide you with access to them.

The bottom line

Choosing the right trading account for your needs is crucial to your success in the financial markets. By considering the factors mentioned above, you can find the best trading account for you and start trading with confidence. Remember to always conduct thorough research and due diligence before opening a trading account with any broker to ensure a positive trading experience.

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