Broker intent thread: questions to ask before opening an account

[LondonScalper]

The last account I opened took me eleven days from first email to first live ticket, and most of that time went on questions I should have asked before I sent a single document.

So this is my list, written after twenty-odd years of opening and closing accounts, some of them in a hurry I regretted.

First, the boring legal one: which entity will actually hold my money, and in which country is it regulated? The brand on the website and the company on the client agreement are not always the same thing.

Second, what happens to my orders. I ask whether the account type I want is execution-only, whether there is a dealing desk on any part of the flow, and what the minimum distance for stops is on the pairs I trade. If the person on chat cannot answer the stop distance question, I take that as an answer.

Third, money out. How long did my last test withdrawal of £200 take, and what did it cost? I always do one small deposit and one small withdrawal before funding properly.

Fourth, the scalping question in plain words. I write "I hold positions between 20 seconds and 6 minutes, around 15 tickets a day" and ask for a written reply. A vague reply goes in the file.

I am collecting these for a pinned checklist, so what do you ask that I have missed?

[Shadow Trader]

The written reply to the scalping question is the best item here. I'd add a follow up that has caught me out: ask whether there is a minimum holding time or a rule about trades closed within a certain number of seconds, and whether it applies to profitable trades only.

Some account terms say nothing about scalping but have a clause on arbitrage or latency trading that is vague enough to cover fast trades. I ask them to confirm in writing that my described style doesn't fall under it.

On the money out question, I'd also ask what happens if a withdrawal is made to a different method than the deposit. A small deposit by card and a withdrawal to bank can trigger extra checks that take days.

The other one I always ask: what is the margin close out level, and does it differ on weekends or before major events? A few accounts raise margin requirements before elections or central bank meetings with short notice.

And one practical one. What time zone is the server, and does it follow European or US daylight saving changes? It sounds minor, but it affects every session box and every daily loss calculation.

[Shadow Trader]

One more for the checklist, on the stop distance question: ask it twice, once for normal hours and once for the hour around a big release. Some accounts widen the minimum stop distance automatically around news, and you only find out when an order gets rejected.

I'd also ask what happens to pending orders over the weekend. Some keep them, some cancel them, and one I used kept them but filled them at the first price after the gap, well away from the order level.

On the legal entity question, I'd add which entity handles complaints and where a dispute would actually go. The answer tells you a lot about the protection you really have.

Your test withdrawal of 200 is a good habit. I do it twice, once early and once after a few weeks of trading, because the second one is where problems tend to appear.

Last one: can I get my full trade history as a file, with timestamps to the second? If the answer is monthly PDF statements only, my logging turns into a lot of manual work.