Lesson 8 of 8 · 12 min
Course check: test yourself Flashcards for the broker vocabulary, and ten questions on regulation, accounts, costs, execution, platforms, money movement and red flags.
By the end you'll be able to
Recall the broker vocabulary from the whole course Answer mixed questions across all seven lessons Judge any broker against a consistent set of criteria Free course
Enrol in “Choosing a Broker” to start this lesson Enrolling is free. Your progress, quiz scores and certificate are kept in your account, on every device.
This is the last course in the academy. If you can answer these, you can run the full broker check.
Flashcards
Term Regulation Tap to reveal Definition Supervision of a broker by a financial authority that sets capital, conduct and client-money rules and can fine or shut the firm. The first thing to check about any broker. Term Segregated client funds Tap to reveal Definition Client deposits held in bank accounts separate from the broker's own money, so they cannot be used to run the business and are protected if the firm fails. Term Negative balance protection Tap to reveal Definition A rule that a retail client cannot lose more than the money in the account, even if a gap in the market takes a position past the stop. Term Compensation scheme Tap to reveal Definition A fund, backed by a regulator, that repays clients up to a limit if a regulated broker fails and cannot return their money. Term Raw spread (ECN) account Tap to reveal Definition An account with spreads close to the interbank price plus a fixed commission per lot. Usually cheaper than a spread-only account for active traders. Term Swap-free account Tap to reveal Definition An account with no overnight interest charged or paid, offered for religious reasons. Brokers often recover the cost through a wider spread or an admin fee. Term Swap (rollover) Tap to reveal Definition The interest paid or earned for holding a position overnight, based on the interest-rate difference between the two currencies. Term Commission Tap to reveal Definition A fixed fee some brokers charge per trade, usually quoted per lot, instead of or in addition to a wider spread. Term Slippage Tap to reveal Definition The difference between the price you asked for and the price you got. Common during fast markets and news. Term Requote Tap to reveal Definition When a broker refuses to fill a market order at the price shown and offers a new, usually worse, price instead. Common at dealing-desk brokers in fast markets. Term Execution Tap to reveal Definition How and how fast your order is filled: the price you get, the delay, and whether the broker fills it itself or passes it to the market. Term MetaTrader (MT4 / MT5) Tap to reveal Definition The most widely offered trading platforms, made by MetaQuotes. MT4 is older and simpler; MT5 is its successor with more timeframes and order types. Term cTrader Tap to reveal Definition A trading platform popular with ECN brokers, known for modern charting, built-in market depth and C# automation. Term KYC Tap to reveal Definition Know your customer: the identity and address checks a regulated broker must run before you can deposit or withdraw. Their absence is a warning sign, not a convenience. Term Deposit bonus Tap to reveal Definition Credit added to a deposit, usually with conditions that require a large trading volume before withdrawal. Banned by several regulators because it encourages overtrading. Term Market maker Tap to reveal Definition A broker that takes the other side of your trade itself rather than passing it to the market. Term ECN / STP broker Tap to reveal Definition A broker that passes your orders through to liquidity providers rather than taking the other side itself.
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Course quiz
Course quiz: 10 questions
Question 1 of 10
Which of these is NOT provided by a strict regulator such as the FCA?
A Protection against losing trades B Segregated client funds C Negative balance protection
Next question Question 2 of 10
A broker's site shows an FCA licence number. The register shows that number belongs to a firm with a different website. This is:
A A clone firm; walk away B A typo; ask support C Normal for brokers with several brands
Next question Question 3 of 10
Raw: 0.2 pips + $8 per lot. Standard: 0.9 pips, no commission. Cheaper per lot?
A Standard, at $9 versus $10 B Raw, because the spread is tighter C Equal
Next question Question 4 of 10
One lot held 10 nights at −$9 swap, spread $10, commission $7. Total cost?
A $107 B $26 C $90
Next question Question 5 of 10
During a news release a buy stop at 1.0875 fills at 1.0882. This is:
A Normal slippage in a fast market B Broker fraud C A requote
Next question Question 6 of 10
Which order type protects the price but not the fill?
A Limit B Market C Stop
Next question Question 7 of 10
A trader with a tested method written in C# who wants to automate it would most naturally choose:
A cTrader B MetaTrader 4 C Any; automation is identical across platforms
Next question Question 8 of 10
Depositing euros into a USD account and later withdrawing to euros costs you:
A Conversion both ways, on top of any fees B Nothing extra; conversion is free C Conversion once only
Next question Question 9 of 10
The best single test of a broker before a large deposit is:
A A small deposit followed by a withdrawal of a meaningful part of it B Reading reviews on the broker's own site C Checking that the demo account works
Next question Question 10 of 10
You lost money to an unregulated broker. Someone offers recovery for a $500 advance fee. You should:
A Refuse; report to the regulator and your bank instead B Pay; $500 is small compared with the loss C Negotiate the fee down
See my score What next
Scored 8 or more: you have completed the academy. Go back to the course that felt weakest and reread it with a demo account open.
Scored 5 to 7: revisit the lessons behind the questions you missed, then retake the quiz.
Below 5: go through the course again before choosing any broker. This is the one course where a mistake costs the whole deposit.
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