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Best forex brokers

Best Forex Brokers in the World in 2018

This section of our website is dedicated to forex brokers. Here we will share valuable information from our vast experience in the forex industry and will present the way forex brokers operate. Unlike other websites that will just show you a fancy list of forex brokers with logos and bonuses just waiting for you to register with the brokers that sponsor them, we will try to first explain how forex brokers work and what to look for when choosing your broker.

If you reached this page searching for the best forex broker in the world, you should keep reading because this is probably the first website that will tell you the truth instead of just flashing their sponsors in front of your eyes.

Sorry for using this trick to grab your attention, but it’s really worth reading this

How the online forex industry works

If you want to trade forex it is very important to understand what you’re dealing with and how the industry works. The forex market is the largest market in the world by the volume of daily transactions and there is money to be made here, and this is why a huge industry developed around forex trading.

A forex broker can make a lot of money from a single client (I will explain how later in this article) and this is why it is willing to pay a lot of money for advertising on websites dedicated to forex trading. This greatly distorts the reviews and the rankings you will see on such websites, as the website owners will promote the brokers who sponsor their websites. You will notice that most websites that talk about forex display banners and other marketing material from the brokers and also use the brokers’ logos in order to boost their brand image. This is because they get paid to do this. If you just want to share some useful information on a topic you know very well, you will not fill it with banners and logos of the companies you talk about (unless you promote them).

So, the first thing you should know about the forex industry is that brokers pay a lot of money to be displayed on reviews websites and this is why the information you will see there is not objective.

How do forex brokers make their money?

Theoretically, forex brokers make their money from the ‘spread’, which is the difference between the bid and ask price of currency pairs. Or at least, this is what they all say on their websites. But is this actually true?

As with most things, there is some truth in this statement, but things are not exactly the way they are presented. There are actually three different business models that forex brokers use in order to make money. Below, I will present the three of them.

1) Market Maker Model – The brokers using this business model are just waiting for their clients to lose their money, since they are the counterparty of the trades. They are very similar to bookmakers as they make money when the client loses. Of course, the spread plays a role in this business model as well, because the spread gives the broker an edge against the trader and will cause the novice traders to lose money in the long run. Brokers using this model know that most traders are beginners and will end up losing money, and they prefer to just wait for this to happen instead of actually processing their trades to a third party and incur additional costs for executing the trades. All brokers use the market maker model when it comes to micro and mini accounts, because banks (liquidity providers) use the standard lot when providing market liquidity.

2) ECN/STP Model with Markup – The brokers using this model to monetize their business will process the trades directly to their liquidity providers using their connected electronic platform and will add a ‘markup’ to the interbank spread. This is the closest model to “making money from the spread” since the brokers get their money from the spread markup. For example, if the liquidity providers have a 0.5 spread on a specific pair and the broker adds 1 pip as markup, your platform will display a spread of 1.5 pips. The broker’s profit will be 1 pip regardless of the outcome of the trade. It doesn’t matter if you win or lose, the broker will always earn based on the volume you trade.

3) ECN/STP Model with Commission – This business model is very similar to the one described above, as the broker will execute your trades directly to the liquidity providers giving you direct market access. The difference between the two is that in this case, the broker will charge a commission for every trade you place but will not add a markup to the spread. This means that you will trade directly against the liquidity providers at interbank spreads. If we’d take the same example given for the markup model, the broker charging commission will let you trade directly with the 0.5 spread but will charge you a commission proportional to the size of the trade (for example a 10$ commission for one round lot traded). In this case the broker earns its revenue from the commissions. It doesn’t earn anything from the spread, and it doesn’t matter if you win or lose.

Both ECN/STP models are based on executing the trades directly to liquidity providers, and they are more or less the same from the trader’s perspective, since the markup and the commission are usually equivalent in terms of cost. Brokers are able to provide a STP model only for accounts with the standard lot size of 100,000 units for major pairs. For mini and micro accounts all brokers will have to work as market makers.

As you probably noticed, there is a huge difference between market makers and STP brokers in the way they make money. What model is more profitable for the broker? This greatly depends on the type of traders they have. A broker with novice clients will make more money being a market maker. I will explain you why. A novice trader (and believe me, most retail traders are beginners with very little experience) will have a 50%-50% chance of winning and losing pips when he trades. If such trader executes many trades, the ‘luck factor’ will become negligible as the total results of his trades will tend to average around zero pips won or lost. This means that the spread will eat from the bankroll until it is depleted. In the end, such traders will lose all their money to the spread. A market maker will make the most money out of such trader since it doesn’t have to split the spread with the liquidity providers. On top of that, it will also save on costs because having a high speed ECN (Electronic Communication Network) requires some investments and some very qualified technicians to maintain it. This is why many brokers prefer to act as market makers instead of choosing the ECN/STP model.

You may ask yourself, isn’t it riskier for the broker to act as a market maker? What if there is a very good trader that wins a lot of money? While it is true that market makers are at risk of losing money to very good traders, they have some hedging solutions for such situations. The risk management team of the broker will rate every trader based on his/her performance. If a trader proves to be a constant winner that trades large amounts, the dealing desk may decide to execute his trades to their liquidity providers (even market makers have their liquidity providers for situations requiring hedging). While in this case the broker will no longer make money on the client’s loses, there are still some issues that can affect the trader. The dealing desk is unable to instantly execute trades like an ECN and this is why it will not allow scalping for winning traders. Also, during news time it may give requotes or have large slippage because of the delay caused by the dealing desk compared to a 100% electronic processing system. This is why many news traders and scalpers end up complaining about their brokers on discussion forums. However, if your trading style is not based on day trading and it doesn’t require ultra-fast and precise execution, you will have no problem with market makers. Of course, here I’m talking about real market maker brokers, not about shady brokers without any regulation that have no liquidity providers and are trading against their clients even when their clients make money (which results in a conflict of interest that will force the shady brokers to resort to ugly tricks in order to block the traders from winnings).

Anyway, my personal opinion is that you should always use an ECN/STP broker if you have enough capital to trade using a standard account, because such brokers have better execution and no limitations when it comes to your trading style and strategy. ECN/STP brokers will always allow scalping Expert Advisers as well as news trading.

Now that I have explained how forex brokers make their money, you are probably asking yourself what forex brokers do I recommend. I will split my recommendations in two categories: forex brokers for beginners with low capital (this means traders that don’t have enough capital to use a STP broker and are only starting to learn) and forex brokers for advanced traders.

The best forex brokers for beginners

If you are a beginner that is not willing to invest a significant amount into a forex trading account (you plan to invest less than 5,000 USD) you will probably want to have a mini account, or a micro account. This means you will trade with a market maker regardless of the broker you choose. Considering this, what is important is that your broker is a large one, it is well regulated and has a user friendly and easy to use trading platform.

One of the best options for this is the broker XM Group. They have three account types (Micro, Standard and Zero). The MICRO account allows you to operate with micro lots, lower level of risk and it has minimum initial deposit of $5. The STANDARD account allows you to operate with standard lots and it has minimum initial deposit of $5. Finally, XM ZERO account allows you to operate with standard lots, lower spreads starting at 0 pips and it has minimum initial deposit of $100. XM ZERO account has a $3.5 commission per $100,000 traded.

Other good brokers are Ava Trade and Exness. If you are into ‘social trading’ and are more interested in enjoying your trading experience with fellow traders than trading professionally, you can also check Etoro, as they are the most beginner oriented broker.

The best forex brokers for advanced traders

I strongly recommend to use a ECN/STP broker if you are serious about trading forex. This means you should choose an account that uses the standard lot size with an ECN broker.

Proabbly the best option for an ECN/STP account is IC Markets. This is an Australian broker that offers the Metatrader 4 platform with some of the lowest spreads in the industry. IC Markets has an outstanding pool of tier 1 liquidity providers that include banks such as HSBC, RBS, JP Morgan Chase, BNP Paribas, UBS, Citi, Morgan Stanley and Goldman Sachs.

Another good ECN broker that you can safely use is Pepperstone. This is another Australian broker with very strong liquidity, good execution and low spreads.

All the brokers described above are very good ones. I have accounts with all of them and I am satisfied with the way they work, as I never had issues with them. As someone who uses Scalping Expert Advisers on a regular basis I put a lot of emphasis on execution and spreads, and I can say all these brokers are doing a very good job so far.

For a full list of the best forex brokers in the world, you can see our up to date forex brokers ranking.

More articles about forex brokers:

Choosing a forex broker can be a very daunting task because the number of available options is overwhelming. With so many brokers advertising themselves as being the best, people go to specialized websites to read reviews and see broker rankings hoping they will find which broker is their best choice. Read More

There are many reasons why people decide to open bank accounts offshore. They can include a better privacy protection, access to better banks where money are safer or simply better services that home based banks don’t offer. The same reasons apply when it comes to brokerage accounts. Read More

A lot of traders think that a big broker is better than a smaller one because a larger company has many advantages such as economies of scale, a better liquidity position and is the subject of higher scrutiny from the public and the regulators. While this basic assumption has some merit. Read More

Since there is a lot of confusion among retail traders about the overall quality of forex brokers, we have decided to create an advanced rating system and evaluate all the major forex brokers in the world according to the same set of criteria. Because we are aware that it is impossible to evaluate all forex brokers. Read More

For the second consecutive year, Nigeria has been the fastest growing market for retail forex trading. The industry is seeing a stable growth rate around the world, especially in Africa and Asia, but among all countries Nigeria is growing at the fastest pace. What makes forex trading so attractive to Nigerians. Read More

Top 10 Best Forex Brokers Review 2018 – The very best Forex Broker

InvestinGoal » Best Brokers » Top 10 Best Forex Brokers Review 2018 – The very best Forex Broker

Well, apparently you’re looking for the best forex broker in the world, right?

Our Top 10 of the best forex brokers it’s right for you then.

Over time we have created several lists on the best forex brokers in every category (find them at the bottom of this post).

But here we have gathered the very best of the best, the biggest trusted forex brokers in the world, with peaks of excellence in the quality of services.

This order is not necessarily a ranking, we’re talking about the top forex brokers around the world, the quality is very high in all cases, and it is therefore very difficult to find a real ranking.

Anyway, here is our list of the top 10 forex brokers renowned all over the world, with a short review too.

WARNING

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you can afford to take the high risk of losing your money

Top 10 list of the best Forex brokers in the world and Review

1. Pepperstone

Founded in 2010 Pepperstone has quickly became one of the largest and most important Australian broker (in 2016 they reported an annual growth of 20% each year). Their headquarters is in Melbourne, but they also have offices in Dallas and Shangai. The most important Pepperstone features is without a doubt the ECN trading system, one of the best in the industry. Pepperstone offers various types of account to fill every client’s needs, from the more “normal” trader, to the “high volume” one, to the EA user, etc. You have the Standard account, the Razor, the Swap Free and the Active Traders. To be noted also the partnership with Equinix, a Nasdaq company, a financial network placed near Wall Street, a strategic place to be able to get the best prices.

  • Regulations: ASIC
  • Type: ECN – DMA
  • Leverage: up to 1:500
  • Minimum Deposit: $ 200
  • Headquarter: Australia
  • US Customers: No
  • Other instruments: Stocks, indices, CFDs, Commodities
  • Try Pepperstone with a demo account

2. FxPro

Founded in 2006, the English broker FxPro has always been one of the key broker for the NDD category, a category in which many traders are particularly interested. FxPro has also won several awards over the years for its trading platforms, from the MetaTrader to the cTrader. FxPro also proposes several new technologies that make it a very state of the art broker from this point of view, particularly for those users who prefer automated trading. Services like cAlgo Algorithmic Trading, FxPro Library, FxPro Quant Strategy Builder and FxPro VPS are definitely worth trying if you want to automate your strategy.

  • Regulations: CySEC, FCA, FSB, DFSA, SCB
  • Type: STP (Straight Through Processing)
  • Leverage: up to 500:1
  • Minimum Deposit: $ 100
  • Headquarter: UK
  • US Customers: No
  • Other instruments: Stocks, Indices, Futures CFDs, Commodities
  • Try FxPro with a Demo Account

3. Plus500

Another giant of the Forex sector, well known all over the world and based in Cyprus, Plus500 is a CFD Provider, market maker type. With Plus500, in addition to the major forex currency pairs, you can access around 2000 tradable CFDs. Plus500 does not offer trading through the classic MT4 or MT5 platforms, but only through its own web, desktop and mobile platforms, expressly designed to improve the CFD trading experience. Plus500 can be a good choice for those who want to start trading, given the ease of use of its proprietary platforms.

  • Regulations: Plus500UK Ltd authorized & regulated by the FCA (#509909); Plus500CY Ltd authorized & regulated by CySEC (#250/14); Plus500SG Pte Ltd, licensed by the MAS (#CMS100648-1) and IE Singapore (#PLUS/CBL/2018); Plus500AU Pty Ltd (ACN 153301681), licensed by: ASIC in Australia, AFSL #417727, FMA in New Zealand, FSP #486026; Authorised Financial Services Provider in South Africa, FSP #47546. (You do not own or have any rights to the underlying assets. Please refer to the Disclosure documents available on the website.)
  • Type: Market Maker
  • Leverage: 1: 30
  • Minimum Deposit: € 100
  • Headquarter: Plus500 Ltd. is headquartered in Haifa Israel
  • US Customers: No
  • Other instruments: CFDs on indices, stocks, cryptocurrencies, commodities, options, ETFs
  • Try Plus500 with a demo account(CFD Service. 80.6% lose money)

4. Markets.com

As written directly on the home page “MARKETS.COM is operated by Safecap, a subsidiary of Playtech PLC which is traded on the London Stock Exchange’s Main Market and is a constituent of the FTSE 250 Index.” Markets.com is one of the fastest growing broker in recent years, thanks to the significant investments made and the quality of their services (in particular the multilingual support department, available 24/5, for which they even received several awards). As the domain name may suggest, the goal of this broker is to provide coverage on as many markets as possible, so as to become the reference point not only for forex brokers, but for the whole universe of online trading.

  • Regulations: CySEC, FSB
  • Type: Market Maker
  • Leverage: up to 1: 300
  • Minimum Deposit: $ 100
  • Headquarter: Cyprus
  • US Customers: No
  • Other instruments: Stocks, indices, ETFs, CFDs, Commodities, Bitcoin
  • Try Markets.com with a demo account

5. IC Markets

IC Markets, founded in 2007 and based in Sydney, is the first Australian forex broker, and one of the biggest in the world, also booming in recent years. IC Markets is renowned for its cutting-edge ECN technology, a factor that has enabled it to become one of the best brokers in terms of spread. For this reason, this broker is often the first choice of scalpers and day traders, i.e. traders with a high volume of daily operations.

  • Regulations: ASIC
  • Type: ECN/STP
  • Leverage: 500:1
  • Minimum Deposit: $ 200
  • Headquarter: Australia
  • US Customers: No
  • Other instruments: Commodities, Indices, Futures, CFD
  • Try IC Markets with a Demo Account

6. IG Markets

Among the “old English brokers” in the industry, founded back in 1974, IG Markets is renowned for the reliability and the quality of service and for being one among the brokers with the highest number of CFDs an investor can have access to, more than 10,000 to be precise. Until a few years ago this broker was among the few not supporting the MetaTrader platform, but just the ProRealTime one, even though today it also integrates the most popular MT4 and the L2 Dealer, to better meet the needs of many customers.

  • Regulations: FCA UK, ASIC, FINMA
  • Type: ECN/STP & Market maker
  • Leverage: up to 200: 1
  • Minimum Deposit: $ 200
  • Headquarter: UK
  • US Customers: No
  • Other instruments: CFDs, Stocks, Commodities, Indices, ETP, Options , interest Rates, VIX, bonds, bitcoin, IPO
  • Try IG markets with a demo account

7. Oanda

Broker of Canadian origin, founded in 1995, Oanda is among the biggest player regarding specifically the Forex market. It has been estimated that about 20% of spot forex daily operations passes through the Oanda servers. In addition to the classic MT4, Oanda provides its own WebTrader with which you can operate with a Cent Account, i.e. you can trade with very little quantities (fractions of microlots). This feature allows you to work with a good money management even with accounts of a few tens of dollars.

  • Regulations: NFA, CFTC, FCA UK, IIROC, MAS Singapore
  • Type: Market Maker
  • Leverage: up to 50:1
  • Minimum Deposit: none
  • Headquarter: Canada, USA
  • US Customers: Yes
  • Other instruments: Indices, Commodities, bonds, CFDs
  • Try Oanda with a Demo Account

8. Saxo Bank

More than a broker, we are in the presence of a bank, so much so that it is regulated as such. Saxo Bank, a Danish company founded in 1992, is definitely not for all budgets having a minimum deposit of $ 10,000. Once inside, however, you can have access to a broker with very high professionalism and the ability to trade also on real instruments such as futures, options and bonds.

  • Regulations: FINMA
  • Type: Market Maker
  • Leverage: up to 100: 1
  • Minimum Deposit: $ 10,000
  • Headquarter: Denmark
  • US Customers: No
  • Other instruments: Stocks, Options, ETFs, ETCs, Futures, CFD, Bonds
  • Try Saxo Bank with a Demo Account

9. Forex.com

Together with Oanda, Forex.com, founded in 1999 in New Jersey, it’s another attractive alternative for US customers. In fact, this broker, thanks to the closure of the US market to foreign competition, is now the largest broker in terms of daily trading volumes. In addition to size, Forex.com is also distinguished by the large number of regulations around the world it complies with, and element indicating the high level of safety and professionalism. In addition to MT4, the Forex.com customers can also access the FOREXTrader Pro platform and GTX – Forex ECN (for large or institutional clients).

  • Regulations: CIMA, NFA, CFTC, FCA, IIROC, ASIC, FFA, MAS, SFC
  • Type: ECN/STP – Market maker
  • Leverage: up to 200:1
  • Minimum Deposit: $ 250
  • Headquarter: US
  • US Customers: Yes
  • Other instruments: Indices, Commodities
  • Try Demo Account with Forex.com

10. XM.com

XM, founded in 2009 in Cyprus, is the largest forex brokers in Cyprus, and third in the world, with an important rate of growth in recent years. In terms of platforms, this broker only offers the MT4 and MT5, but where it excels is definitely in the orders execution technology, which is why it is very popular among very active day traders (also considered the highly leveraged granted which can go up to 888:1)

  • Regulations: CySEC, ASIC
  • Type: Market Maker
  • Leverage: up to 888:1
  • Minimum Deposit: $ 5
  • Headquarter: Cyprus
  • US Customers: No
  • Other instruments: Indexes, Commodities, Stocks, CFDs
  • Try XM with a Demo Account

List of our best forex brokers list

Do you want to deepen the research of the best forex brokers in the world?

Do you have some special needs and are you looking for something more specific?

Here is the complete (and growing) index of our lists where we have collected for you the best forex broker for each specific category

Forex Broker Reviews

Not even legends in the calibre of a Larry Williams or a Martin Schwartz will have much luck in currency trading if the broker is unwilling to cooperate – it has an overwhelming role in determining what type of experience you will have as a forex trader. The lack of clear rules and precedents creates great opportunities, but also huge risks for the unprepared.
But aren’t there always two sides to a story? To help our visitors avoid the dark side of forex, we have carefully screened the best offers in the online brokerage business, and prepared a selection of some of the most reputable and efficient brokers for your exclusive benefit. If you have any plans to explore the exciting world of currency trading, we are sure that you will find our list an invaluable guide in the crowded and sometimes shady world of the forex brokers. We recommend reading our listed brokers’ review pages for user reviews, e.g. Markets.com or Plus500 review page.

– Regulated by FCA, CySEC & FSCA
– Over 1M Registered Accounts
– More than 250 Trading Instruments
– MT4, MT5 and Web Trader Platforms
– Full ECN Trading Model
– Crypto-trading only avail. for clients of FT Global Limited.

40% New Member Bonus
– MIFID, ASIC, FSA & FSCA regulated
– Free Online Trading Coach

– Minimum Deposit $5
– Up to 1:500 leverage with micro-lots (0.01 size) available for everyone
– Scalping, hedging, trading on the news, and EAs are permitted at OctaFX.
– First Time Deposit Match: 50% Up To Any Max Deposit.

– АSIC Regulated
– True ECN Execution with spreads from 0.0 pips
– Powerful 500:1 leverage and 0.01 micro lot trading
– Scalping, hedging and EAs are allowed
– MAM / PAMM accounts
– Established in 2005
– 10,000+ products to trade

– CySEC, DFSA, FCA, FSCA, SIA Regulated
– MetaTrader4 , MetaTrader5, cTrader, FxPro SuperTrader
– 10+ Years in business
– 50+ International Awards

– Free ebooks, webinars + Tutorials
– Free award-winning daily technical analysis from Autochartist
– 1 on 1 account management + mt4 training

– CySEC regulated.
– Good for beginners with excellent trading academy.
– Beginner Friendly

– FREE Live trading signals delivered 3 times daily 5 days a week.
– Complete Education pack for novices and advanced traders alike. Designed to support long term – reliable trading.
– Alvexo’s New Webtrader – user friendly, tailored reports and built in trading signals.

– FCA, NFA, CFTC, IIRO, FSA, CIMA, MAS, SFC Regulated.
– Award winning platform.
– Beginner Friendly.
– Well established, safe and trusted.

– Trusted Global Market Leader
– Online FX & CFD Trading
– 180+ Global Markets, 84 FX pairs, 65 shares, 17 popular indices and more
– Forex, Indices, Commodities, Equities & Bitcoin
– Available to US traders

– Winner of Best Online Trading Platform at Shares Awards 2018
– 50 years’ experience in financial markets
– Free Guaranteed Stops(retail clients only on TraderPro)
– Spread bet and trade CFDs on over 5,000 markets
– Fixed and variable spreads
– Advanced charting package
– Our very own award-winning TraderPro platform
– FCA Regulated

– Min Deposit $100
– Leverage Up to 1:500
– Accounts may be individual, joint, or corporate, with options for traditional or ECN type pricing

– ASIC Regulated
– Well Established
– No Fees
– 24 hour support

– CySEC, FCA, ASIC Regulated
– MT4, MT5, WebTrader platform
– $50% and 20% deposit bonus up to $5,000(t&c apply)

– CySEC, FSCA Regulated, FCA & BaFIN Registered
– MetaTrader4 & 5 platform
– Proprietary debit card for quick withdrawal applications!

– FSCA Regulated
– MetaTrader 4 & Sirix platforms
– Education Tools
– Copy Trading is Available

– 24/5 Support
– Over 2000 assets
– Good Educational Material
FTD Bonus up to $4,000

*Broker offers variable spreads which are subject to fluctuating market conditions. Spreads tend to be tight during times of deep liquidity but can also widen significantly during times of low liquidity.

Want to be featured on this broker list? Use our contact form here.

More country specific forex broker listings:

Finding the Best Forex Broker – FAQ

Finding the best forex broker for your needs takes some research. Hundreds of online brokerage firms now compete for your account, so plenty exist to choose from. Check out our recommended top list above, or read our FAQ below with excellent points to consider before choosing your broker, or see this extensive five step guide on how to choose a forex broker.

Finding the best forex broker that has a fast execution capability, a reliable trading platform and which can be trusted with your account deposit might be the first things you will want to assure yourself of. Other sweeteners can include account opening bonuses and other features like mobile trading and SMS market alerts.

Basically, you want a forex broker you can trust to handle your money and your trades so that you can get on with the business of trading forex without worries. Anyway, to make the process of finding a broker simpler, the list above covers most of the key comparison points between forex brokers so that you can be better prepared for a successful search.

In the end of this page you will find many more brokers that did not make the top list, you can still read our reviews of them and give your comments on them or share your experience from them.

But first we will go through some of the criteria and features you should look for when searching for the best forex broker for you.

Regulation

Most reputable online forex brokers take the step of submitting to regulation by one of the main financial regulatory agencies operating in their home country. Sometimes, they will even be regulated by more than one agency. Such regulation provides you with the security of knowing the broker’s operations are being overseen by an independent authority with the goal of keeping the business honest.

Is there a benefit to where a broker is located?

Location can make a big difference, especially if the regulatory regime in the country is top of the line. The most advantageous location has to be reserved for UK brokers, since London is the center of the foreign exchange business.

Forex Trading in the UK

Early in the last century, nearly 50% of the world’s foreign exchange was conducted using the Pound Sterling. Today, daily forex trading turnover in the London market represents 41% of the world, more than double that of the United States at 19%. If you choose a reputable UK broker, then you can be assured that the firm can draw upon a broad pool of experienced and professional staff in the UK.

From a regulatory perspective, UK forex brokers must also comply with one of the strictest regulatory bodies around, the Financial Conduct Authority (FCA). Once again, the pool of UK staff will be very aware of best business practices and related compliance issues, another reason to choose a UK broker, if at all possible. One must, however, be due diligent when choosing a broker that claims to have offices in London, since the marketing aspect of this location has caused many overseas brokers to set up a “shell” presence in the UK to gain your trust, but without the benefits listed above. If you prefer a UK broker, then make sure that they are headquartered in London and have a significant presence there.

Forex Trading in Australia

The Australian Forex/CFD/Cryptocurrency landscape is an intricate one, where at least three different types of brokerages peddle their services. There are unlicensed, unregulated brokerages with a global reach, whose services may indeed be accessible to Australian traders too. Then, there are financial service providers who are not based in Australia, but who are licensed by ASIC to peddle their products there. Finally, there are Australian born-and-bred operations, firmly under the authority of ASIC.

If you are looking for a forex broker in Australia or that offers services for Australians then make sure to go here.

Data Security

When you either enter or store vital personal information online, it can be subject to falling into unfriendly hands that may use it for their own personal gain. Accordingly, a top priority when choosing a broker is that they encrypt all data entered into online forms using industry standard SSL-encryption or better.

Another key issue involves the safe storage of data so that it will not be lost in case of disaster. Many online forex brokers use duplicate data farms with high security to assure the safety of your account information.

Dealing Spreads

Many day trading strategies become unsuccessful over the long term if your account does not have access to competitive dealing spreads. The spread is simply the difference between the bid price and the offer price for a particular currency pair and should be no greater than five pips in the majors and major crosses, with wider spreads often seen in the minor crosses and exotic currencies.

Commissions and Fees

Sometimes brokers are not content just to have you dealing on their spreads. In this case, they might charge a commission or fee for each transaction. Sometimes these are calculated on a per transaction basis or on a volume dealt basis. Additional fees might be involves in making withdrawals or deposits, so be sure to check that information to minimize your transaction costs.

Order Types

Most forex brokers handle the basic market, stop and limit order types. Nevertheless, some brokers also offer support for OCO (one-cancels-the-other) and trailing stops. If either of these more specialized order types would be suitable for your trading plan, then be sure that your chosen broker supports them and make sure that you fully understand the limitiation of these different order types.

Currency Pairs

Since more currency pairs often means more opportunities to profit, you will want to make sure that your forex brokers offers all of the pairs you might be interested in trading. Some traders also like to have access to precious metals like Gold and Silver, in addition to oil, especially if they will be trading the commodity currencies like AUD and CAD whose exchange rates can depend on commodity price fluctuations.

Deposit Required

Unless you are just interested in opening up a demo or practice account with the forex broker, they will usually require a minimum deposit to be made for you to get started trading forex. Often, the more money you place on deposit, the more features you have access to or the tighter your dealing spreads become. Make sure that you research the broker thoroughly before sending a deposit.

Account Types

Account types vary considerably between brokers, but most offer demo accounts for practice trading, mini accounts for newer traders with a low minimum initial deposit, standard accounts for more experienced traders with a moderate deposit, and finally VIP accounts for larger initial deposits. Here is a list of forex brokers that offers demo accounts.

Also, the features offered with each account type vary quite a bit among the various forex brokers, so be sure to see which reputable broker will offer you the best deal for the initial deposit you have available to you.

Leverage

Leverage refers to how much of a position you can control with a certain amount of funds allocated to it. Forex brokers currently offer leverage rates of as high as 500 to 1. What this means is that you can control a $50,000 trading position with just $100 allocated from your portfolio. Note that in the U.S. the maximum leverage is 50:1 for majors and 20:1 for minors.

Naturally, amplifying your risk by using leverage can result in larger gains, as well as larger losses, so be sure to use leverage wisely and avoid trading beyond your means.

Margin Requirements

Even though forex transactions are exchanges and not purchases of an asset like a stock or commodity, when the exchange rate moves, it creates credit risk for the counterparty showing a gain on the transaction. As a result, most forex brokers require that their clients place a certain amount of funds on deposit to cover such potential losses. This is known as the broker’s margin requirement.

Since margin requirements vary among brokers, you will want to make sure that the broker you choose has guidelines you can live with. Also, some brokers automatically close out trading positions when the amount of margin in your account is exceeded by trading losses, or according to other criteria, so be sure to understand such the implications of such policies for your trading business.

Trading Platforms

Most of the better forex brokers offer their own proprietary trading platforms for you to use to execute forex transactions with and to keep track of the market. These usually either take the form of web-based platforms that use access via your Internet browser or client-side platforms that you download to, install and run on your personal computer.

In addition, some brokers support independent trading platforms like the popular MetaTrader 4 platform that can be obtained free of charge and which many commercial forex trading robots are designed for.

Mobile Trading

Some forex traders require the convenience of trading and keeping in touch with the forex market via their mobile phone or other mobile device. Many brokers provide such services, so if this is important to you, check out what each broker offers in this regard and whether their software will work with your device.

Algorithmic Trading

Forex traders increasingly wish to automate their trading plans or algorithms to free up their time for other endeavors. They often do this by using a programming language to write down their decision process in an algorithmic format that can then automatically be executed by forex trading platforms that support this capability.

If you think you might want to automate your trading plan, check to see with brokers you are considering to see if they support this type of trading and how they do so.

ECN Brokers

ECN Brokers are brokers who use an Electronic Communications Network to provide price quotations and trading opportunities to their clients. The best way to picture an ECN is as an Exchange. Through an ECN, the broker puts various market participants into touch, directly. What that means is that it matches up trades so a seller will always find a buyer and vice-versa.

CFDs – Contracts for Differences

These days, CFDs are all the rage as far as online trading is concerned. These Contracts for Differences offer traders (and brokers) several advantages, which make the setup a very attractive one indeed.

A CFD is in essence a futures contract arrangement, between a broker (the CFD provider) and a trader (the client), the object of which is the difference between the current value of a traded asset (which can be just about anything, given the impressive market coverage of this financial derivative) and its value at the end of the contract. Find more information about CFD brokers here.

Market Alerts

Many brokers offers SMS or other types of market alerts to their customers. If you think this might be important to your trading business, look for this feature.

Support

Those new to forex trading will want to have better access to both dealing support and technical support. See what services each broker under consideration provides and whether it will suffice for your purposes.

Information Resources

Newer traders often require educational materials about the forex market and trading in general to get started trading forex on the right foot. If this is important to you, research what the brokers you are considering have to offer in this regard.

Also, many brokers provide sophisticated news feeds, like Reuters for example, as well as proprietary market commentary and other timely information.

Dealing Desk Access

Some traders like to speak to a personal dealer or advisor at the broker in order to obtain inside market information and advice. Others like to be able to make transactions over the telephone in a pinch. If either of these options makes sense for you, inquire with your potential brokers whether dealing desk access will be available to someone with your anticipated initial deposit.

Managed Forex Accounts

There are three types of managed forex accounts, Individual, Pooled and PAMM accounts. Here is a list of recommended managed forex accounts that offers this kind of forex accounts.

Read our reviews of more forex brokers that did not make our top list above:

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