At TradingForexSites.com we understand the importance of finding the right forex broker for your trading style and needs. We are committed to helping you do this, by providing accurate, current and unbiased reviews for all the forex brokers we list.
From beginner to professional, whatever your place in the trader spectrum, you should always choose a broker which is safe and secure. Rest assured we only feature fx brokers that are regulated by a trusted, top-tier authority.
There is a very large number of online forex brokers, so choosing which one is right for you can be complicated. Here, we will attempt to make this task easier by outlining what aspects and features you should be looking out for. We will break this down into the following areas:
This aspect is of vital importance as the broker is responsible for your money. Regulation by a top-tier authority guarantees that the broker will hold the highest standards regarding security, transparency and integrity.
The broker should hold your funds in segregated accounts. This means that the broker can access your account to fund your trading activity but will not be able to withdraw funds. Funds in segregated accounts are withheld from creditors in the case of bankruptcy.
If the broker operates in more than 1 jurisdiction then they should also be regulated by the relevant authorities in each geographical area. A list of top-tier regulators follows;
The trading platform is the traders’ main tool. It allows you to access the market prices, place entry and exit orders, or enter and exit a trade. The most common platform for retail traders is the MetaTrader MT4, closely followed by the newer version MT5.
Other options include cTrader and ProRealTime. All these platforms offer state-of-the-art technical tools and are open source. If you have the patience to learn or knowledge to write code, you can implement new tools or create automated trading bots.
However, many FX brokers offer their version of trading software. These platforms are built in-house and are available to traders that open an account with the broker. The broker should offer a demo account where you can test their platforms and services before funding an account.
Technical analysis is one of the main components of FX trading, whether you're day trading or swing trading. Whichever platform you are considering must have a full array of technical indicators and drawing tools.
You should also be able to trade directly from the chart, manage your stop loss and take profit, as well as manage your margin. Preferably, the platform also has a live news feed and charting features such as the one offered by TradingCentral.
A mobile app of the platform should also be available as we live in a day and age where we can manage our lives on the go. Mobility also applies to FX trading, and the apps should offer all, or the majority, of features available on the desktop or browser versions.
Commissions are a necessary cost of trading, which is how brokers generate their income, allowing them to offer you the service. Of course, we want to pay as little as possible, but we still want a quality service.
Commissions are usually earned through the bid offer spread. This spread is the difference in pips between the bid and the offer. Usually, a broker will receive the price from a bank and add a few pips. The extra pips added are the broker's fee.
Some brokers do not add extra pips to the prices they receive and instead charge a commission. The broker will reflect this cost in your account.
There are basically two business models for FX brokers, but first, let's familiarise with a few phrases related to FX trading with online brokers
NDD – Non-Dealing Desk
DMA – Direct Market Access
STP – Straight Through Processing
ECN – Electronic Communications Network
In one model brokers can quote the prices you deal on themselves, known as market-making. In the other model they receive prices and pass them on from the interbank market. When they pass the prices on, they are considered NDD. An NDD broker is not taking the other side of the trade. You trade through the broker directly with the counterparty quoting the price, also known as DMA.
When brokers quote the price themselves, they also take the other side of the trade. Bid offer spreads with market makers tend to be fixed, while an NDD broker will vary its spreads according to the prices it receives.
A market maker may also be susceptible to price manipulation, whereas an NDD broker is not aware of your positions, and simply requotes the prices it receives. NDD brokers receive their prices from various institutions through an electronic network, known as an ECN.
Thanks to computer technology these networks create a direct link between you, the broker and the market maker. The whole process from execution to confirmation of the trade is automated and this is referred to as STP.
There are two types of accounts, standard and professional. The naming may change from broker to broker, as some brokers offer extra perks for funding a professional account. The marketing drive then dictates the names each account has.
Standard accounts are limited in the amount of leverage they can trade with, and brokers are no longer allowed to pay trading bonuses to their clients. Leverage is limited by the MiFID II regulations, usually a maximum of 30:1 for some markets.
Professional accounts can access much higher leverage, depending on the broker, it can be as high as 500:1. However, with a professional account, you will not benefit from negative balance protection. You will also need a higher funding balance, and declare you meet certain requirements to open a professional account.
Customer support should include access via online chat, email and telephone. If the broker is a market maker, you should preferably have access to the dealing desk via telephone. Check which languages are available, some brokers offer a limited number of languages. Support should be available at least 24 hours 5 days a week, although some offer this service 24/7.
A forex broker gives professional and retail traders access to the multi-trillion-dollar forex market. A broker allows you to place trades in the forex markets, to buy and sell the FX pairs offered by the platform. Brokers have several connections with financial institutions, such as banks, that supply them with forex prices. The broker then passes on these prices to its clients, plus a fee.
Brokers may offer trading in the physical forex market, or undeliverable contracts for forex pairs, known as CFDs (Contract for Difference). A broker should be regulated by a top-tier authority that will guarantee the correct handling of your funds and proper trading practices.
Yes, you do. Once you have chosen the broker you want to trade with you will need to open an account. You will then need to send funds to the account, the cash you send will be used as collateral (margin) to guarantee your trading activities.
Basically, there are two types of brokers, non-dealing desk (NDD) and market makers. NND brokers supply traders with the market price from the financial institutions they are affiliated with. In this case, the broker acts purely as an intermediary. In the case of market makers, the broker quotes the price and takes the opposite side of the trade.
Forex trading costs consist of 3 aspects, bid offer spread, commissions and swap fees. The bid offer spread is the difference between the price you can buy an FX pair and the price you can sell the same pair. Commissions are extra fees some brokers add to the price you trade at.
Swap fees are generated when you leave your positions open overnight. Positions that extend one trading day create financing costs. They are also referred to as carrying costs, depending on the currency pair and on which currency you are long of, financing the position may generate a net cost (debit) for you or a net income (credit).
Our choice for the best broker for professional traders goes to IG. This broker not only is the oldest spread betting platform out there but also offers top-tier services across the board. They have extremely competitive bid offer spreads greatly reducing your trading costs. Multiple state-of-the-art platforms, extensive research including videos and a plethora of markets to choose from.
There is no universal answer to the question, as it is a very subjective matter. Many brokers offer in-house proprietary platforms, you can usually test these services with a demo account. Possibly the best-known platforms are the MT4 and MT5 from MetaTrader. There are also some other platforms such as ProRealTime, which do come at a cost but offer extra features not available on all platforms.
Ultimately, it’s a matter of personal choice. Our advice is to open a demo account with the target brokers and try the platforms they have available. MT4 and MT5 are available for testing in a demo account with any broker. Platforms like ProRealTime are also usually available for testing, although you may have a specific time limit.