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One of the largest cryptocurrency exchanges worldwide, Binance, acquired crypto data website CoinMarketCap “for an undisclosed sum”, the companies announced on Thursday. Rumor has it that the transaction was worth $400 million. Binance CEO Changpeng “CZ” Zhao assured the public that CoinMarketCap will continue to be run independently from Binance to ensure neutral and transparent data. Zhao also said that a number of new services are already under development. Some of these include enabling user registration as well as the creation of watch lists and individual portfolios. Read more
Because of the extraordinary situation in the wake of the corona virus outbreak the Cyprus Securities and Exchange Commission (CySEC) gave its brokers more time to report their annual volumes. The original deadline for submitting the reports was April 12. Read more
Coronavirus related fraud has increased by 400% in March, Manchester City Council reports, citing data from Action Fraud, which has received over 100 reports from victims who have lost nearly 1 million GBP. Counties across the UK have also issued warnings about scams exploiting fears about the corona virus pandemic. A wave of phishing text messages and emails are send daily by scammers who present themselves as representatives of the World Health Organization (WHO) or the Centers for Disease Control and Prevention (CDC) in the UK and who promise to send the names of coronavirus positive patients in the victims’ neighborhoods in exchange for bitcoins. Read more
In the wake of the coronavirus pandemic the Financial Conduct Authority (FCA) in the UK grants regulated firms additional 6 months to publish audited annual reports. The concern is that many companies may be pressured financially because of the increased market volatility. The measure is coordinated with the Financial Reporting Council (FRC) and Prudential Regulation Authority (PRA) In the guidelines published on the FCA website the regulator advises regulated firms to use their capital buffers to support their positions and those which have to exit the market to do it in an orderly way “while taking steps to reduce the harm to consumers and the markets”. Read more
In a new guideline published on Tuesday the Commodity Futures Trading Commission (CFTC) in the U.S. defined what an “actual delivery” of a digital asset means. The new regulation implies that there could be penalties for trades that don’t let the buyer take physical possession and control of a crypto coin within 28 days – the transit period after which trades in commodities like oil and soybean start to be considered futures contracts. According to the current rules exchanges and traders should deliver any physical commodities unless they are futures, traded on a CFTC regulated exchange. Read more
Sophos, an IT security company reports of a new form of scam where criminals send extortion e-mails to victims, threatening to infect them and their families with coronavirus unless they pay 4000 USD in digital currencies. Scammers usually threaten the whole family, including children and elderly people. Experts at Sophos note that the e-mails are pretty convincing and usually include publicly available personal information about the victims to evoke more panic. Other forms of scam include e-mails purportedly send from the World Health Organization (WHO) asking for donations, again in bitcoins or other crypto coins. Read more
The Swedish Financial Supervisory Authority (Finansinspektionen or FI) warned against unregulated broker JTtrader on Monday. More specifically, the FI noted that the broker is neither authorised by it, nor by another EEA regulator, and therefore isn’t allowed to conduct securities business or other financial services in Sweden. JT Trader says to be owned and operated by JTTRADER FINANCIAL SERVICES LTD, which is presented as an international company with branches in New York, USA, and Toronto, Canada. Unfortunately, the company isn’t licensed in the US, Canada, nor anywhere else. Read more
The United States Securities and Exchange Commission (SEC) has filed a complaint against David Schmidt, a former Republican state senator, as well as two other people for their role in the alleged $4.3 million crypto scam “Meta 1 Coin”. SEC has also managed to secure an asset freeze order and other emergency relief to stop the ongoing securities fraud. The SEC’s complaint alleges that Schmidt, Robert Dunlap and Nicole Bowdler marketed and sold a digital asset called “Meta 1 Coin” which is in fact an unregistered securities offering. Thus, the defendants raised $4.3 million from around 150 investors, some based in the U. Read more
The Australian Securities and Markets Authority (ASIC) will suspend some of its supervisory activities that are not “time critical”, as the regulator focuses on its coronavirus response. According to some analysts that could lead to a delay in ASIC’s planned leverage restrictions, as the regulator says the change in its policies will last at least until September 30th. “ASIC is committed to working constructively and pragmatically with the firms we regulate, mindful they may encounter difficulties in complying with their regulatory obligations due to the impact of COVID-19,” the Commission said in a statement. Read more
The Commodity Futures Trading Commission in the U.S. has issued a warning against the alarming rate at which corona virus related scams have flooded the markets, preying on the fear, uncertainty, and doubt in the wake of the pandemic. CFTC says it wants to raise public awareness during the period of market volatility. “During this period of market volatility, we want to ensure the public has important information to help detect and stop fraud. We will aggressively pursue misconduct in our markets tied to the impact of the coronavirus pandemic. There is never an appropriate time to prey on innocent people’s fears,” the CFTC said in a statement. Read more
Forex Bonus Programs
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With its new promotion program OctaFX grants its clients a 50% trading bonus on each new deposit. The bonus funds are fully withdrawable after reaching a certain trading volume equal to the bonus amount divided by half in standard lots. For an illustration purpose, if you deposit let say 400 USD, your 50% bonus will add up another 200 USD to your account. And after you trade 100 standard lots (you can do that quite easily using leverage as high as 1:400), you will be able to cash out both the bonus and the profits generated with it. Bear in mind that with a 50% trading bonus, your profits could be 50% higher. Read more
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Global award-winning brokerage FXTM currently runs a loyalty programme that allows its clients ro reduce their trading costs by up to 25%. By reducing the cost of every trade from 1$ to 5$ per standard fully completed lot, the broker actually provides traders with more vbalue for their dollars. All you have to do is open a live account with FXTM and not participate in any other active Programme of FXTM. This cost reduction programme is availeble to Standard or ECN Zero accounts, which require an initial investment of $100 or $200, respectively. It is applicable to the following trading instruments: all forex, CFDs (excluding CFDs on shares), precious metals and commodity futures. Read more
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End date: N/A Who grants it? FBS is an international regulated broker performing globally in 19 languages for over 13 million clients. The company operates under the IFSC and CySEC licenses in 190 countries, and won over 40 international awards for the most diverse and secure services. Who can get it? New and existing clients who open a special bonus account. What’s the catch? Both bonuses help traders boost their income with two different techniques. • 100% Deposit bonus doubles your deposit, allowing you to get up to $20,000 to the deposited funds. • Trade 100 bonus gives you free $100 for trading. Read more
$88,8 Welcome No-Deposit Forex Bonus by FBS (available to clients from Malaysia)
Who grants it? FBS – an award-winning broker licensed in Belize, that has more than 8 years of experience in the forex industry. It offers its clients competitive trading conditions, wide range of trading accounts, payment methods, several trading platforms, as well as various promotions. Who can get it? The lucky bonus $88,8 is a special offer to Malaysian traders who open new accounts. Each new client from Malaysia can get the $88,8 no-deposit bonus after opening a special account and verification of his or her e-mail and phone number. What’s the catch? Everything about this bonus is somewhat related to the number 8. Read more
TOP FOREX BROKERS
BINARY OPTIONS BROKERS
Best Forex Broker?
There is no such thing as a best forex broker. While all traders share the same ultimate goal – to make profit – they are all different in skill level, portfolio size, trading style and strategy, etc. In other words, my best forex broker might not be your best broker and vice-versa. There are, however, factors that you can use as pointers when choosing a broker.
- Regulation: Check where your broker is based, what regulators it reports to, what licenses it holds, etc. Brokers do go broke and while this happens rarely, you would want to know your money is protected.
- Trading Platform: Most brokers offer the industry’s most popular platform – MetaTrader 4 (MT4), but many also support their own platforms that are usually just as good.
- Execution: You can choose between ECN/STP/NDD and dealing desk execution. ECN brokers serve as mediators between traders and liquidity providers, charging a small commission for that; brokers who offer dealing desk trading (also known as market makers) trade against their customers but are able to offer tighter spreads. There’s no saying that one type is better than the other – it all depends on your trading strategy and style.
Forex trading carries a high level of risk and may not be suitable for all investors. Before you engage in trading foreign exchange, please make yourself acquainted with its specifics and all the risks associated with it. All information on ForexBrokerz.com is only published for general information purposes. We do not present any guarantees for the accuracy and reliability of this information. Any action you take upon the information you find on this website is strictly at your own risk and we will not be liable for any losses and/or damages in connection with the use of our website.
All textual content on ForexBrokerz.com is copyrighted and protected under intellectual property law. You may not reproduce, distribute, publish or broadcast any piece of the website without indicating us as a source. ForexBrokerz.com does not claim copyright over the imagery used on the website, including brokers’ logos, stock images and illustrations.
Trusted 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. OctaFX or FXTM review page.
Safest Forex Brokers 2020
*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.
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.
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.
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.
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.
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.
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 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 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.
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.
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.
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.
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 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.
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.
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.
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.
Forex or Foreign Exchange is the decentralized global currency market, which is now one of the most liquid industries in the world. Though currency trading an ancient form of business, the online FX industry is comparatively young and it touched 1 trillion USD milestone only 20 years ago in 1995. But since then, FX market has been getting the expeditious expansion and today the size of the FX market is more than 5 Trillion USD per day which is equal to more or less 30 days of trading in New York stock exchange.
About Best Forex Broker Reviews
However, as we already told Forex is a decentralized platform, so trading doesn’t take place under any centralized authority. Rather, you need to register yourself with a forex broker as your trading media. Although you’ll find lots of FX brokers & their reviews online, focusing only on the market of London, New York, Sydney, Tokyo, Frankfurt is pretty enough to start and run your FX career.
How to Choose the Best Forex Broker
Since Forex is a virtual industry, you have no easy options to check the physical existence of the brokers. Furthermore, millions of brokers are available in the market and tons of brokers are entering the market every year. In most of the cases, it makes the selection of the brokers tougher for the newbies. That’s why choosing a broker for trading is the primary challenge for a retail trader.
But you shouldn’t be worried about it because if you’ve proper knowledge on the selection criteria of the forex brokers, no one or nothing can stop your success as a Forex trader. And according to our research, we’ll suggest you check the following features in a broker:
With which regulatory bodies the broker is connected.
Feature 1: Regulations
At the beginning of online FX trading, many scammers used to fake their skills & experiences to deceive thousands of traders. Even in many cases, these scammers didn’t have real broker amenities. They just used to made a good website & wrote a few nice words on the site to convince the retailers. Frequently, the presence of these scammers started increasing online and their wicked acts were exploding beyond expectation.
As a result, the Forex industry was being questioned again and again by the traders & forming regulatory bodies became inevitable.
Finally, to stop this anarchy & make a safe passage for the traders, different regulatory bodies started operating all around the world. These regulatory bodies define a set of rules that can be followed only by a quality forex broker. These rules include the capital of the broker, locations, policies, etc.
Only those brokers can be a member of those regulatory bodies, who meet these criteria. And that’s how the scammers are filtered out from the industry nowadays. So, before choosing your broker you must need to check with which regulatory bodies they are connected to.
The well-known regulatory bodies are:
- US Security & Exchange Commission (USA)
- Financial Industry Regulatory Authority (USA)
- Financial Services Agency (Japan)
- Swiss Financial Market Supervisory Authority (Switzerland)
- Australian Securities and Investments Commission (Australia)
- Cyprus Securities and Exchange Commission (Cyprus)
- Federal Financial Supervisory Authority (Germany)
Where the broker HQ is located.
Feature 2: HQ Location
You can find brokers worldwide & everyone will give you the amenity of trading online. But still, look for the location of their headquarters because it means a lot to FX industry.
For example, most of the top-rated regulatory bodies are located in the UK or USA. And that’s why most UK or USA brokers can connect them to those top rate regulations. On the contrary, India or middle east based regulatory bodies are weaker than other regulatory bodies which result in weaker regulations to the broker licensed in India.
Additionally, USA or UK brokers also open their branch in those countries. Therefore, if you check the HQ location first, then maybe you can get those strongly regulated brokers near to your house. Nonetheless, to open a trading account with USA brokers you need to share all your TAX info. So if you have a problem to share those documents, then you can go to the UK or Australia based broker.
Which Trading Platforms they are providing for the retail traders.
Feature 3: Trading Platform & Software
Trading platform & software are the main keys to you & FX market. That’s why you need to check which trading platform or platforms are being offered by the broker. Some broker offers their own trading software where some of them offer third-party platforms. And each and every broker will offer you a demo account with some demo balance so that you can practice on their platform before starting real trading.
In that case, we recommend you to choose a broker who provides Meta Trader 4 platform because, more than 80% good brokers provide this platform for its wide range of technical indicators like one-click trading on the platform, reducing risks by stopping loss orders or trailing stops, detailed charting package, etc. This platform is also known as MT4. So, if you see the term MT-4 anywhere, then don’t get confused. MT4 & Meta Trader 4 are the same platform.
The other well-known platforms are C Traders, Robinhood, Think or Swim, PTMC, Pro Real-Time, Pro Trader, Trading View, Interactive Broker, etc.
What Ratio of leverages, they are offering to the traders.
Feature 4: Leverage
According to statistics, 95% of the forex traders lose their capital within the first 6-8 months. The main reason for this is the expectation of making a large & quick profit. But the truth is the more you can wait, the more you can earn. And another truth is the less you’ll invest, the chance of losing more money will also be decreased. But if you invest less & wait for a long time, it means you have to wait year after year for making a big profit.
“So, is there any way to earn maximum money with a small amount of investment?”
And here the term ‘Leverage’ comes where you can trade up to 400 times than your investment. Leverage is basically a loan given to the retail trader by the brokers. The common leverage ratios are 50:1, 100:1, 200:1 etc. In 50:1 leverage ratio, you can trade up to 50 times of your investment, in 100:1 leverage you can trade up to 100 times & so on.
To trade $1,00,000 or currency with a 50:1 leverage you need to deposit minimum $1,00,000/50 = $2000. This minimum amount that you need to deposit in cash is called the margin which we’ll discuss later in this article.
But you must remember the fact that brokers will give you the loan, but they will not take any risks. It means if your trade moves to the opposite side, then after a certain percentage reduction of your real investment broker will notify you to deposit more or they can also make a margin call which means terminating the trade.
Usually, this margin call occurs when a trader’s investment reduced to 30%. For instance, suppose your margin investment is $1000 & leverage ratio is 100:1. It means you can trade up to $1,00,000. Now if your trade value reduced to $99,930 the broker can shut down the trade to stop his loss.
How much initial deposit you need to make for starting FX Trading.
Diversity and inclusion of withdrawal methods.
Feature 5: Deposit & Withdrawal method
You can deposit & withdraw your money from your debit/credit card, PayPal or any other different payment methods. Additionally, some brokers offer their own branded payment method too. Nevertheless, please check the available deposit & withdrawal method before opening your account.
Because maybe your chosen broker doesn’t offer the payment method which we used for your daily life. Although you can open a wallet under any payment processors especially for FX trading, it’s better using the payment method you already have. It’ll save your expenses & give you better reflex of calculation.
How much Spread, Commissions & Fees they are taking from retail traders.
Feature 7: Spreads, Commissions, and Fees
Now, maybe you are thinking about how a broker earns?
Here is your answer. The two way of their earning is spread & commissions or fees. Let us explain them.
Spreads are again of two types:
However, in terms of everything, we’ll recommend you to choose a broker who offers fixed spread because it will help you to make a straight calculation. But, the floating spread is also recommended for the traders who look for smaller spreads.
- Commissions & Fees: This charge is calculated as a percentage of the spread. You need to know the payable commissions or fees carefully before choosing your broker.
Your information security, availability of resources for better trading.
Feature 6: Data Security
To open a Forex account, you need to share all your personal & financial information like your name, birthday, credit card number, etc. Anyone with this information can hack your financial accounts and make you completely destitute.
In a similar manner, there are lots of scammer brokers online who took the information of the traders illegally and sell them to the black market. Even sometimes good brokers also fall into security loophole by the scammers and lose their customer data.
Therefore, before signing up to a broker, research their past history & technical specification carefully. And during filling any kinds of web forms, check SSL encryption sign to ensure your data safety on the server.
Available account types to launch your initial trading.
Feature 8: Account Types
In terms of your capability and initial capital, you can choose one of the following account types for your FX trading.
- Micro Account: If you have low initial investment, then you can go for a micro account. Here a single trading lot is equivalent to 1000 units of instrument traded.
- Mini Account: If you have investment more than to open a micro account but less than standard account then probably you are eligible for opening a mini account for trading. Here a single trading lot is considered as 10,000 units. The pros and cons are almost the same as a micro account.
- Standard Account: In these types of accounts, 1 trading lot is equivalent to 1,00,000 units of instruments traded. But to open standard accounts, you need higher capital than mico & mini accounts. But if you want to play a big game in the FX industry or you are a professional, then the standard account should be the first choice of yours.
Minimum Margin Requirement to start a trader account.
Feature 9: Margin Requirements
We already discussed a little about margin in our Leverage section. And you already know how you can amplify your trading ability by taking leverages. And the percentage of real currency that you need to deposit is the margin requirement.
Suppose, your broker is offering 50:1 leverages to you. It means your minimum margin requirement is 1/50 = 2%. For instance, in a 50:1 leverage ratio, you need to have a minimum of $1,000 in real cash in your margin account to trade up to $50,000. For larger trade, you need to deposit more to maintain 50:1 leverage.
Since this margin requirement increases your potential profit, so whether you fully use it or not, choose a broker with a lower margin requirement.
What helpful guideline or resources they are sharing with the traders.
Feature 10: Information Resources
A good source of references and materials can be a lighthouse of your FX trading. And if broker itself provides these resources how awesome it will be, isn’t it?
Yah, to help one’s journey to forex trading, most of the good brokers provide these basic resources:
- Learning Material: For beginners, most of the good brokers provides learning books & videos, practice materials, lectures, etc. Additionally, they also arrange webinar, online courses, etc. regularly.
- Demo Account: Theoretical learning is not enough to start your trading. That’s why good brokers also allow traders to open a demo account with demo currency. And using that accounts you can enter the real market, although your buy/sell will not be counted really. But you can see the output of your strategies directly from that account. So, if you are a beginner, then leave the broker doesn’t offer a demo account.
- Latest News & Statistics: Passing the beginner level doesn’t mean you’ve learned everything. Rather it means you are just ready to trade. And to be a successful trader, you need to keep yourself updated till your last breathe. And good brokers will take this responsibility & keep yourself updated by giving latest news & statistics of the FX market by their website or newsletter.
How active their support team is.
Feature 11: Support
Whether a trader is a beginner or expert, he/she always needs relevant supports from his/her broker. At the beginning stage, sometimes traders don’t even know how to buy or sell. In these cases, a strong support team can always guide you by giving relevant tools, references constantly until you can do trade on your own.
And after gaining some skills on the market, you need to maintain 24/7 keep in touch with your broker. So if they don’t have a strong & live support team, you may miss valuable trades. That’s why check a broker’s quality of support before relying on them.
What type of broker they are.
Feature 12: Broker’s Type
In your journey to FX trading, you need to go through different types of brokers. These brokers are known by some common terms like NDD, STP, ECN, etc. You’ll also hear other terms like ‘market maker.’ But don’t worry about it because to give you a clear perception of these terms we are going to discuss them below:
Usually, the brokers are divided into two major types:
- Dealing Desk Broker: In these types of brokers, market makers process the trading instructions of their clients through a dealing desk located inside the broker. It means when you launch your trade, the broker will collect all the rates & data from the market makers through their inside desk & return to you.
- Non-Dealing Desk Broker: In this case of FX trading, some brokers process trader’s instruction by third parties. This way saves their time and hassles of processing client’s instruction inside the company.
These Non-Dealing Desk or NDD brokers are again divided into two parts:
- Electronic Communication Network (ECN): These brokers use a computer-based trading system where client’s Buy/Sell is processed in the broker’s computer system immediately through the ECN network. ECN network adds all the information to the client’s order from the market makers, execute the order & then return it to the broker as well as to the clients. The whole process is automatic & no dealing desk is necessary.
- Straight Through Processing (STP) Broker: These brokers forward client’s order straight to a third party. These agencies execute client’s order by the forex dealer’s dealing desk & then return it to the broker again.
But we’ll recommend you to choose NDD broker to avoid possible manipulation by scammers.
How much or how often they announce bonuses for the traders.
Forex Bonus and Promotion
Feature 13: Forex Bonus and Promotion
To motivate the retail traders & attract potential clients, brokers often announce bonuses. We are going to discuss some of these bonus types those you’ll see quite often from your beginning stage to the ultimate level. The name of these bonuses may be different for different brokers.
- Welcome Bonus: For attracting new traders, some brokers announce this bonus. In this bonus, you’ll get an initial trading credit without depositing any money. Although there is a big probability of manipulation, some brokers proceed to this policy.
- Deposit Bonus: In this case, a trader’s initial deposit becomes double or something like that. It means if you deposit 100$, you’ll make a trade of 200$. And you need not have any leverages, or you need not maintain any margin requirement. You can trade with this whole money without any limitation. But you can’t redeem this bonus money.
- Bonus on Spread: In this case, the broker gives a discount on the spread. For example, for a USD-CAD trade suppose the asking price & bid price is 1.2345 & 1.2340. It means the spread is 0.0004 or 4 pips. Sometimes brokers reduce this asking price to one or more pips from the regular price as a bonus.
- Festival Bonus: During different festivals like Christmas, Black Friday, Thanks, Giving Day or any other national festival brokers usually announce different bonus scheme on trading.
Besides these bonuses, brokers often announce bonuses to retail traders in terms of their loyalty. Additionally, they arrange some promotional contests and the winners get an exclusive bonus for retail trading.
What is Pip & How it is calculated?
Broker Vs. Market Maker Vs. ECN
After reading these broker types, you might be confused among the terms like brokers, market makers & ECN. Here are there differences between them:
- Brokers host the whole trading process. They forward customer’s instruction to market makers; after the execution, they collect the data & update the profile of the retail traders. For each trade, brokers charge a small commission as their fee.
- Market Makers or Forex Dealers are the experts in making the trading rates. Usually, they execute the trader’s instruction on behalf of brokers. In the case of FX market banks, hedge funds, or some third-party agencies play the role of market makers.
- ECN doesn’t execute any trade. Rather they make a bridge among the market makers where the market makers transmit the valid price for a certain volume to ECN, STP, or other third party liquidity service provider. Then, ECN spread that price to its whole network & retail traders can see the rate.
Why are Market Makers Necessary for FX?
According to the opinion of many people, forex is a boring and highly risky trading industry. But different research & statistics show that in most cases, failure of choosing the right broker results in all these boredoms & risks. Otherwise, FX trading is the most captivating virtual industry for the business-minded people around the world.
For that reason, we tried our best to enlighten you with these broker selection features above so that your journey to FX trading becomes more fascinating. So, try to check these factors when reading forex broker reviews and ensure a safe & sound forex trading. Godspeed.
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