Leading Forex Brokers Compared - 2018

Your Forex broker is уоur соnnесtіоn to thе market аnd they will рrоvіdе the essential tools, leverage and data you will need to trade. When we compare brokers, we have a very strict guideline in doing so. Therе аrе аt 7 main selection criteria tо be соnѕіdеrеd in part of the decision which are in the FAQ below.

First, What are Forex Brokers?

Forex Brokers are legal entities that place your trades for you on the currency market. Forex brokers take your order and execute it, and then close the trades for you when you or your platform indicates.

FAQ About Forex brokers

How to Compare Forex Brokers?

There are a lot of different brokers and their trading conditions are always trading. In order to compare brokers, you need to know what makes brokers different technically, and then from that shortlist find one that suits you best. We only feature brokers we believe are good for the trader, so we have already started that shortlist for you. We have strict editorial guidelines for reviewing brokers that can be reviewed on our about us page.

Which broker to choose comes down to a couple different aspects.

Market Maker vs. ECN/STP. There are two distinct ways that a broker can manage your trade after you have requested it to be placed on the market. Market makers may interfere with it indirectly while the ECN/STP will allow the trade to go market without that conflict of interest.
Regulation is your only safety net with a broker. Ensure that your broker is regulated with one of the major 3 regulators I listed above and you should be fine. Regulated by 2 is always better than regulated by 1.
Spreads on the most commonly traded currency pairs called the major currencies. Brokers with high spreads are hard to make a profit with, as the broker will take the first part of your profit as their fee for handling the trade.
Account types are key. A broker does not need to offer many, but they need to be clear and you need to understand how they are different from each other. Before you fund an account ensure your expectations for what you are going to get are aligned with what your broker has told you directly.
The software platform support by the broker is important. Many brokers will use MT4 or MT5 (MetaTrader) which is a traditional industry standard, but other brokers will offer their own platforms that add on additional features like social trading that you may want.
Customer support is important. Feel confident you can get the attention of the broker when you need it. Opening hours should be clearly posted on the page, and if a dedicated account manager will be assigned, that is even better.
Withdrawal options are central to trust and is one of the highest priorities for professional traders. The rules, fees, and timeline for getting your money back should be very clear. Companies that deliberately go slow here should not be engaged.

Things I don’t worry about when choosing a broker.

You don’t need 3000:1 leverage on your account if you have some sense of risk management. You probably are only going to use up to 100:1 leverage for most of your trades, so don’t be attracted to the broker with the highest leverage.
Minimum deposit. If you are going to use leverage on your trades, you need to make a deposit that will allow you to hold the position open without you broker closing it for you. Brokers will close your trades in a margin call if you don’t have the funds in your account to protect against a loss. So, brokers with low minimum deposits are not better than those with $200 minimums.

Will my broker call me?

Yes they will, and you should answer the phone. There are a couple reasons why they call, and all of them are in your interest.

A broker is an investment partner – just like a bank or any stock trading company. You should talk to them. It is not a sales call.
They want to introduce themselves, build trust with you, and see if you have questions.
Start the KYC (Know Your Customer) process. This is a process completed by all financial organizations to ensure that you are who you say you are, and it prevents money laundering from happening on the platform.

The calls are quick, and account managers are happy to call back at a scheduled time, so take this time to get to know your broker.

My Experience With Top Brokers

In my time trading and researching brokers, I have a few comments on those who I consider the best for new traders. Different brokers have characteristics that stick out, making them better than others. So this is a little of my personal experience with a few select brokers to give you a feel for how I compare them to each other, and why I recommend them.

AvaTrade – Best For Beginners. Reliable Broker, Good Onboarding & Decent Trading Conditions (Read AvaTrade Review)

Avatrade is a fully regulated broker in Australia with good educational resources and support for MT4. I appreciate that Avatrade has the combination of good leverage, a low minimum deposit, and tight spreads; this setup will give you a good starting point for successful trading. Avatrade offers mobile trading so if you want to trade on the go, this could be a good feature for you.

EasyMarkets – Most Innovative & Fun Market-Maker. Reliable Broker trying to reinvent all the time, Good Platform Choices (Read EasyMarkets Review)

I enjoy trading with Easymarkets. I have always felt that they make it easy for me to trade, and their customer service is the highest I have ever had with a broker. The spreads can be low as a VIP member, and the leverage is high, which gives me the ability to trade in the way that I want without restriction. EasyMarkets has been around for a while, and they are regulated by both the Australian and European regulatory bodies – the name is one of the more trusted out there. I recommend this broker to those who want top customer service, good leverage, decent spreads and comfort in knowing they are trading with one of the best.

XM – Best Account Options – Best ASIC Regulator, Good platform, good onboarding – (Read XM Review)

If you are looking for a serious broker, with low first deposit amounts then XM could be for you. XM has a number of account options including one account called “Zero” where you have Zero pip spreads on some of the major pairs. This combined, with the massive leverage, strong regulation, and good customer support make this a good place to trade.

eToro – Best Social Broker – Great cryptocurrency offering, fun broker, unique platform – (Read eToro Review)

Etoro were pioneers in social trading. I really enjoy the social aspect of the broker, where you can follow what investments other traders are making and chose to follow them and mimic their trades or learn from their analysis and understanding of the market. Etoro has designed their software to be easy to use which appeals to the novice trader and those who want to trade on mobile devices. This is probably the best choice for new brokers who want to learn by watching others rather than going it alone

How Much Should I deposit?

Advісе given tо new trаdеrѕ is tо ѕtаrt оut small, whісh mеаnѕ looking fоr a Forex brоkеr who wіll lеt уоu ореn an account with about $250-$500. Micro accounts with a smaller minimum deposit are available, but if you are going to use leverage in your trades, you will need to have deposited funds to be able to take the potential loss.

ASIC has good advice for those considering the amount to deposit into an account. It needs to be in accordance with your own trading plan.

If you want to develop your own plan, start by writing down your goals or setting up a simple spreadsheet. Think about what you want, when you want it and why. Work out how much you need to reach your goals and how much you need to set aside each pay period.ASIC's Moneysmart Guide to Investing Between the Flags (pdf)- Page 26

If you are considering borrowing money to invest in this market, they continue with their warning as it comes with additional risk.

Borrowing to invest is a high-risk investment strategy for experienced investors only. If you are looking to use this strategy, ask yourself these questions:

Do you have secure income from other sources such as your salary to top up the loan if you get a margin call?
Do you have a high marginal tax rate to make the most of any tax benefits?
Are you in it for the long haul? Gearing is generally a medium- to long-term strategy (at least 5 to 10 years).
Is your strategy flexible enough to allow for changes in your personal circumstances, such as having children or a drop in income?
Will you lose sleep at night if your investment performs poorly?

ASIC Moneysmart Guide - Risks of borrowing to invest

Are Forex Brokers Regulated?

The vast majority of Forex brokers are regulated. But not all brokers are regulated by all authorities, and a broker can decide if they want to apply for regulation at any time they wish. It is often the case that the larger the customer base of a broker, the better chance that the broker has regulation is more than one jurisdiction.

There are regulators from all over the world that have a specific set of laws and auditing procedure they require brokers to adhere too. Regulation has been put in place to ensure that Forex brokers are reliable, do not cheat their traders, do not launder money.

A couple of the larger regulators of Forex brokers are:

ASIC (Australia)

A very strict and traditional regulator. They are not usually the ones to set new policy, but they have a very strong auditing procedure and have a good track record of protecting clients. Official Website

CySEC (Cyprus – EU)

CySEC is a leading regulator when it comes to policy and was the first regulator to start banning bonuses and aggressive marketing to new clients which had a strong positive impact on the industry. They are seen as the regulator that is fastest to adapt to the changing market and works alongside other major regulators to maintain a safe trading environment. Official Website

FCA (UK)

Another traditional and some would argue, the best regulator of the group. Very strict policies surround FCA regulated brokers and this can be seen as the best regulation you can get. Official Website

CHOOSE A BROKER

Cryptocurrency – What brokers trade Bitcoin?

A number of Forex brokers offer cryptocurrency pairs. These are usually pairs that contain one major currency and a cryptocurrency. An example would be the Bitcoin to US Dollar or BTCUSD.

There are more and more brokers that offer a wide range of cryptocurrency pairs, and some brokers offer a limited offering on currencies only so they can get their foot into the game. If you really do want to trade crypto, then you should explore the currencies offered before depositing.

Which forex brokers use MetaTrader?

Not all brokers support MetaTrader but most of the older and traditional brokers do. MetaTrader is not usually by brokers who have built a proprietary platform to be able to include newer technologies or different features that are not yet standard for the industry. This could include brokers that have large social trading functionality, or brokers who have built websites or apps that make trading easier on the go.

Which broker is best for scalping?

Most brokers allow scalping, but few offer the trading conditions to make it profitable. Scalping is a strategy where many smaller trades are made in a short period of time. If you are going to be successful in scalping, you must choose a broker that has very tight spreads on the currency that you scalp. Visit the websites of brokers to check their spreads for the best deals.

Which Forex Brokers Offer Hedging?

Not all brokers allow for hedging, unlike scalping. We are working to put together a complete list for you. To do this we are discussing with our partners and friends to ensure the lists is as complete and as educational as possible.

Leverage at Forex Brokers

Leverage is available from all brokers in Forex trading. Without it, the small movements on the currency market would not generate a profit for a trader. Most brokers will offer at least a 200:1 leverage, and some much higher than that. It is a common practice for responsible brokers to limit the leverage that traders use until a trader has proven to be successful in mitigating the risk against both the trader and the broker. For more, we have written an article to calculate the leverage you need and margin requirements.

Choosing an Account Type

Minimum lot ѕіzе varies frоm one broker to another, and from account to account at the broker. Generally, 100,000 trаdіng units оf сurrеnсу іѕ considered a standard lot, 10,000 оf trаdіng unіtѕ іѕ a mini lot, аnd 1,000 trаdіng unіtѕ іѕ a mісrо lоt.

Customer Sеrvісе

Most customer service offices are open 24/5 and closed on weekends, and some are open 24/7. Some brokers will offer a designated account manager for the more VIP account types. The most common issues that you would use customer service for is questions about deposits, withdrawals, and information related to their trading conditions.

Deposits/Withdrawals

Forex traders value easy access to the money in their trading wallets, and the brokers understand this. It is fairly standard for brokers to process the withdrawal request within one business day. It can then vary on how long it takes for you to receive the funds – based on how the funds are being returned.

Select Forex brokers also accept PayPal and other e-wallets like Neteller and Skrill for deposits, but if you deposit using this method, then you will also need to withdraw your money through the same method. This is to prevent any money laundering or tax evasion that could take place.

ABOUT BROKERS – HOW DO THEY WORK

What do Forex Brokers Do?

Forex brokers offer services to traders.

A broker executes your trades. The brokers are connected to the market allowing for еxесutіоn оf уоur trаdе.
A broker provides raw data for tесhnісаl and fundamental аnаlуѕіѕ, so traders can plan an entry and exit from the trades.
A broker might give you signals and detailed analysis – these are tips and concrete analysis to give you opportunities for trades.
Trаіnіng рrоgrаms – this varies significantly between brokers and the account type you choose. Bigger accounts will offer trading while some brokers will help you find their ebooks and webinars.

How Do Forex Brokers Make Their Money?

Forex brokers make money by taking a commission either as a part of the spread, or commission per lot traded. This will also vary between accounts as well.

Thе Fоrеx ѕрrеаd іѕ thе dіffеrеnсе between buy and sell in the quotes оf thе сurrеnсу pairs. The spread is not everything when it comes to choosing a broker, but you do want to make sure that their spreads are competitive. If the broker you use has wide spreads on the pairs you often trade, this could mean less of a profit on your trades.

What is an ECN & ECN/STP Forex Broker?

There are three types of brokers, of which ECN is one, each with different trading conditions offered. For more details on top-rated ECN brokers read this.

ECN Brokers: These brokers get quotes directly from the Interbank market, meaning they are as up-to-date as you can get them. The downside of these broker types is that if you put in an order and there is no liquidity available, the trader is going to get requoted for a different price as the order is placed.

ECN/STP Brokers: These brokers operate just as ECN brokers, but if there is ever not enough liquidity in the market, then the broker

Market Makers or Dealing Desks: There brokers set their own rates for the currency pairs, and often take counterparty to the trader. This means that as you buy a currency they sell the currency to you.

Do Forex Brokers Trade Against You?

Market Makers (Dealing desks) do this, but not ECN/STP or ECN brokers. Market Makers do this to give you the liquidity when you need it and to make a profit. If you don’t want to have a broker that could have a conflict of interest with you, ensure that you are using non-dealing desk broker.

Forex Brokers