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Your ultimate Forex brokers comparison list

Even before you can start trading, you will need to find a Forex broker you completely trust that you can work with. However, there are very many Forex brokers around, so you have to narrow down your choices, comparing their various features and deciding on one final choice. This post shall address some of the things you ought to look at when you want to compare Forex brokers so that you get the best possible option. There are a lot of things to look for in a Forex broker that make a good choice, and sometimes you may be in need of something different from another trader. Therefore, you can’t simply look for the most popular Forex broker and decide that will be your most preferred choice. It is going to be a very subjective choice, and that is why there are so many factors to consider.

In order to make an accurate and effective Forex brokers comparison, several factors come into play. This is because, as mentioned earlier, choosing a broker is a very subjective matter. For example, one trader may feel confident dealing with a particular broker because they offer trading accounts in their local currency. Meanwhile, another will be drawn to another broker because they find that the transaction costs are a bit lower. It is just like how people choose what type of shoes to wear – some prefer comfort over style, while others would rather be uncomfortable but look good. I believe that, after reading through this entire post, you will be able to determine which factors matter the most to you so that you can make a more favorable decision for yourself.

XM

XM Forex Broker Review

Minimum deposit

5$

Regulation

CySEC, FCA

Bonus

30$, 50%+20%

Maximum leverage

1:888

Year founded

2009

Trading platform

MT4, WebTrader

Markets.com

Markets.com Review

Minimum deposit

100$

Regulation

CySEC, FSB

Bonus

N/A

Maximum leverage

1:300

Year founded

2008

Trading platform

Custom

Plus500

Plus500 Review

Minimum deposit

100$

Regulation

FCA

Bonus

N/A

Maximum leverage

1:300

Year founded

2008

Trading platform

Custom

Forex.com

Forex.com Broker Review

Minimum deposit

250$

Regulation

FCA, NFA

Bonus

N/A

Maximum leverage

1:200

Year founded

1999

Trading platform

MT4

EasyMarkets

EasyMarkets Review

Minimum deposit

25$

Regulation

CySEC, ASiC

Bonus

N/A

Maximum leverage

1:200

Year founded

2003

Trading platform

MT4, WebTrader

Z.Com Trade

Z.Com Trade Review

Minimum deposit

5$

Regulation

FCA

Bonus

N/A

Maximum leverage

1:200

Year founded

2005

Trading platform

MT4

Factors to consider in every Forex broker comparison

Financial regulation

forex brokers comparison

The first thing I advise anyone who would like to participate in the Forex market is to ensure that the broker in question is licensed to offer the service. Just like any other field of business, Forex brokers to are supposed to be licensed and regulated by the relevant financial authorities. The first part is easy, and it only requires that the company be registered to operate. The second part, though, is the most important and this is what you need to focus most on. For example, all companies in the UK are required to be registered with the Companies House regardless of the type of business they conduct. However, just because a Forex broker is registered with the Companies House does not mean they are regulated by a financial regulator. In the UK, that responsibility falls to the Financial Conduct Authority (FCA).

When it comes to financial regulation, it is not enough that the company be licensed, but also licensed by a trustworthy financial regulator. The aforementioned FCA in the UK is one of the most trusted regulators, but there are several others who are just as trustworthy. These include:

  • The National Futures Association (NFA) in the US
  • The Australian Securities and Investments Commission (ASIC) in Australia
  • The Cyprus Securities and Exchange Commission (CySEC) in Cyprus

That final body, CySEC is actually the one financial regulator that oversees the highest number of Forex brokers worldwide. Inasmuch as they are a reputable regulator, they don’t match the standards set by the first three regulators. Therefore, with Forex brokers compared, those regulated by the FCA, ASIC or NFA are usually the most highly recommended. Nevertheless, you might feel more comfortable with dealing with a local financial regulator, which is actually a very good decision. Take a South African resident, for example, they would be more inclined to work with a broker licensed and regulated by the Financial Services Board (FSB) even if they aren’t licensed by the most reputable regulators. As you can see, this is indeed a very subjective decision, but the main point is to ensure that there is at least some form of regulation.

Speaking of regulation, it is not enough to be just told by a broker that they are licensed – you have to make the confirmation yourself for accurate comparison Forex brokers. Think of it, when did a con man ever admit that what they were saying wasn’t completely truthful? Of course, they don’t. The same happens with fraudulent Forex brokers who would like to fool potential clients. They do so by stating that they are regulated and even going further to post a fake license number on their website. To confirm whether the information is true, you will need to cross-check that license number against the regulator’s website’s database. All the best financial regulators offer this feature on their website so it’s easier to confirm the information. This is also why you should stick to reputable brokers because they have this feature.

If you want to see the opposite, try searching for the license number of a broker claiming to be licensed by the International Financial Services Commission (IFSC) of Belize. That website cannot give you a confirmation whether the broker is licensed or not, and fraudulent brokers will usually take advantage of this fact to bamboozle clients into thinking they are indeed licensed knowing full well there is no way to confirm this.

Number of tradable instruments

Number of tradable instruments

Apart from regulation, I find that the number of tradable features available to be the next most important factor to consider in a Forex broker. After all, that is the whole point of the exercise. As you are comparing Forex brokers, your highest priority should be on the number of currency pairs on offer. Most brokers will have an average of 30 or so Forex pairs, but there are others who will offer upwards of 50. As you may already know, it’s best to stick to the major currency pairs because they have lower spreads and high liquidity, meaning that the cost of trading is low and the potential profits are usually higher. Nevertheless, it never hurts to diversify your portfolio a bit so that you have other options. In fact, some exotic currency pairs may have huge potential profits to tap into.

Besides the Forex pairs, you should also find Forex brokers with more instruments like stocks, commodities, indices and even cryptocurrencies. Not only do these instruments have high volatility, especially cryptocurrencies, but they are a good way to diversify your portfolio and hedge against risk. What’s even more attractive is that most of these products are offered in the form of CFDs, meaning that leverage is applied. Let’s say you’re buying stocks as CFDs, your profits would be much higher with leverage applied that if you had done the same trade through a stock exchange.

Forex brokers camparison of the trading platforms

All of the trading will be done through a trading platform, so there is no getting around this. The most popular trading platforms are the ones you download and install on your PC or Mac. Often, these are enough for a regular trader, but you should find a broker with more than just these types o platforms. The best brokers will have web platforms so that you can continue trading even using a different computer and mobile trading apps for traders on the move. Some will even offer VPS services for traders relying on trading robots so that their trading is never interrupted by anything. During your comparison FX brokers, you should first know what you need, then make sure that the broker in question can fulfill those needs.

Trading costs

Once you have found the broker with proper regulation and trading platforms, compare them against others in terms of how much the trading will cost you. This has to do with factors such as spreads, commissions and costs of funding and withdrawing from your trading account. At first, these may seem like minor costs, but they add up through the course of your trading career and can put a dent on your profits if you’re not careful. For example, wide spreads can be too expensive to a scalper because they only make profits from small moves in market prices. There are also other costs like overnight and weekend swaps to consider.

Types of accounts

There are many types of accounts offered by brokers on various categories on the Forex broker comparison list. The first category deals with the method of order execution. This determines whether the account is an ECN or STP account. The former is the one where trades are transferred to the interbank market without the broker ever handling the money exchanged. In return, the broker earns a standard commission on each trade while you enjoy tight spreads and actual market quotes. With STP accounts, the broker creates the market and earns from the commission. As you know, this type of structure generates a conflict of interest between you and the broker, but they are the preferred account for short-term traders.

The other category will have to do with the amount of capital you have to deposit. The lowest capital will earn you a cent account, which then rises to micro, mini, standard to VIP/gold accounts. As you increase the amount of capital you’re willing to commit, there are several perks you get to enjoy. For example, Gold account holders will usually get an account manager who gives then personal tips on how the markets might move on any given trading day.

Why is an FX broker comparison so important?

The importance of a Forex broker cannot be overstated. Throughout your trading career, your Forex broker is going to be your connection to the markets. Furthermore, they shall be the ones handling your money, which is, of course, a very important role. The FX brokers comparison should be taken very seriously, therefore, if you want to stand a chance of succeeding in the markets. If you want some more motivation, just consider how many people have lost their entire investment simply because they chose the wrong broker. It’s not even about scams, though, because a broker can make or break your trading career through the quality of their services.

As I already stated, their importance is fundamental, and you need to take every necessary precaution.