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How to Choose a Forex Broker in 5 Steps

There are two most common ways of choosing a Forex broker:

1) Simplified or “lazy way” — which is to read broker reviews, and based on stars and feedback make a choice.
There will be no guarantee, however, that a 5 star rated broker will be the best choice for your trading needs, or that the reviews you’ve read were actually genuine (unfortunately, that’s the reality of online reviews submission).

2) Professional way — which is to do your own research while making reading reviews a part of that research.
We’re going to describe the steps of making a professional choice:

1
Min. Deposit
$200
Exclusive promotion
Our score
10
Leverage
30:1
New accounts
Spreads
1
PIPs
Regulations
CySEC, FCA
Forex Pairs
No Fee
Start Trading
Pros:
Join the Social Trading revolution. Connect with other traders, discuss trading strategies, and use our patented CopyTrader
eToro is the world’s leading social trading platform, offering a wide array of tools to invest in the capital markets
Largest number of currency pairs to trade
Payment Methods
Bank Transfer, Wire Transfer
Full regulations list:
CySEC, FCA
Cryptoassets are highly volatile unregulated investment products. No EU investor protection. eToro USA LLC does not offer CFDs and makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared by our partner utilizing publicly available non-entity specific information about eToro. Your capital is at risk.
2
Min. Deposit
$10
Exclusive promotion
Our score
9.3
Leverage
500:1
New accounts
Spreads
0.8
PIPs
Regulations
Forex Pairs
55+
No Fee
Start Trading
Pros:
55+ currency pairs available
Trade on a trusted platform
24/7 support via live chats, email or phone call
Payment Methods
Bitcoin, Credit Card, Debit Card, Visa
Full regulations list:
LonghornFX offers high-leverage trading on a wide variety of assets. Trading with leverage carries a degree of risk which may result in losing more than your investments. Clients should practise risk management to protect themselves from losing more than they can afford when trading with leverage.
3
Min. Deposit
$200
Exclusive promotion
Our score
8.7
Leverage
500:1
New accounts
Spreads
0.5
PIPs
Regulations
FMA New Zealand, FSPR
Forex Pairs
27+
No Fee
Start Trading
Pros:
BlackBull Markets’ unique feature lies in its stated goal of delivering an “institutional” trading experience to retail clients
No-Dealing Desk Broker (NDD), with Straight Through Processing (STP) all done on a true ECN
State of the art Equinix servers, based in New York (NY4), London (LD5) and Tokyo (TY3)
Payment Methods
Bank Transfer, FasaPay, Mastercard, UnionPay, Visa, neteller, skrill
Full regulations list:
FMA New Zealand, FSPR
4
Min. Deposit
$10
Exclusive promotion
Our score
8.5
Leverage
500:1
New accounts
Spreads
0.7
PIPs
Regulations
Forex Pairs
55+
No Fee
Start Trading
Pros:
Can fund with BTC
64 global companies including Netflix and Amazon
Free deposits and withdrawals
Payment Methods
Bitcoin, Credit Card, Debit Card, Wire Transfer
Full regulations list:
EagleFX offers leveraged trading on a range of assets within its platform. CFD and Spot Forex trading do carry a degree of risk which may result in you losing more than your initial investment. Please ensure you fully understand the risks involved with leveraged trading and ensure this is not detrimental to your personal or institution's financial well being.

 

Choosing a broker: Step 1 — Know what you want from trading

Start by creating your very own list of broker features needed.
Choosing your first (or next) Forex broker can be much easier when you sit down and make a wish list of services and features desired for trading.

Questions to add to your list:

– what currency pairs are you going to trade?
– what spreads would suit you (fixed, variable, how many pips)?
– do you accept paying a commission for trading Forex?
– what would be your minimum investment (account size)?
– what leverage do you need?
– what tools, indicators do you need for trading?
– do you need a specific trading platform (like MT4)?
– do you want to scalp?
– do you want to hedge?
– do you need a trailing stop?
– do you need a “one-click-trading” execution feature?
– do you wish to have a mobile phone trading feature and/or trading alerts?
– do you care whether it is going to be an ECN/ STP or a Dealing Desk broker?
– do you care about the reputation of a Forex broker? (You must actually care, for the safety of your investment).
– which way (wire transfer, Paypal, credit card etc.) can you transfer and receive funds? There could be restrictions depending on the country you live in.
– how much would it cost you in fees to pay for funding, transferring, withdrawing your money?

Sort those questions by the level of importance to You, add your own and begin the Search.

Choosing a broker: Step 2 — Do the search for matching brokers

Scan the network, use search engines and visit every broker website. That’s what traders did in the past!
Today, you can or try our Advanced Forex broker Search tool >>>
Choose Forex broker at www.100forexbrokers.com

Choosing a broker: Step 3 — Pay a visit to the broker’s website

After narrowing down your choice to a few Forex brokers, it is time to make further research by visiting brokers’ websites and reading about their Forex trading rules and policies, understanding the terms and conditions; getting a feel of the transparency of the business they do: availability of addresses and phones, customer support services, presence of the information of regulatory institutions they are supervised by.

If a broker doesn’t have any physical address listed on the website on the Contact page (or anywhere else, where it’ll be visible to visitors) it should sound an alarm in your head. Phones, chats, skypes, emails – all that doesn’t count if there is no address!

Secondly, the overall appearance of the website can tell about its owners. It doesn’t have to be all modern and interactive, written on Flash etc, but it should have a professional look and all pages and links must be functional.
Something like “Coming soon” on an empty page is not acceptable! To a new visitor, it always looks like this is a temporary message, but from our experience we already know – it is going to be “Coming soon” for months and years(!). A Forex broker who has opened a business and is accepting money from clients cannot allow a website to function partially!

Next important factor: your best choice would always be to open an account with a Regulated broker — a broker which is registered with appropriate authorities and remains under their supervision and regulation.

– United States: NFA, CFTC
– Canada: BCSC, CIPF, OSC
– United Kingdom: FSA UK
– Switzerland: SFDF, ARIF, FINMA
(Since 2009 all Swiss Forex brokers require to have a banking license)
– Sweden: Swedish FSA
– Denmark: Danish FSA
– Spain: CNMV
– Japan: FFAJ, FSA Japan
– Hong Kong: SFC
– Australia: ASIC
– Dubai: DMCC, DGCX, DFSA, ESCA
This is not a complete list, for other countries, there will be other Forex regulatory bodies to supervise Foreign exchange businesses.

Choosing a broker: Step 4 — Read reviews about selected brokers

We have our own section of Forex brokers reviews, but we encourage you to search for additional reviews online in order to make a decision: type in your Search browser: “[Broker name] reviews” and follow the links to read more reviews.

As much as reading reviews about Forex brokers can be helpful, it also can be confusing and overwhelming. Often times we hear from traders that after reading reviews they’ve seem to have hit the wall and no longer sure what broker to choose, because there is so much bad and good mixed up in reviews about every single broker, it is almost impossible to filter out the truth and make a choice. What to do?

We suggest sticking to the simple rules:

a) if a broker has been in the industry for more than a decade – it tells you that the company knows a lot about doing Forex business and caring about clients, otherwise it won’t be here today.

b) if a broker is regulated by a major regulatory body in its country – it tells you that a broker is serious about its business and making necessary efforts to align with rules and requirements imposed by the supervising bodies.

c) if a broker offers more that one trading product, e.g. besides Forex also has Futures, Stocks, Options, Commodities, CFDs etc – it tells you that a broker runs a larger business, carries more responsibilities and has more clients trading with them.

d) while reading reviews, make sure you see no reviews about cancelled profits or denied withdrawals. This is a red flag. If one trader can be wrong (that’s possible), seeing several reviews of this kind would be of great concern.

Filtering good and bad reviews

Be selective about reviews you read, always analyze who was the person who wrote a review: was it a professional trader, or a novice.
By the actual message of the review, it is often possible to see not only the level of education a trader has but also how well he knows the subject he writes about. This way you’ll filter lots of bad reviews where newbies accuse brokers of troubles they fall in because of their own incompetency.

Apply a filter to 5-star reviews as well. It is not rare to see reviews submitted by brokers themselves in order to boost their own ranking.
These reviews have a special “flavour” too and despite many efforts to hide the real face of the reviewer, it is not difficult to spot a promotional message hidden behind the review, other times it is 100% clear it was a promotion. Your job is always to have a cool head and judge everything objectively.

Choosing a broker: Step 5 — Final tips for the right attitude

Finally, your approach to choosing a Forex broker should be somewhere similar to the process of choosing the right bank to trust your money to reputation, transparency, the convenience of carrying operations with money, good customer support.

Client Agreement? What’s this?
As practice shows, many Forex brokers may (forget?) to update their websites according to newly changed trading conditions, e.g. show 1 pip spread while in reality it is already 2 pips, allows scalping, while in reality – don’t. If you don’t read the Client Agreement, but instead simply put a check box “I agree” in front of Terms and Conditions while applying for an account, you’re doing yourself no favour.

Know Forex and know your risks

A nice educational resource has been put together by NFA. It offers many examples that will help you understand Forex and online trading and fill any remaining gaps about money management, account monitoring and trading risks involved.

Let your choice of a good Forex broker be easy and rewarding!

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