Updated: Jan 15, 2021
This is by far one of the most frequently asked questions for new Forex traders. We have tried a number of brokers and its safe to say there is no elite broker. There is however the right broker for your needs.
The foreign exchange market is the largest market in the world, with over $4 trillion of daily volume. The size and nature of this market means that there is a huge decision to be made by Forex beginners or any individual looking to access this market. You need to decide which online Forex broker you will choose to help you in this Currency trading journey you want to embark on.
Choosing the best Forex broker for your day trading journey is much more difficult as there are a vast number of Forex brokers worldwide with little to no restrictions on access to every country in the world. This also creates a problem with Forex scammers, which are hard to pick up as a Forex beginner.
This article is intended to help you select the best online Forex broker for you to fulfill your Forex trading career.
We've broken down the factors you need to consider when choosing an online Forex broker. It would greatly minimize the time you spend researching brokers.
Please note that these are some of the key points that we have identified among many, it is advisable to expand on the notes to come to a specific decision. Take a moment to explore the reviews of our recommended brokers on reputable broker platforms such as Forexpeacearmy or myfxbook.
When picking a Forex broker, the top 4 factors you must understand are as follows:
Let's dive quickly into them.
First & foremost the safety of your deposit is top priority.
Working with a trusted Forex broker is crucial for any future you want in the Forex trading industry. In this part, you need to confirm whether the broker is legitimate, we rely on third party information for this part, you can't just acknowledge and believe what any broker tells you.
You need to make sure that the broker you want to work with is regulated. You must ensure that the broker is a member of a good regulatory body such as the FCA, the SFBC or the AMF. These are not the only bodies out there, you may find that your country of residence has a financial regulatory body to which brokers will adhere.
The best multinational online Forex Brokers are typically governed by several bodies in different countries and provide access to a larger client base, which often reinforces their legitimacy.
Second, you want to ensure that the transaction costs are as low as possible. There are no zero trading costs, if so, how do all of these brokers create state-of-the-art technology to help our currency trading dreams? If you find a broker offering zero trading costs, please read the terms and conditions of your account a few times over.
In the search for low transaction costs, you must ensure that you do not compromise on safety. Whether that means you 're paying more for the protection of your money, that's the best thing for you.
Usually when it comes to transaction costs, you will find brokers that charge commissions on trades; spreads or a combination of both. They will usually charge depending on the account type you choose.
The challenging part of comparing broker costs is the fact that the foreign exchange market operates from Monday (Sydney Timezone) to Friday (New York timezone), which indicates that currency volatility varies across time zones.It then tends to influence the basic laws of supply and demand. This affects spreads which will make it harder to compare.
The simple rule of thumb is to consider average costs , for example, once you start seeing brokers charging you 25pips spread, certain trading strategies won't work. A good tip would be to use 3-5 brokers, which mostly helps to mitigate the risk on top of reducing costs.
For example, let's say you have $6 000 as start-up capital, you would then pick 3 different brokers to deposit $2 000 on each account. How this becomes practical is when you want to trade in various time zones you would use a platform such as fxbook to check how much the spreads are, then use the broker with the lowest costs.
To better get a clear of view of transaction costs among brokers, you should read our next article titled: Types of Brokers.
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Third, you want to use good trading platforms, this will determine how well you analyse your charts, how quick & easy it is for you to place and how much information is provided to you.
A stable platform that allows you to trade efficiently gives you plenty of time to focus on other important factors, such as education, instead of spending the first few days or weeks to get the broker's platform underway.
Our online Forex trading course (How to make money selling Money) is the best place to get started.
Another addition to trading platforms is mobile access, some platforms have added the benefit of being able to trade on your mobile device, which means that you rarely need to trade on your laptop or PC.
The last tip is Customer Service, an element that is ignored by many new Forex traders. No trader wants to be stuck with deposit or withdrawal problems with poor customer service, that's just a catastrophe.
Luckily, some of the best Online Forex brokers have a reliable client service team that is always able to assist you. They often have a live chat on their dashboard with agents who are always able to help if you have any problems to work out.
We have done much of the groundwork for you and will be introducing the top 10 Forex brokers that we recommend in 2020. Our ranking is based on an in-depth study of feedback, studies and experience.
All of the brokers we have listed are regulated in 1 or more upstanding bodies. Start practicing how to trade with great tips & signals our free Telegram channel here
Other than the factors listed above, we looked at the following factors before listing our brokers.
Date established: Not only does this demonstrate a strong track record, but it also gives us an insight on the broker 's dedication to their company. Don't get too excited yet, as experience often fails, take a look at the well-known 100 + year old Lehman Brothers bank failure, and several other financial giants with a long track record that failed. This is one reason why we always recommend 3 or more brokers. When you sign up for our online course "How to make money selling Money" we discuss risk management measures in detail..
Type of broker: There are various types of brokers in the market, we go into detail on our next article, subscribe to get notified when we publish it.
Deposits & Withdrawals: We took a look at the efficiency in which deposits & withdrawals are made.
Execution & slippage: Where your orders are filled will make a difference between a good trade and a dismal one. In depth teaching on this element on our online course.
Number of instruments offered: We looked at various assets offered and where opportunity exists to take advantage.
Our top Forex Brokers in 2020 in no particular order:
BLACKBULL MARKETS: Register for an account here
AVATRADE: Register for an account here
XM: Register for an account here
ICE MARKETS: Register for an account here
In conclusion, there is no perfect broker. You will always find that some brokers lack in transactions but have incredible client support, or you will find a broker with great customer service, good costs but not regulated. This brings us to a stalemate, so the way forward is to find a balanced broker. They will essentially archive a 70-90% good rating across some review sites.
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