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Guide: How to Choose a Forex Broker

With hundreds of Forex brokers to choose from, selecting the right one can be both challenging and time consuming. To ease the process, we’ve tested and reviewed dozens of the top Forex brokers and compiled our findings into thorough Forex brokers reviews. But don’t just take our word for it – each Forex broker review also includes feedback from real traders, so that you can make a comfortable, informed decision.

The basic criteria to use in choosing a broker are few and simple. Without doubt, your number one priority should be ensuring the safety of your funds. Firstly, this means making sure that the broker you choose will not steal your deposit. You can best take care of this by making sure that you only use a broker based in and regulated by a financial authority in a respected financial center. Secondly, you need to make sure that even if the broker operates honestly, but goes bankrupt for any reason, that you will be able to recover your deposit. One measure that can be taken here is to only deposit with brokers whose regulators offer deposit protection for clients (such as regulated brokers in the U.K. or Australia, for example). This means that even if your broker goes broke, the government will bail you out by paying back your funds up to a certain amount, although it might take some time. Beyond that, try to choose a broker with a healthy financial situation and a good reputation. Once you have taken these precautions, you can look at what your potential brokers offer in terms of range of available assets to trade, spreads and commissions, overnight financing charges, and speed and reliability of trade execution – and make your choice accordingly.

Use the below links to navigate through the guide:

Things to Consider When Choosing a Broker

Regulation and compliance are – beyond the shadow of a doubt – the most important things to consider when choosing a broker. An unregulated broker can essentially do as it pleases with its traders’ funds. Such a broker might be nothing more than an online scam, so it worth being extremely wary of any unregulated brokers.

Regulatory Compliance

The activity of a trustworthy broker should always be governed by an official regulator designed to protect and promote the integrity of brokerage operations. All types of abusive practices linked to the sale of futures and options should be out of the question, as traders should be protected against fraud as well as manipulation. A US broker must be registered with the US Commodity Futures Trading Commission (CFTC) as a merchant and retail Forex dealer. It also must be a member of the NFA (National Futures Association). These credentials are usually listed in the About Us section of the broker’s website. Equivalents of these trade associations and regulatory bodies are present in nearly every country in the world. Depending on where their broker is based, traders should always research and look for these credentials. In this respect, it’s also worth researching the year when the broker obtained its license as this might carry some significance as well, in regards to the overall reputation and operational history of the broker.

Safety of Funds

Regulated brokers must comply with a set of rules that are meant to safeguard investor assets. This is the primary reason why regulation is so important. Every regulated broker is subject to a “Net Capital Rule” which prescribes a minimum amount of capital to be kept in liquid form. This way investors are protected with a ‘safety net’ in the event that a broker is forced to close. In addition to the requirement of maintaining minimum capital requirements, regulated brokers in most jurisdictions are required to keep all client funds separated in segregated accounts so that client funds won’t accidentally (or purposely) be used for any reasons other than to execute the client’s trades. Some nations, such as the United Kingdom, even offer government-backed deposit insurance for its regulated brokers so that clients can recover part or all of their funds even if the broker manages to misappropriate them.

Select a Forex Broker by the Type of Trading Platform :

Broker Types

The type of broker used can have an impact on one’s overall trading performance and results.

Dealing Desk vs. ECN Brokers

Dealing Desk brokers work similarly to the dealing desks provided by various financial institutions and banks. A Forex broker who uses a dealing desk and is registered as a Retail Foreign Exchange Dealer and Futures Commission Merchant (or equivalent in another country) can offset trades. The No Dealing Desk system on the other hand offsets positions automatically and then transmits them to the interbank market. Brokers working through a Dealing Desk system do not work directly with market liquidity providers, therefore only one liquidity provider remains in the equation, and that gives birth to a fundamental conflict of interest.

An ECN broker on the other hand, offers its traders direct access to the other market participants through an Electronic Communications Network. Why is an ECN broker the superior of a Dealing Desk one spreads-wise? Simple: because it deals with price quotations from several trading entities, it can offer much better bid/ask spreads.

The business model of an ECN broker is an entirely fair one, as it eliminates a major conflict of interest: because it matches trades between various traders, it cannot become the sole market-maker, thus it cannot trade against its own clients. Another advantage of the ECN is that because of the lower spreads it offers, such brokers can charge a fixed commission on every transaction.However, you should not see ECN brokers as a panacea. Under certain conditions, their liquidity can dry up completely, creating much greater slippages than Dealing Desk brokers’ client might be suffering. Another sad reality is that many brokers describe themselves as of the ECN type, but have an element of dealing desk within their operation, so are not “true” ECNs.

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Fees & Commissions

This brings us to the third most important brokerage selection factor: costs

Brokerage fees – Price isn’t everything

Brokerage fees are fees that the broker charges for the services it offers, which are services focused on facilitating transactions between buyers and sellers. The amount of these fees depends on the broker type, and the type of service to which the trader signs up. For the purposes of retail traders, the situation is best summarized by saying the Dealing Desk Brokers charge spreads only, while ECN Brokers charge spreads as well as commissions.

Commissions & Spreads (Fixed or Non-Fixed)

The key difference between fees and commissions that all traders need to understand, is that fees represent a flat charge, while commissions vary depending on the delivered financial product and the size of the transaction.

Premium services offered by the broker?

Full service brokers offer all sorts of additional perks and premium features, some of which are indeed extremely useful. Such services do cost extra though. In this respect, what you should be looking for is a broker who includes as many premium services as possible, as cheaply as possible. In the premium service category, we have features like advice and research covering a wide range of traded assets, retirement advice, tax planning etc. You need to carefully weigh whether you need such services or not. If you’re only looking to execute trades, there’s no point in getting embroiled in any premium-service intricacies. Discount is probably the way to go then.

Does the broker credit or debit daily rollover?

Another factor to consider is daily rollover. The daily rollover is interest credited or debited to the entity holding a Forex position overnight, depending on the relative interest rates of the currencies involved in the trade. Positions which are kept open past 5PM EST are considered positions held overnight. In such cases the broker will consider which national currency the trader bought relative to the other national currency of the pair. If the interest-rate difference favors the bought currency, the trader will have rollover interest credited: in theory, at least. If it’s the other way around, the interest will be debited. The problem is that most brokers make sure their clients pay for holding most positions overnight, and there is nothing to stop them doing this beyond the true market cost.
Most brokers roll over open positions automatically. It is important to know that the rollover interest (whether it’s debited or credited) is calculated on the full amount involved in the trade and not on the margin alone. Another important thing regarding the rollover interest is that it represents a separate revenue stream from the capital gains and as such, it will be taxed separately too, as interest income.

Trading Terms

Time to shed some light on the expressions and terms you may have come across within this guide but that haven’t been fully explained until now.

Select a Forex Broker by Country/Region

Margin

Through a margin account, the investor essentially borrows from the broker, with the intention of controlling larger positions than he’d be able to control based solely on his own invested capital. There are special margin accounts that traders can use for this purpose. The margin percentage is set to 1-2% in the case of accounts which trade in 100,000 currency units. What this means is that in order to control a $100,000 position, a trader needs to deposit $1,000. Margin accounts come with their own risks, and special operating procedures meant to reduce risk for the trader as well as for the broker.

The difference between margin and leverage is simple. Let’s say a broker requires a deposit of $1,000 to make trades worth up to $100,000. The leverage is the factor by which the deposit is multiplied to reach the maximum trade value: in this case, 100, so the leverage is 100 to 1. The margin is simply the amount of deposit required as a percentage of the maximum trade value. Here, it is 1%. It is just the flip side of the earlier calculation.

Leverage = Maximum Trade Value / Deposit

Colloquially, “margin” is often used to refer to the cash deposited with a broker.

Initial Deposit

The initial deposit is the first deposit a trader makes with a broker. This deposit may be subject to special rewards, such as bonuses.

Bonuses & Promotions

Bonuses and promotions are marketing tools used by the broker to “sweeten” its offer, and thus to attract more business. You might want to consider whether a really top-quality broker would feel the need to offer such incentives.

Customer Service

Customer service is very important for new traders and experienced investors alike. Whenever one runs into any sort of trouble with his or her broker, it is the duty of the customer service agent to iron everything out. As such, the expertise, skills and availability of the customer service staff should be a factor within the broker selection balance.

Availability

Funds deposited into trader accounts through third party checks typically take some time to clear. Once they do, they become “available”. Availability hinges on the bank from where the check originates, and the availability schedule of the broker.

Trading Platforms

The trading platform is the gate between the retail trader and the markets. It is also the tool through which the trader performs his trading. A proper, simple, fast and user-friendly trading platform is critical in trading successfully.

Ease of Deposit & Withdrawal

Being able to make deposits and to withdraw money from your broker quickly and easily is highly important. This all depends on the type of withdrawal and deposit options your broker supports. The selection of these payment solutions needs to be as large and as diverse as possible. It is also a good idea to check the withdrawal time, as many traders complain that it can take up to a week to withdraw, when they wanted their funds available quicker.

Minimum Balances

The term “minimum balance” refers to the amount of money the trader needs to keep in his/her account to keep the account open and to receive the services he/she has signed up for. Obviously, the smaller this amount is, the better it is for the trader.

Instruments

In the context of Forex trading, an instrument is defined as a tradable asset, and any asset underlying a derivative. Commodities, stocks, indices and currency pairs are all trading instruments, because through them, value is held and/or transferred.

Инвестирование в TeleTrade или прощайте ваши деньги

Сотни отзывов клиентов TeleTrade в интернете доказывают, доверять деньги мошенникам из ТелеТрейд нельзя. Реальные истории инвесторовTeleTrade всегда заканчиваются одинаково: деньги инвестора похищены, привлечь к ответственности мошенников крайне затруднительно из-за несовершенства законодательства, рекламируемые ТелеТрейдом трейдеры скрываются от инвесторов и отказываются возмещать нанесенный ущерб. Чем заканчивается инвестирование в TeleTrade, что надо знать, чтобы не стать жертвой мошенников из ТелеТрейд, читайте далее.

Как показывает практика, нанесение материального ущерба инвесторам в TeleTrade это закономерный итог «сотрудничества» с этим лжеброкером. Есть все основания утверждать, что деньги инвесторовТелеТрейд банально похищаются мошенниками, а заявления о потере денежных средств якобы вследствие неудачной рыночной конъюктуры, это лишь попытка скрыть сам факт преступления. Этого же мнения придерживаются и сотрудники полиции, возбудившие в ряде регионов РФ уголовные дела по фактам мошенничества сотрудников ТелеТрейд. TeleTrade заинтересован в убытках инвесторов и сотрудники этой мошеннической организации прикладывают все усилия, чтобы инвестор не смог вернуть свои деньги. Ложь и обман это основа деятельности TeleTrade. С ложью и обманом клиенты ТелеТрейда сталкиваются с самого первого дня. Для привлечения потенциальных жертв, мошенники из TeleTrade повсеместно используют практику размещения в средствах массовой информации десятков вакансий. Фактически, это всего лишь уловка мошенников затянуть в офис потенциальных жертв для последующей «промывки мозгов». Отзывы соискателей, побывавших в ТелеТрейд на собеседовании, более чем красноречивы:

“Хочу предупредить всех жителей г. Владимира, которые хотят сотрудничать с компанией Телетрейд, сейчас у них новое название ГК Телетрейд — аналитический центр Бьорк, НИ В КОЕМ СЛУЧАЕ НЕ СОТРУДНИЧАЙТЕ С ЭТИМИ МОШЕННИКАМИ. Сначала вас заманят предложением работы и дадут пройти совершенно бесплатное обучение, в процессе которого вас будут психологически обрабатывать, при этом будут поить чаем и кофе неизвестного содержания. В результате уговорят внести деньги на депозит компании , обещая помощь в проведении валютных операций и быстром заработке. “

«ООО „Аналитик-сервис“ — разместило объявление о вакансии юриста в г. Тюмени. Через день после отправки своего резюме, я по телефону получил приглашение прийти по адресу г. Тюмень, ул. Республики 164, стр.2 офис 106. Оказалось, что это контора „Телетрейд“. Мой приход в их офис закончился довольно быстро. Четко и лаконично я услышал то, что хотел услышать, вернее то, что хочет услышать нормальный амбициозный человек. Да и все бы ладно, „лапша хорошо проварена и ласково накручена на уши“. Только зачем юристу знать сколько, сегодня например, заработал их трейдер — ну например 50000 т. долларов, равно как и не нужен в центре закутка на столе компьютер, с графиком торгов по валютам. А уж тем более не нужен — предложенный семинар, якобы о тонкостях бизнеса и вхождения в финансовую тему. С таким же успехом они могли поставить игровой автомат и предложить поиграть на деньги, только не все люди глупы и больны игроманией. Короче — такой же развод, который был уже написан кем-то на вашем благословенном сайте.»

«Обманным путем заманивают в Центр аналитики и финансовых технологий (он же ТелеТрейд), размещая различные вакансии для менеджеров,руководителей или заместителей руководителей приглашают на собеседования, тут же предлагают пройти 5 дневное обучение по 1 часу в день, следующий шаг тестирование, который я прошла, но после чего сказали ожидать звонка и меня пригласят для встречи с руководителем, но этого так и не произошло, но зато атакуют звонками и электронными письмами новости и разные предложения. В ДАННОЙ ОРГАНИЗАЦИИ НЕТ НЕ ОДНОЙ ВАКАНСИИ.ЭТО РЕКЛАМНЫЙ ХОД. НЕ ТРАТЬТЕ СВОЕ ВРЕМЯ.»

Совершенно заслуженно TeleTrade находится практически во всех черных списках работодателей. Всех пришедших на собеседование под благовидным предлогом отправляют на так называемое «обучение». Должность, на которую претендует соискатель, значения не имеет: программа одинакова для всех. В процессе «обучения» потенциальная жертва подвергается жесточайшей психологической обработке, в том числе и использованием НЛП-технологий. Люди, имеющие представление о работе финансовых рынков, побывавшие на курсах в TeleTrade, отмечают крайне низкий уровень профессиональной подготовки сотрудников ТелеТрейда, выступающих в роли преподавателей. Объясняется это просто: зачастую в роли преподавателей выступают такие же новички, не имеющие никакого опыта работа на рынке. В процессе обучения менеджеры ТелеТрейда выясняют материальное положение потенциальных жертв, создают иллюзию практически гарантированного дохода и всячески рекламируют так называемые инвестиционные программы TeleTrade: «Биржу трейдров» и «Мастер-инвест». После цикла лекций, потенциальным соискателям заявляют: вакансии, на которые они претендовали, заняты, но они могут продолжить сотрудничество с ТелеТрейд в качестве инвесторов или трейдеров. Если у потенциальной жертвы нет необходимой суммы, мошенники из TeleTrade готовы организовать денежный займ под залог недвижимости. Факт того, что инвестор гарантированно потеряет деньги, мошенников не останавливает. Мошенники из ТелеТрейд прилагают все усилия, чтобы выманить у потенциальной жертвы денежные средства. При этом менеджеры ТелеТрейда тщательно скрывают от инвесторовюридическую ничтожность подписываемых им договоров.

В соответствии со ст. 1013 Гражданского кодекса РФ, деньги не могут быть самостоятельным объектом доверительного управления. В соответствии со ст. 1062 ГК РФ требования граждан и юридических лиц, связанные с организацией игр и пари или с участием в них, не подлежат судебной защите, за исключением требований лиц, принявших участие в играх или пари под влиянием обмана, насилия, угрозы или злонамеренного соглашения их представителя с организатором игр или пари, а также требований, указанных в пункте 5статьи 1063 настоящего Кодекса. Судебной защите подлежат требования, связанные с участием в сделках, предусматривающих обязанность стороны или сторон сделки уплачивать денежные суммы в зависимости от изменения цен на товары, ценные бумаги, курса соответствующей валюты, величины процентных ставок, уровня инфляции или от значений, рассчитываемых на основании совокупности указанных показателей, либо от наступления иного обстоятельства, которое предусмотрено законом и относительно которого неизвестно, наступит оно или не наступит, если хотя бы одной из сторон сделки является юридическое лицо, получившее лицензию на осуществление банковских операций или лицензию на осуществление профессиональной деятельности на рынке ценных бумаг, либо хотя бы одной из сторон сделки, заключенной на бирже, является юридическое лицо, получившее лицензию, на основании которой возможно заключение сделок на бирже. Рынок FOREX является ВНЕБИРЖЕВЫМ. Статьей 168 ГК РФ установлено, что сделка, не соответствующая требованиям закона или иных правовых актов, ничтожна, если закон не устанавливает, что такая сделка оспорима, или не предусматривает иных последствий нарушения. Таким образом, все договора и соглашения с трейдером, предоставленные сотрудниками TeleTrade, ЮРИДИЧЕСКИ НИЧТОЖНЫ. Кроме того, сам TeleTrade вообще не фигурирует в этих документах. Доверив свои деньги мошенникам из TeleTrade, у инвестора нет никаких правовых оснований требовать исполнения своих обязательств от сторон договора. ИНВЕСТОР ПОЛНОСТЬЮ БЕСПРАВЕН. Этот факт мошенники из ТелеТрейда тщательно скрывают от своих потенциальных жертв.

В профессиональной среде трейдеров TeleTrade имеет крайне негативную репутацию махрового лохотрона. Ни один грамотный, успешный трейдер, имеющий положительный опыт работы на рынке, с ТелеТрейдом работать не будет. Все трейдеры из «Биржи трейдеров», которых TeleTrade рекламирует как грамотных управляющих, в большинстве случаев оказываются вчерашними новичками, которые гарантированно сольют депозит инвестора. Кроме того, торговые условия в TeleTrade таковы, что слив депозита будет максимально быстрым. Нередки случаи, когда финансовые «гуру» ТелеТрейда сливали депозиты в десятки тысяч долларов всего за один день. НИКТО И НИКОГДА НЕ ЗАРАБОТАЛ В TeleTrade ни копейки. Всем инвесторам, вложившим деньги в Биржу трейдеров, был нанесен материальный ущерб . Учитывая, что TeleTrade является обычной «кухней» и деньги инвесторов не выводятся на рынок, а остаются в компании, мошенники материально заинтересованы в нанесении ущерба своим клиентам.

Переводя деньги в TeleTrade, инвестор навсегда теряет контроль над ними. Добиться справедливости через суд шансов у инвестора нет. Будьте осторожны! Не доверяйте деньги мошенникам!

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Which broker is the best forex broker?

BRKV – Every trader wants to find the best forex brokers. If you think the broker doesn’t matter when trading, you’re a fool. A broker plays as crucial a role in forex trading just as your strategy or tactic.

For example, you see a good price and decide to sell or buy, but the server of the broker is so slow that when your order is executed, the price has changed (we all know how fast the tide turns in this market) and you lose a chance to make profit, or worse, lose your money.

That’s just one example to show the quality of the broker has a profound impact on our trades. Therefore, we all want to find the best forex brokers. After years of trading and testing many forex brokers, our experts from BRKV have come down to the top 5 forex brokers in 2020:

  • Exness Exness.com
  • XM XM.com
  • HotForex Hotforex.com
  • FXTM FXTM.com
  • FBS

Continue reading to learn how these brokers are the best forex brokers in 2020.

STANDARDS OF THE BEST FOREX BROKERS

I can see that many traders think choosing the right broker is easy. Just choose the one that has low cost, or the one that has licenses, or the one that has big bonuses. Well, they are wrong. The one with low spread may have high slippages. The one with big bonuses may have really slow servers. To choose the right forex broker, you must look at many aspects and factors. Sound like hard work, right? Fortunately, you’ve got BRKV here. After 5 years of trading with many different brokerages, I am confident to list down the 5 best forex brokers in my opinion. These are the standards that I use to evaluate them:

Trustworthy Trading costs Trading conditions Customer services
Regulations Spread Accounts Payment system
Historical activities Commission Quotes Local offices
Trading volume Slippages Trading platforms Availability
Rebate / Bonus Leverage

And based on the standards above, I think those 5 I mentioned above are the best forex brokers of 2020 . Now, let’s go over to see how they can meet all the requirements of the best fx brokers. Moreover, if five aren’t enough for you, check out this article about 10 best forex brokers in the world that I wrote earlier.

TRUSTWORTHY

Regulations of the best forex brokers

When talking about reliability, you mean security and safety. Can that broker keep your fund safe? Can it be trusted? What if it is a scam broker? How to know if a broker is reliable? The answer is regulation, my friends. Regulation is like a certificate that trusted and famous financial organizations in the world gives to brokers if the brokers can meet all the standards required. It represents standards, capabilities, and reputation of a forex trading broker. When a broker is regulated by those organizations, you can put your trust in them completely. All the 5 brokers I mentioned above have trusted regulations so there is no favorite one.

However, make sure that you know what kind of regulation your brokers have, because a regulation of an organization can only be applied to those in the same country. For example, a US regulation can’t provide any protection to traders from South Africa or Thailand. Regulation only means that that broker is reliable enough to work with. Therefore, a broker doesn’t have to have too many regulations. One trusted regulation is enough.

Trading volume of the best forex brokers

Another factor that can guarantee the credibility of a broker is their trading volume. If the trading volume of the broker is high, it means that there are many people trading with that broker. Look at the monthly trading volume of my 5 best forex brokers:

  1. Exness: $395 billion
  2. XM: $300 billion
  3. HotForex: $280 billion
  4. FXTM: $108 billion

One more thing is how popular that broker is. If the broker is famous, it means they are big and rich, which makes them more reliable. I have these results from Google Keyword Planner about the most popular forex brokers:

  • XM has around 40,000 search monthly. More details.
  • Exness has around 36,000 search monthly. More details.

Historical activities of the best forex brokers

Lastly, you should know things about your brokers in the past. For example, how they react to a certain event or crisis previously. Have they ever been accused with scamming? Or you can check their transparency. When it comes to transparency, no broker can beat Exness. Exness even upload all of their financial reports on their website Check here .

Learn more about Exness here Exness reviews.

TRADING COST

It’s not easy to make money from trading forex, which we can all agree on, so we need to find brokers who require little cost to trade on their platforms. The trading cost is the total expense we calculate from two main factors, spread and commission, and others.

Spreads of the best forex brokers

First, I will compare the spread of the 5 brokers I mentioned above. I can guarantee you that their spreads are among the best in the forex market. I will show you the spreads of the most popular currency pair, EURUSD. For more pairs, click the buttons next to the brokers.

So, you can see that Exness, HotForex, and XM are among the lowest spread brokers .

Commissions of the best forex brokers

Then, I’ll compare their commissions. All of them are commission-free for their regular accounts. For the ECN accounts, the commission rates are different. They have to charge commission for ECN accounts because the spreads then are nearly zero.

Exness commission $2.5 More details
HotForex commission $3 More details
FXTM commission $2 More details

Slippages of the best forex brokers

At this point, you may think that “Hey, I also see many other brokers who have even lower spreads and commissions.” You are right. There are tons of brokers who offer lower, why do I choose these five? Like I have said earlier, the total trading cost you have to pay depends on various factors, which slippages.

Slippage refers to the difference between the expected price of a trade and the price at which the trade is actually executed. Slippage often occurs during periods of higher volatility when market orders are used, and also when large orders are executed when there may not be enough interest at the desired price level to maintain the expected price of trade. Therefore, when you consider a broker, you should also pay attention to their slippage.

Exness guarantees that there is no slippage on their platforms. XM says it hardly happens. I have traded with all these three and here’s what I can say about it. All brokers have slippages. It’s a natural thing in forex trading. The important thing is how much the slippage is. Is it lower than other brokers (I think slippages that are lower than 100 pips is good enough)? How do brokers compensate their customers? I think Exness and XM are the brokers who can handle very well when it comes to slippages. Another thing I see that you really enjoy is bonus and rebate. Indeed they sound good in the beginning. But everything has two sides. If you’re not careful, bonus may be the bait of forex brokers to hook you. You can learn everything you need to know about bonus in my article Best forex bonuses.

TRADING CONDITIONS

Trading products of the best brokers

Sometimes, people don’t just trade currency pairs only. Sometimes the market can be very rocky, so traders must stay away from it for a while. That’s when they turn to other trading products or different currency pairs. Therefore, a good broker must be able to offer traders various and diverse trading products such as: cyrptocurrency, commodities, precious metals, or CFDs. So we’ll give you the brokers with the most trading assets:

  • Exness: currency pairs, metals, cryptocurrencies, energies, indices, and stocks.
  • XM: currency pairs, stock, indices, commodities, cryptocurrencies, stocks, metals and energies.
  • IG: currency pairs, commodities, bonds, crytocurrencies, digital100s, options, indices, interest rates.

Accounts of the best forex brokers

There are 3 levels we can use to rank trades, which are: beginners, normal traders, and professionals. So, a great broker is the one who can provide different types of account for all types of traders. The conditions of the accounts of the 5 brokers I chose are similar. They all have 3 classes of account for each targeted trader type: mini/micro accounts, regular accounts, and ECN accounts for each type respectively. You can check each broker’s account here:

Leverages of the best forex brokers

Another factor you should know is the account’s leverage. Leverage is the tool that most traders in the world would love. Often, British, American, and Japanese licensed brokers offer low leverage because they have to comply with these licenses of these countries. So as I mentioned above, brokers with many licenses are often less competitive. Among prestigious international brokers, the following forex brokers have the best leverage:

  • Exness: 1:Unlimited for accounts that have under $1000 and have traded over 5 lots. For accounts that have more than $1000, the leverage is 1:2000. Learn morehere.
  • Hotforex: 1:1000. Learn more here.
  • XM: 1:888. Learn more here.
  • FXTM: 1:1000. Learn more here.

The most popular thing we trade in the forex market is currency pairs. Currencies are quoted in pairs. For example, the most common currency pair, EURUSD, is the Euro versus US dollar pair. From the quote of this pair, we are able to identify the value of the Euro compared to the value of the USD. For example, the quote is EURUSD = 1.1346, which means you have to pay an amount of 1.1346 USD to buy 1 Euro. Each broker gets their quotes from different liquidity providers so you can understand that their quotes will be different as well. As traders, we should choose the brokers who can offer the best quotes. There are other factors such as requote, which you can find in this article Best no-requote brokers .

Platforms of the best forex brokers

But one thing I would like to stress on is the trading platform of the broker. Currently, MT4 and MT5 are the two most popular trading platforms in the forex market. Every broker has those two trading platforms. However, their platforms are different in terms of execution speed and execution quality. These factors can affect your trading greatly.

For example, when you see good news and predict a good price, you log in to put in that price. However, there are many others who predict and log in as well, and the server is too weak so you order can’t be completed. Eventually, you miss a huge chance to make money. That’s why you need to do some tests first before trading with a broker. You can deposit a small amount of money into those brokers (like 10 or 20 dollars) and trade with them for at least a month. Also, try trading when there’s big news to see how their servers work and how much their slippages are. After testing by myself, I can give you 2 brokers that have very low slippage rates:

CUSTOMER SERVICE

Support teams of the best forex brokers

Forex trading is difficult. The best fx brokers must be able to support their customers at all time and in many different languages. Most brokers assist their clients via live chat or email. However, I think the most effective way is a face-to-face conversation. That means it is better if the broker has local offices in your country or region.

Exness seems to have the best support team. This broker has very strong sales, support, and marketing team who is always available to the local markets. Besides, their IB network is also very strong. Therefore, if you have any problems, just chat with them on the website, and you will get the response instantly. Moreover, Exness supports clients 24/7.

You can find the contacts of my best forex brokers in 2020 here:

The payment methods of the best forex brokers

Last but not least, the payment system. You may think it is insignificant at first, but only when you really trade with a broker can you see how important it is. Most of the brokers are foreign, so you need to transfer and withdraw money overseas. That’s when the bank charge you transaction fees. Making money from forex is hard enough and now the banks take some from it? I don’t think so.

For example, when you transfer money via VISA card, it costs you 3 to 5% of the amount you transfer. The best fx companies must have various payment methods that are not only free but also convenient. Moreover, it needs to be fast. I used to have to wait days and weeks to withdraw my profit from a broker, which is really frustrating.

In this field, Exness has no competitor. How can Exness be so fast? Because Exness has an automatic withdrawal system that has zero human intervention. The machines of course make it quickest possible. Moreover, Exness also offers many local payment systems that are very convenient. You can deposit just $1 from your phone and it will take only 30 seconds and there is no fee at all. Yet the most advanced that only Exness can offer is that you can deposit/withdraw even on weekends. This is why most of traders like Exness. Here is my ranking:

  1. Learn more about Exness payment system
  2. Learn more about XM payment system
  3. Learn more about HotForex payment system
  4. Learn more aboutFXTM payment system

CONCLUSION

In the end, I think this is the most accurate rankings of my 5 best forex brokers:

Exness Open account now
HotForex Open account now
XM Open account now
FXTM Open account now
FBS

These five best forex brokers here are just the most suitable brokers for the major of traders. If you are still skeptical, you can open an account at each of them (they require very low minimum deposit). You can trade with them for 1 or 2 months to see if they really suit your trading style. I believe that you won’t be disappointed.

Why do Forex brokers not accept US clients?

It is a common known fact that the Forex market trading goes on 24 hours a day, 5 days a week. This happens due to the fact that there are multiple centers all over the world where the currencies are traded. Yet, even though the New York session tends to have the most significant impact on currency rate fluctuations, the amount of US based retail traders tends to be quite small.

If you are from the US you can be quite puzzled by the amount of brokers that are offering the services throughout the world, but are still not present in the States. Even though the US is the major market for various goods and services, for some reason FX trading for individual investors is not so common.

US residents can trade Forex

Before we move on any further, it is vital to state that Forex trading in the US is not prohibited. A trader from the US can trade FX online as easily as a person living in Europe or Australia. However, the main difference lays in the variety of brokers a trader can choose from.

There are a few reasons why the amount of FX brokers is very low, let’s examine each of them below.

Licenses and Regulations

When it comes to the brokers that operate in Europe, the regulatory environment is rather simple. Once a broker has obtained a license from one of the European regulators, it can easily accept traders from all EU countries. In other words, a UK Financial Conduct Authority regulated broker can accept traders from Germany, the Netherlands, Bulgaria and other EU member states.

However, when it comes to the US, European licenses simply do not work. A broker that wants to have traders onboard from the US has to be regulated by the NFA, National Futures Association. At this point you may ask, there are brokers that have multiple licenses, like CySEC, FCA, ASIC and more, why would they not get another one to provide services in the US? The reason for this is quite simple – capital requirements. While a broker has to have around $100,000 – $500,000 of locked capital to obtain one of the European licenses, NFA requires quite an enormous amount of capital to be able to operate in the US – 20 million dollars.

This amount of money only corresponds to a deposit that a broker has to make and does not include any legal fees associated with obtaining the licenses, employment of lawyers to be placed on the register and executives. In other words, the US market is an expensive market to operate on.

Even though some brokers make profit enough to afford it, 20 million dollars is quite a large sum to allocate just for a license. On average, the world’s 15th largest broker would hardly earn 10 million USD in profit annually, hence allocating a profit of 2 years for the privilege to work in one country is an extremely serious investment.

The situation with capital requirements was quite different back in 2008 and at that time there were quite a few brokers that accepted US clients. However, today the amount of US friendly brokers is just less than five.

Profitability

Now you may wonder, if there are only a few brokers in the US, why are more brokers not trying to penetrate the market? There are over 300 million people living in the US and it is quite hard to believe that there are no more brokers that could actually afford the NFA licensing. Well, the truth is that, although more brokers could deposit 20 million to operate, not every broker will find it profitable.

As you know, FX brokers earn from the volume traded, hence the higher the trader’s volume is, the more profit a broker makes. However, unlike European countries where a trader has access to the leverage of 500:1, in the US it is only possible to supply 50:1 leverage on majors and 20:1 leverage on minors. This means that a broker can expect to receive some 10 times smaller profit in the US than in Europe, provided that it has the same amount of traders with the same amount of deposits in the two regions.

Furthermore, yet needless to say, wages in the US tend to be quite high, so the whole process of financing the US-based operations is not cheap at all.

Regulator’s attitude

Even though it is already quite hard for some brokers to start operating legally in the US and then to become profitable, historically US authorities have also been seen as a hindrance.

Quite a few brokers have been heavily fined by the NFA for malpractice. While the impact of the reasons behind the fines could be quite insignificant, the fines tend to be heavy: ranging from $200,000 to $2 million.

In other words, a broker may spend a year working hard, and by the end of the year its profits (or even more) can be simply taken by the regulator as a result of certain misconduct.

Indirect competition

US traders have also been much more inclined to stock trading, this is why they often choose to acquire shares over currencies. In most cases, trading stocks is actually more expensive for traders (or more profitable for brokers) than Forex. This is why US based brokers not only have to compete against each other, but also in order to take a slice of the stock brokers’ pie by increasing the awareness about online currency trading.

Conclusion

The limited amount of FX brokers in the US is certainly caused by the heavily regulated environment that requires brokers to deposit a substantial amount of funds and, at the same time, decreases brokers’ profitability by limiting leverage.

This also results in a few unregulated brokers offering their services in the US as they can better meet the needs of the traders, while their legal and operational costs are minimal. However, unregulated brokers that accept US traders should never be your choice.

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