Comparison Of Brokers

[ForexTrader]

How would you suggest me to find a good forex broker?

I found this list with different forex brokers, what do you think should be the main criterion for that choice.

How did you decide which broker to trade with?

Thanks.

[ForexWolf]

Originally Posted by ForexTrader

How would you suggest me to find a good forex broker?

I found this list with different forex brokers, what do you think should be the main criterion for that choice.

How did you decide which broker to trade with?

Thanks.

Hello and welcome!

Finding a broker seems to always come up as a big question for many folks starting Forex. We all want the "lowest spreads" and the "best broker" and someone "who won't cheat me or run my stops". However from my experience with testing and using several different brokers over the years I can say a few things to hopefully point you in a direction. No one can say who is the "best broker" as the needs and desires of each trader may differ..and in reality if you are trading Forex and you trade it succesfully, you won't worry or be concerned at all whether you get a 3pip spread or a 4 pip spread on EUR/USD or other pairs. Certainly you will be on other pairs that may be larger in spread or more balanced overall, but the point being that if you learn to trade successfully--a spread is not a huge overwhelming concern if its a point or two off from others. What does matter is that your Broker is legitimate, has been around a long while and is established, preferrably is registered and is able to comply with pending new rules for Forex brokerages which is soon to be implemented.

First off, I do not know which country you are in, but if possible you should look at brokers listed with the CFTC (Commodities futures trading commision) / NFA (National Futures association). Both these folks regulate a lot of the US Forex brokers and encourage all brokers to join and work to prevent fraud and keep Forex trading legitimate, to keep them honest and these offical sites offer some great things to look for to avoid being scammed:
http://www.cftc.gov/customerprotecti...adv_forex.html

http://www.nfa.futures.org/compliance/forex.asp

For brokers to be members they have to meet certain accounting and reporting criteria as well as financial management criteria. This eliminates the scammers from legitimate brokers. Using the above you can check out your broker to determine if they have any fraud or questionable business practices filed against them by consumers, plus you can keep track of new regulations being put forth designed to keep those fly-by-nite scammers from scamming you. You can also sign up for an alert newsletter whenever a broker comes under question. If a broker you find is NOT listed with them---my advice is to find another. They may have a great spread, or features that are really cool for incentives, or a snazzy pro looking website--but this is YOUR money and you want it in the hands of a reputable and accountable trading organization..

After you have checked out things above, the best way to choose which broker works for you is to DEMO test that broker and their platform. READ their Terms of Service, read their agreements and how they deposit and account for your funds--are they safe or are they vague, how do they handle trades, carry's, stoplosses and honor orders placed, how do that handle individual accounts and deposits and payouts and so on. You need to ask a few basic questions key to your situation and plans. Some brokers only handle full size accounts for trading--others do "mini-accounts" for those who do not have $5k or more to drop into a trade account--some as low as a couple hundred dollars to open(although I do NOT suggest anyone trade with such a low account balance--and I will explain why later)--so that is also a consideration. Find out how they calculate and pay or deduct interest on trades, how they conduct stopslossed and if they are honored or not. if they have automatic account protection, live order entry or if its automated etc etc.

Also see from various top legitimate Forex analyst websites which brokers are often displayed and used for reference and popular. Its really about doing your own research... There is even a site called forexbastards dot com which while seeming to be a lot of ranting and a somewhat personally serving (the person running it is an overall nice guy but he also runs his own forex trade alert service and forex 'education" subscription which is not neccesarily known by the links he provides to some "legitimate" places unless you do a bit of research to see its the same person), lists a lot of consumer reviewed brokers in their lists. Its worth checking out for valuable feedback and taking it with a grain of salt in my view.

Sites such as www.forexcentral.net and www.fxstreet.com are some of the most popular sites for NEWS and analyst views & reviews. Additionally there is www.DailyFX.com which is associated with FXCM brokerage as well which is also a very good site to read reviews and reports on, and one I use. Also for charting and other forex stuff you can check out: http://freeforexcharts.com/ for lists of various Forex trade and data/news feeds--some of which are tied to brokerages.

Some of the brokers I have used, tested and like which I suggest to beginners are GFT, Forex.com, InterbankFX, OANDA.. Those are but a handful--and many other folks will gladly tell you who they use and why. As a moderator--I can't play bias on any one brokerage. Really you have to look around, demo test the platforms, read reviews from reliable sources, and see if the brokers is something YOU like. Regardless of how you pick who you like, the only thing I strongly urge is that you make sure your Broker is listed and registered member in good standing with CFTC and NFA--or if you are outside the USA then that they have some agency regulation (many countries are establishing such regulating bodies for the FX brokers)--because if there is a problem you have someplace to turn to for resolve or arbitration. If you think nothing can go wrong--ask the folks who USED to be part of one of the biggest Forex brokerages around until they up and closed shop, froze accounts without notice one day...if it was not for the NFA/CFTC, folks would not have had a course of action.

FXW

[ForexWolf]

Oh Yea, I was gonna explain WHY a mini-account with $250.00 or such a low account balance was not a good way to start trading.. Well to do so puts the BROKER with ALL the advantage and you with nearly NO advantage to enduring a trade or taking a loss. Here's why...

When you take a trade in Forex you use a portion of your account as margin to leverage a larger amount of money to trade. When you do this part of your account to secure the trade gets held and the rest of your account is used for fluctuations and swings to ensure the trade can stay open. If the trade loses--your account drops. Each broker has a minimum account balance you are required to have to allow for trades or to keep an account open--this is often above what you need to open a basic trade. When you fall below that amount, your account is closed out...and you can't trade again until you deposit more money. You are also unable to endure market swings which may be critical to allowing atrade to run its course and turn in your favor--the result could be an early stop out or margin call.

well when you trade, to trade "smart" you need to consider how much of your account your put at risk. If you have a $250.00 account and you are using 200:1 leverage, to initiate a trade you need to put up $50 for a basic mini lot size trade (to leverage a mini-lot size of $10k you need $50 real money). If you trade with 100:1 you need $100 of that 250.00 account to initiate the same trade..and if you trade 50:1 leverage you need even more etc etc etc.

So--when you take your $250 down to 200 or even 150 to make a trade--you are puttintg at risk a SIGNIFICANT amount of your trading cash. Most experienced and pro traders suggest no more than 2% of your account risked on any trade.. I even suggest from my experience that in reality that could be higher for bigger risk takers, with up to 4-5% risk per trade possible, but as a general rule of thumb--2% is standard for traders and what you will hear about in all money management commentary--and it IS the "smart" way to manage your account funds.

Well....2% of a 250.00 mini account is $5. When you risk $50 to initiate a trade, you are risking 20% of your account. If your trade should lose or be stopped out unable to endure a swing against you, then at a minimum you you have just lost 20% of that account...or MORE. If say you only lose that $50.00 from your $250 account, when you try to trade again you start with even LESS funds than you had..and suddenly that $50 from your now $200 account balance is risking 25% of your account... As your account drops--your risk percentage goes UP. This is a great disadvantage to a trader and a great advantage to a broker because it means you will lose that $250 very quick and easy...and you will have to deposit more funds to keep trading.

Now--say you open that same mini account with $2500... When you take a trade with that kind of account, same leverage and so on for $10k Lots, your risk ratio to open a trade with that same $50 is now about 2% and is VERY acceptable and manageable. If you are trading a system you developed that say has a 70% win rate...that means approximately that you will win 7 out of every 10 trades and lose 3. With a $250 account you cannot endure 3 losses to get to those 7 wins--3 losses will cripple you for trading with $250 in your account...but you CAN endure 3 losses EASILY and be able to get those 7 wins with a $2500 account. The larger your account that you start off with, the more loss and swings of the market you are able to endure until it turns your way...and if you have a loss it won't be devastating to take and you can recover from it faster.

so the summary of this--if you are interested in Forex, DEMO trade to get a feel for things and build a GOOD solid set of systems you can use and have developed CONSISTANCY at using and winning at--but don't open those $250 or $500 accounts with the minimal funding...you really want to look at having $2500 or better to start your account with. I know that is a lot to some folks and I agree--it is...but if it stacks the odds more balanced or even in your favor, then you would be horribly wrong NOT to wait and build up finds to take it. Some may think 'why not build up your $250 account higher wit htrading'--well yes you can do that...I have done it in one test...BUT it is VERY difficult to play and trade to ANY degree with those odds stacked against you and it is not something I am convinced every trader can do easily...It was very difficult even for me to do but it IS possible in a very slim chance...I often have 80-100 pip stops for big gain mid term duration plays..it is very difficult and the odds are against a newbie being able to do it.

so that is my reasoning...and I hope it helps many new traders avoid the pitfalls which I learned the hard way...

Remember: always Trade Safe and Trade SMART....
FXW

[ForexTrader]

Thanks very much for your help.

[Dinamo]

Haven't been here in a great while.

Consider EFX. It is an introducing broker for MBT and it is an ECN. They have great spreads and the commissions usually average at just another pip. There are a few others I would recommend, such as currenex or dukascopy, but they require $50,000 minimum.

Like it's been said before though, $2,500 should be regarded as the very least acceptable amount to start your trip into the forex markets.

[Anne09]

This question has been asked my hundreds and replied by thousands. Getting a good broker is always difficult to find as each broker can't satisfy all client need at the same time. Loads of research is required to get the finest of broker which fulfills your needs. When I started I have seen which broker is offering the best facility and with less spreads. I also seen for brokers who offers some bonus to the new client but couldn't find anything at that time. But now its the time to get benefited of the bonus facility introduced by some broker. Like for example FXopen is offering $25 bonus, FXCM is offering $50(not sure though) and avafx is offering $100 in minimum deposit of $200. Just use this code AVAQZ12 and get your bonus instantly without delay.

[Anne09]

FXCM
No Trading Restrictions.
Trade during breaking news.
Place entry orders anywhere.
No dealer intervention in trades.
Lower Spreads.

AVAFX
Open a trading account within minutes.
Start trading with minimum of $100.
Get bonus of $100 instantly by just depositing $200 into the account.
Just use this code AVAQZ12.
No commission no fees.
Lower spreads.

[finvik]

Thanx anne, i really didnt knew that AVAFX ha no commission or fess, thanx for sharing it here!

[Anne09]

there are many things which you might don't know of them do you know they received an award for signals at Dubai summit for the best and prompt signals they offer. they have their own automated trading software ava autotader I have not used though but I heard they are effective.

[fx-GIRL]

Very good comparison anne!!
And also very good explanation by forexwolf above, all pointed out

First I’m new at the forum!! Very happy to be here I’ve been trading fx for a while, I have been doing good but haven’t double my account yet

Well I trade with broker ac-markets keepin up with the comárissions…
They also have very low spreads and also won awards, they won as best trading broker and trading platform at the middle east banking awards. They own their trading software so hardly any technical problems, plus they have a customer service 24/7avialable . think that is crucial for a newbie…