How to find a good Forex Broker

There are basically 2 ways to find the best Forex broker or CFD broker for your needs. The simple and the somewhat more complex way. We describe to you in the following, how you come with these methods to the broker that is best suited for you. Guaranteed!

The fast way

Here you briefly read the reviews and experiences of other traders in our Forex Broker Comparison and choose your broker based on the read experiences and reviews. Basically this is not a bad option and should protect you in any case from opening your account with a really bad broker. However, in some cases even a 5 star rating is no guarantee that the Forex broker is exactly the right broker for your individual needs. This depends, as so often in life, on your individual needs and strategy in Forex trading.

The elaborate way

Here one makes in addition to the read evaluations still own investigations to the respective online brokers and makes a CFD broker comparison. The read evaluations of other traders are then used in addition to the decision to choose the best Forex broker.

Find the best Forex and CFD broker: Step 1

Know what you expect from trading

Start your search for the best Forex broker by asking yourself what you need from a broker to trade successfully and make a list of all requirements.

Choosing a broker can be much easier if you are aware of what you necessarily expect from a forex broker and what you can possibly do without.

Questions you should ask yourself include

  • Which currency pairs do I want to trade?
  • What is the maximum spread that these may have so that I can trade profitably with my trading strategy?
  • Am I willing to pay trading fees when trading Forex?
  • What is the minimum deposit with the broker?
  • What leverage do I want / need for trading?
  • Which tools/indicators do I need for trading?
  • Do I want / need a special trading platform for trading? For example the Metatrader 4(MT4)/Metatrader 5(MT5)?
  • Do I want to do scalping? Not all brokers allow their customers the extremely short-term trading (scalping). An overview of brokers who allow scalping can be found under scalping brokers.
  • Do I want to be able to hedge my positions?
  • Do I want or need a trailing stop?
  • Do I want/need to be able to trade by One-Click-Or execution?
  • Do I need mobile trading or a web-based trading platform to log into my trading account mobile?
  • Do I want to trade through an ECN/STP broker or market maker broker?
  • What is the reputation of the preferred Forex broker ?
  • How would I like to make my deposits and withdrawals (bank transfer, credit card, PayPal etc.)? Are there any country specific restrictions ?
  • Does the broker charge fees for deposits and withdrawals?

Find the best Forex and CFD broker: Step 2

Search for brokers that meet your criteria

Now you search the Internet for Forex brokers who meet the criteria you set.

Visit the websites of the respective Forex or CFD brokers and find out about their range of services.

Find the best Forex and CFD broker: Step 3

Find out more about their conditions on the website of the brokers

Now there should only be a few brokers left who meet the criteria they have set. Now is the time to visit the brokers’ websites or contact their support to find out about the conditions, forex trading rules, company policy, regulation by an authority and the General Terms and Conditions (GTC). Try to get a feeling for how transparent the broker is towards his customers. An important point is the availability of a branch or office address. If a broker does not provide a physical office address on his website, all alarm bells should ring. Telephone, Skype, chat, e-mail – all these do not count if the broker does not provide a physical address on his website.

Do not be blinded by the professionalism of a website. Even dubious brokers have well-designed websites. Messages like “soon reachable” or broken links should make you suspicious.

Regulation

Another important factor is regulation

We strongly advise you not to open an account with an unregulated broker.

The broker should be monitored and regulated by one of these authorities:

  • Germany: BaFin
  • Switzerland: SFDF, ARIF, FINMA (since 2009 all Swiss Forex brokers must have a banking license)
  • England: FCA
  • United States: NFA, CFTC
  • Canada: BCSC, CIPF, OSC
  • Sweden: Swedish FSA
  • Denmark: Danish FSA
  • Spain: CNMV
  • Japan: FFAJ, FSA Japan
  • Hong Kong: SFC
  • Australia: ASIC
  • Dubai: DMCC, DGCX, DFSA, ESCA

Find the best Forex and CFD broker: Step 4

Inform yourself about experiences and evaluations of other traders about the respective broker

It is imperative that you read the experiences and evaluations of Forex and CFD brokers in our Forex broker comparison. However, we also advise you, if available, to use other sources of information to obtain experience reports with the respective broker.

If you want to trade via an ECN broker, please read the experiences and evaluations of ECN/STP brokers in our ECN/STP Broker Comparison.

Distinguishing between broker experiences and valuations

As helpful as experiences and evaluations on Forex and CFD brokers can be, they can be confusing in some cases.

It is quite possible that there are several good and bad ratings for one broker. This is possible because every trader has different demands on his broker. What is ok for one, can be insufficient for the other. In this case, we advise you to read the evaluations carefully and ask yourself whether the negative evaluated points would be disadvantageous for your trading or whether you can neglect these points in your trading strategy.

Broker to the Forex & CFD Broker

Some of the questions that you can still ask yourself to see how serious or dubious the broker is likely to be are the following:

  • How long has the Broker been on the market?
  • If the broker has been in the market for 10 years or more, this tells you that the broker has experience in Forex trading and cares about his clients. Otherwise, he would most likely not be there today.
  • Is the broker regulated by a reputable regulator?
  • If the Broker is regulated by a major regulator, it means that the Broker is seriously trying to comply with the regulator’s requirements.
  • Does the broker offer his customers more than forex trading?

If a Forex broker offers futures, commodities, stocks or CFDs in addition to Forex, in most cases this means that the broker has a larger business and serves more customers.

Good and bad broker ratings

Read and analyze the evaluations and experiences in our Forex and CFD broker comparison. Often it is possible to deduce from the evaluation how well the trader is familiar with Forex trading and how well he knows the subject he is writing about. In this way you can filter out the bad evaluations in which trading beginners accuse their broker, for example, although it may be their own inability to do so that was responsible for the problem described.

On the other hand, smaller forex brokers or providers of forex signal services sometimes write their own reviews of their own service in order to push it. With larger brokers, especially those who offer a good service, this is usually less common. But even these ratings can be filtered out relatively well by careful analysis. If most reviews of a service are bad, it is hard to believe that a user gives a 5 star rating and has never experienced any of the problems described. Here you should take a closer look.

Find the best Forex and CFD broker: Step 5

A few more tips to finish

Ultimately, the way to find the best Forex or CFD broker should be similar to choosing a bank to which you entrust your money, taking into account the bank’s reputation, the transparency of the company, the services and conditions offered and the way you are treated as a customer.

User Agreement / Client Agreement

What is a User Agreement / Client Agreement ? As it sometimes turns out, the information on the websites of CFD and Forex brokers is not always up to date. For example, a spread of 1 pip is given, but the spread is already at 2 pips, or the broker officially allows scalping, although in reality this is not the case.

Therefore, always read the User Agreement / Client Agreement before opening an account, instead of just checking the box “I agree / agree”.

Remember this:

In the end, good research before opening an account always pays off for you! Money that is eaten up by fees, slippage or similar things at an unsuitable broker may prevent you from profitably participating in trading, making the difference between success and failure!


Read my other articles about Forex Trading:

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