How To Choose A Broker?
To pick a good broker, you need to know what to look for and which criteria to consider. Knowing exactly, what characteristics to look for, you can compare different brokers and choose a reliable brokerage company (binary brokers, forex brokers) to trade safely, without any problems.
- Regulation and experience in the market
- Trading conditions
- Quality of service and trading platforms
- The speed of funds withdrawal
The broker, which proves to be the best by the most of these criteria will be the best broker in the Forex market.
Regulation and experience in the market
It’s quite obvious that the Broker which has been operating in the market for a long time has an extensive experience is more reliable and trustworthy. The longer the business exists, the more clients it attracts. When thousands of clients register and trade with the broker and if some of them become unsatisfied with the service, it instantly becomes public. So, the traders’ trust and opinion depend strongly on the broker’s expertise.
Having a license is equally important. An unregulated brokerage can do anything, it’s business activity is not governed by any rules and regulations. A licensed broker, on the other hand, ensures transparent and fair cooperation with its clients. In case of a dispute, a client has the right to contact the regulatory body, which oversees the broker’s activity, and file a compensation claim if the broker refuses to fulfill its obligations. Thus, having a license is a good thing.
Now, let’s take a look at our brokers and their regulation:
- AMarkets – established in 2007, has been on the market for 11 years. Regulated by the Financial Commission and audited by Ernst & Young, a global accounting firm.
- easyMarkets – founded in 2001. Regulated by the Australian ASIC and the Cyprus Securities and Exchange Commission (CySEC), has a permit from the Polish Financial Supervision Authority (KNF).
- Finmaxfx – opened its Forex trading division in 2017. Licensed by the FSA. However, it’s unclear whether it’s FSA UK or FSA Seychelles, both authorities have the same abbreviation.
- Plus500 – established in 2008, licensed by the British regulator FCA (the UK Financial Ombudsman Service). But they only mention this license on their website without providing an actual proof of having it.
- IQ Option – founded in 2013, no license. According to the broker’s technical support, they are registered in Seychelles and regulated by the local laws.
Based on the results of this comparison, we have two obvious leaders: AMarkets and easyMarkets. Both brokerage companies have been operating in the market for a long time and they both have licenses.
In addition to reliability and confidence that there will be no interference from the broker, the trading conditions offered by the brokerage company are also essential for the trader. After all, if a broker has a big spread, it makes no sense to trade using scalping and other short-term strategies with this broker. Not all traders prefer medium and long-term trading, so it’s important to choose a broker that provides the best trading conditions.
|Spread||Floating from 0 pips or fixed 3 pips||Fixed from 1,8 pips||Fixed from 3 pips||Floating from 0 pips||No|
|Leverage||Up to 1:1000||Up to 1:400||Up to 1:300||Up to 1:30||Up to 1:500|
|Minimum deposit||No||$100||$100||100$ (100€)||$10|
|Types of accounts||Standard, Fixed, Bitcoin, ECN||Standard, Premium, VIP, Super VIP||Micro, Standart, Premium||Standart, Demo||Standart, Demo|
|Instruments||From 250||From 40||From 180||From 2000||From 50|
As we can see from the table, AMarkets offers the best trading conditions. It’s also worth noting, that it’s the only broker, which offers Bitcoin account.
Quality of service and trading platforms
In addition to the trading conditions, it is always necessary to check the quality of provided services. After all, if a broker has a low execution speed, it can cause the slippage and very frequent requotes, which can hinder the medium-term and intraday trading, not to mention scalping, and prevent many short-term traders from making profit.
If the broker uses reliable transmission channels, a large number of liquidity providers, offers access to the interbank market and the fast speed of order execution, then depending on the account type, there may be a complete absence of requotes and orders will be placed instantly, which allows you to trade manually with any strategy or using expert advisors.
It’s also worth considering the quality of available trading tools, particularly the performance of the trading terminal. If the platform freezes or slows down all the time, it makes it impossible to place the trade fast and at the desired price, even if the broker processes each request swiftly. In this regard, the quality of provided service should also encompass using top-tier equipment and technologies. Let’s have a look at our five brokers and their characteristics:
- AMarkets – offers reliable and time-tested trading platforms MetaTrader 4 and MetaTrader 5, MetaTrader 4 Multiterminal, mobile apps and a Web-terminal. Orders are executed with Instant and Market Execution, using NDD technology, which provides access to the interbank.
- easyMarkets – MetaTrader 4 platform (desktop, mobile and web versions). There’s no information on the types of execution on the official website.
- Finmaxfx – MetaTrader 5 platform (desktop, mobile and web versions). No information on execution types.
- Plus500 – in-house developed trading platform Plus500. Available in a web and desktop version for Windows 10, mobile versions for Android, iOS and Windows Phone. There is no data on the execution types and trading methods.
- IQ Option – uses IQ Option trading platform. Has a web-version, desktop version for MAC, Windows, Ubuntu, and is also available on Android and iOS.
Having compared the quality of services and trading platforms, we can conclude that AMarkets holds the first place in our ranking because it offers traders the largest choice of reliable trading platforms and excellent quality of services. It should be also noted that it is also the best in execution speed among its competitors in the Forex market.
Funds deposit and withdrawal
Another criterion to consider is how fast and easy the broker processes your withdrawal requests. If the company procrastinates coming up with different excuses to delay the payment, it’s probably best not to work with such a broker. A reliable broker ensures fast withdrawal and offers a wide range of different payment methods.
Some companies, for example, set up automatic withdrawals up to $5000, so the trader can be sure, that he always gets his money immediately. Larger amounts are withdrawn manually within 1-3 business days, after the security check.
- AMarkets – instant withdrawal to bank cards or via an electronic payment system. Bank transfers take up to 3-5 business days. The broker offers 10 different payment options including Bitcoin cryptocurrency wallet and has no minimum withdrawal amount.
- easyMarkets – bank transfers are processed within 3-5 business days, other payment methods are either instant or may take up to 2 hours. There are 7 withdrawal methods available and no minimum withdrawal amount as well.
- Finmaxfx – withdrawals are made within 5-7 days, the minimum amount is 25 USD. The broker offers 10 payment options.
- Plus500 – 4-6 days for bank transfers, other transfer methods are instant or within 7 hours (PayPal, Skrill (Moneybookers). No minimum withdrawal.
- IQ Option – withdrawals take one business day. Available transfer methods include bank cards, WebMoney, Skrill, Neteller.
AMarkets confirms it’s leading positions again – it’s the only broker that offers instant withdrawals to bank cards.
Which broker to choose?
Summarizing the results of our comparison, we can state, that among the 5 brokers that we have reviewed AMarkets is most assuredly the best broker to trade in the Forex market. In this article, we took only the most important characteristics of a broker, but it’s obviously not the full list. Reviews from other traders, for instance, can also very helpful in picking the right brokerage. Some traders would also look for such services as trading courses and education, good analytics and etc. We have outlined the main characteristics to look for in a good broker, use this checklist as a reference, and you’ll definitely make the right choice.
*CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.