Why traders should Compare Forex Brokers?
Choosing the right forex broker is the second most important factor to successful trading, only trading strategies and execution impact an individual’s performance is more important. This is because the broker determines the trading conditions, fees and instruments that can be traded.
1. Broker Fees
The main fee a broker charges is the spread which is the difference between the ask and sell price for any currency pair. Our research found that spreads can be up to 300% higher between the most competitive brokers and expensive ones.
The second fee is the commission which applies to RAW/ECN accounts. In this case, the broker with the lowest fee had half the commission rate of the most expensive provider. The commission rate varies also by the base currency a trader selects when opening an account.
2. Trading Platform
There are a number of mainstream forex platforms most brokers offers. These include MetaTrader 4, MetaTrader 5, cTrader and TradingView. If you’re used to one of these platforms then you should visit our broker-by-platform pages. Then there are specialist platforms with unique features such as dealCancellation which may suit certain types of trading.
3. Broker Performance
The technology stack of each broker can impact factors such as slippage. Based on this, we tested each broker’s execution speed over two 26-hour periods so traders can understand the performance of each provider’s platform, liquidity and servers.
4. Trading Conditions
Brokers and often their regulators determine what can be traded and under what conditions. This includes leverage for retail traders which can range from 30:1 to 500:1. They also determine what type of trading is available for example in the UK only some brokers offer financial spreads betting accounts.
These trading conditions can often be tested on a demo account first before trading with real money. There is also a large variation in regard to the minimum deposit requirements to start trading on a live account.
5. Range Of Markets
While all providers offer currency trading on major currency pairs including EUR/USD. AUD/USD, EUR/USD and USD/JPY vary when it comes to exotic pairs. There is also variation when it comes to Share CFDs, commodities, EFTs and crypto CFDs.