Top rated Brokers of the year 2021
In our forex broker comparison you will find all the crucial information regarding our partner forex brokers. In our comparison you will also find information about their trading platforms, trading conditions, fees, deposit protection, regulation and more. So that you don't just have to rely on our tests, you will also find reviews and testimonials from traders for almost every forex broker. So you can find the best forex broker for your needs quickly and easily with our forex broker comparison.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Most retail investor accounts lose money when trading spread bets and CFDs. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. Options are complex financial instruments and your capital is at risk. Losses may be extremely rapid.
How to Find the Best Forex and CFD Broker?
There are basically 2 ways to find the best Forex broker or CFD broker for your needs. The simple and the more complex way. We describe below how you can use these methods to find the broker that is best for you.
The quick way
Here you can briefly read the reviews and experiences of other traders in our forex broker reviews and choose your broker based on their experiences and reviews. Basically, this is not a bad option and should definitely protect you from opening your account with a really bad broker. However, in some cases a 5 star rating is no guarantee that the forex broker is exactly the right broker for your individual needs. As so often in life, this depends on your individual needs and your strategy in Forex trading .
The thorough way
In addition to the reviews you have read, you do your own research on the respective online brokers and make your own CFD broker comparison.
Finding the Best Forex and CFD Broker: Step 1
Start your search for the best forex broker by asking yourself what exactly you need from a broker to be able to trade successfully and make a list with all the requirements.
This question varies a lot. It can be based on your trading strategy, if you want to trade your account yourself, do you want some kind of PAMM or MAM or Copy Trading solution?
Questions you should ask yourself are, for example:
- Which currency pairs do I want to trade?
- What is the maximum spread they can 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 respective broker?
- Which leverage do I want / need for trading?
- What 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 to trade extremely short durations(scalping).
- Do I want to be able to hedge my positions?
- Do I want / need a trailing stop?
- Do I want / need to be able to trade with one-click-or-execution?
- Do I need mobile trading or a web-based trading platform to be able to log into my trading account via 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?
- Are there any Inactivity Fees with the Broker?
Finding the Best Forex and CFD Broker: Step 2
Visit the websites of the respective Forex or CFD brokers and find out about their range of services.
Speak with their customer support or compliance department.
Finding the Best Forex and CFD Broker: Step 3
Now there should only be a few brokers left who meet the criteria you set. Now it is time to find out about the conditions, forex trading rules, company policy, regulation by an authority and the general terms and conditions on the websites of the brokers. Try to get a feel for how transparent the broker is to its customers. An important point is the availability of a branch or office address. If a broker does not provide a physical office address on their website, all alarm bells should be ringing for them. Telephone, Skype, chat, email - none of this counts if the broker does not provide a physical address on its website.
Don't let the professionalism of a website blind you. Even dubious brokers have well-designed websites.
We strongly advise against opening 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
Finding the Best Forex and CFD Broker: Step 4
Be sure to read the experiences and reviews of forex and CFD brokers in our forex broker comparison . However, we also advise you, if available, to find out more about experience reports with the respective broker via other sources of information.
If you absolutely want to trade via an ECN broker, read the experiences and reviews of ECN / STP brokers in our ECN / STP broker comparison.
Broker experiences and ratings differ
As helpful as experiences and reviews of Forex and CFD brokers can be, they can be confusing in some cases.
It can happen that there are several good and bad reviews of a broker. This is possible because every trader has different demands of his/her broker. What is okay for one may be insufficient for another. In this case, we advise you to read the ratings carefully and ask yourself whether the negative rated points would be detrimental to your trading, or whether you can neglect these points in your trading strategy.
Age and Scale of Broker
Some questions you can 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 business for 10 years or more, this tells them that the broker has forex trading experience and cares about their clients. Otherwise he would most likely not be there today.
- Does the broker offer their clients more than forex trading?
If a forex broker offers futures, bonds, cryptocurrencies, commodities, stocks and CFDs in addition to forex, in most cases this means that the broker has a bigger business and looks after many customers.
- Are they offering real underlying assets as well as CFD's?
Good and bad broker reviews
Read the reviews and experiences in our Forex and CFD broker comparison carefully and analyze them. Often it is possible to deduce from the assessment how well the trader is familiar with Forex trading and how well he is familiar with the subject he is writing about. In this way you can filter the bad reviews in which novice traders, for example, accuse their broker, although their own inexperience may be to blame for the problem described.
On the other hand, smaller forex brokers or providers of forex signal services sometimes write their own reviews in order to push it. With larger brokers, especially brokers that offer a good service, this happens less. But even these evaluations can be filtered out relatively well through careful analysis. When most of the ratings and reviews are bad, it's hard to believe that a user gives a 5 star rating and has never experienced any of the problems others have described. You should take a closer look here.
Finding the Best Forex and CFD Broker: Step 5
Ultimately, the way to find the best forex or CFD broker should be similar to choosing a bank to entrust your money to, including the reputation of the bank, the transparency of the company, the services and conditions offered on 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 CFD and Forex broker websites is not always up to date. For example, a spread of 1 pip is given, whereby the spread is already 2 pips, or the broker officially allows scalping, although this is not the case in reality.
You should therefore always read the user agreement / client agreement before opening an account instead of just ticking the box next to "I agree".
Ultimately, good research in advance of opening an account always pays off for you! Money that is eaten up by wide spreads, high overnight fees, execution slippage or similar things may prevent you from participating in trading profitably and thus makes the difference between success and failure!
Forex (FX), is an abbreviation of foreign exchange. Specifically, it is the method by which one currency is exchanged for another. The rate of exchange is fundamental for this type of trading. The difference between any two rates of exchange creates trading opportunities for buying or selling. One can take a position in anticipation of an increase or decrease in a rate of exchange and then exit the trade with a profit if their forecast of price movement was correct.
The international markets are among the most active global markets for trade, generating more than $1 trillion in trades per day. Trading takes place from Sunday to Friday in what is effectively a global 24-hour marketplace. The most significant markets are those in major world commerce centers such as those in the US, Switzerland, Great Britain, and throughout the Asia-Pacific region. The market acts as a catalyst to stimulate fundamental changes in economies worldwide.
Due to their 24-hour availability (5pm US Eastern Time Sunday through 5pm US Eastern Time on Friday), these particular markets offer an especially high level of flexibility, enabling traders to participate part-time or full-time as their schedules permit. Unlike other markets, those which involve foreign currency offer excellent liquidity at any time of day, a trait not seen even in most other 24-hour markets. Thus, one can trade large amounts of volume with minimal market impact. U.S. participants are permitted to leverage up to 50 times their account value on most major pairs, and minor pairs offer a 20 to 1 margin. Leverage amounts are subject to change and may not be available at all times.
Numerous factors that contribute to supply and demand can influence the volatility of a given currency. Such factors may world news and events, political actions, monetary policy, and other economic indicators, for example. One's ability to access this market via the internet makes it simple to trade currencies online from anywhere. However, it is critical that investors fully understand the nature of these markets, as well as the involved risks and procedures before initiating any trades.
How to Start a Forex Trading Account
Forex trading can be exhilarating, but before you can delve into the exciting world of FX trading, you'll need to select a broker and make a new account. Everyone has to start somewhere, and the starting point for traders of all kinds is account creation. Here’s everything you need to know about signing up with a broker and getting started.
First, you will have to select a broker. To do this, try out various brokers’ forex demo accounts and decide which one best meets your specific needs. After choosing a broker, you’ll need to create your account, which is comparable to opening a bank account. When creating an account, you are usually required to provide the following information:
- Mailing address
- Country of citizenship
- Email address
- Phone number
- Date of birth
- Tax ID or social security number
- Type of currency used
- Employment status
- A password
In addition, you’ll likely be asked to answer several financial questions, which may include:
- Net worth
- Annual income
- Any experience with trading
- Trading objectives
There is a very simple reason why brokers need all of this personal information. They are required to comply with the law. Still considered by many to be a “new frontier” industry, regulations have been put in place in an effort to protect account owners from potential harm.
The chances of you finding a broker who will allow you to open an account without answering these questions are minimal at best. In fact, if you come across a broker who is requesting too little information, you probably want to stay away from them. If you ever have any doubt about a broker, you can learn their status through the National Futures Association.
Toward the end of the opening process, you will see a list of risk disclosures that you should read over carefully. On average, more people lose than win, especially in the beginning. Be aware that the broker is required to remind you that forex trading has the potential to be a dangerous business. After submitting your information, the broker will verify it. This may require you to send in certain documents, such as a government ID or some type of utility bill to prove your address. Don’t be surprised if it takes a day or two to go through.
After your information has been verified, you’ll be able to deposit funds into your account and start trading. The most important thing that you, as someone new to trading, should know is to never put more money into your account that you can comfortably afford to lose. Do not take any unnecessary risks. It’s best to start with a small amount of money and small trades in order to ensure your funds are protected. Once you are seeing a consistent profit, you may want to start increasing your trades.
How to Start a Forex Demo Account
Maybe you are one of the lucky ones who was born with an intuitive understanding of how trading works and how to make it work to your benefit. If your knowledge makes you infallible you should be congratulated, but if you are not comparable to Warren Buffet just yet, you may do well in testing your trading skills before taking a risk. By signing up for a free demo trading account you will be able to test your knowledge prior to placing your funds at risk.
Several brokers offer free online demo trading accounts. Vendors such as Plus500, JAFX and IG offer online demo trading accounts that, although different in look, allow you to test your business acumen. Overall, they will all request some personal information as well as the creation of password and username for you to try their product. As a user, you should never pay for a demo account. The one condition you should never compromise is the site’s ability to report information in real-time, which is essential to trading successfully.
Take your demo account seriously and make sure to familiarize yourself with its inner workings. Any training material and webinars offered by the vendor are great resources to get started. Most demo account providers will offer investment advice and tips for their users so your experience is seamless and you become a paying customer. Take full advantage and explore how the platform works until you are fully comfortable and ready to start trading in real dollars.
Even though it is a demo account, you should treat it as if you were risking real money. Utilize all research sources available online so you are not only knowledgeable on how the account works, but also the industries where you plan to invest and any outside factors that may impact your performance. It may also behoove you to open several trading demo accounts where you can model alternative trading strategy. Make sure you keep close watch over your portfolio and become comfortable with your own tolerance for risk and understanding of market fluctuations.
Once you have tried your hand for at least six months then take the plunge and open a live account. However, be mindful of the risk you are taking and do not rush into things. Slowly get used to trading in a live environment and assess the level of funding you are willing to risk at one time. Just because you were successful in the demo account does not necessarily mean you are infallible, so take your time in avoiding less than desirable consequences.
Risk warning: Foreign Exchange and CFDs are complex and leveraged instruments and come with a high risk of losing money rapidly due to leverage. 74-89% of retail investor accounts lose money when trading Forex and CFDs. You should consider whether you understand how Forex and CFDs work and whether you can afford to take the high risk of losing your money.
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