Search

How to find the best forex broker?

Updated: Jan 12

To pick the best forex broker, you need to know a couple of things. A lot of people want to get started with forex trading. In order to do so, you need a good broker. The question is: what is a good broker? In this article you are going to read about how you can pick the best forex broker. It’s quite in depth, so stay with me and take notes. After reading this article you know exactly what to look out for when picking a forex broker and you can get started immediately.


Which broker is the best?


There is no best forex broker. This sounds weird, but there are many good ones out there. Just like with trading, there is no best strategy. The best strategy is the one that works and the one that fits with your needs, personality & lifestyle. The exact same thing goes for finding a forex broker. The broker has to fit with your needs.


So, what are your needs? You probably want to make money trading in a safe way. You want low costs and easy withdrawals. You also want to know that your money is safe in case the broker goes down. This all sounds good, but how do you take action and pick the best forex broker? Let's dive a bit deeper into this topic.


What points to consider when picking a forex broker?


There are a lot of points to consider when picking a forex broker. Below you will find the most important points. Keep in mind these are the most important points from my experience. You might think other points are more important, which is totally fine.

  • Costs

  • Regulation

  • Withdrawals

  • Customer support

  • Execution and slippage

These are the most important points to consider when you want to find the best forex broker. Let’s dive deeper into each one of them.


Costs

Trading for free is not going to happen. A broker needs to make money, otherwise a broker would not be doing what he is doing. So, how does a forex broker work? Simple! You execute your order and a broker makes sure the order gets sent to a liquidity provider. Then your order is fully executed. This is in easy terms how a broker works. There goes more into it, but this is enough information to understand the concept.


Every time you open an order, a broker charges you a spread and commissions. Sometimes you pay no spread, sometimes no commissions, but there are always some costs to pay when placing a trade. You have to realize that when you find a forex broker with low spreads, usually they charge you in another way. Only looking at low spreads is not the best way to find a broker.


A broker also makes a profit if they run a B book. What is a B book? A broker can basically choose if they send your order to their liquidity provider. They can also choose to not do that. They can simply take the other side of your trade. Why? Because if you sell, someone needs to buy. If you are a losing trader, doing the opposite of what you are doing makes money. So, a broker keeps a detailed record of which traders are losing money. They take the opposite of those traders. This way they make money when you lose. Usually, they make a lot of money trading this way.


Now, not all the brokers do this, but most forex brokers do. Is this a bad thing? No. Trading against your broker usually means better execution. When you are profitable, they put you in their A book and they don’t trade against you anymore. So, work hard and become that profitable trader.


This video can help with that.


Regulation

Now you know how brokers work, it’s important to look for a broker that is regulated in a reliable country. Brokers can spike prices if they know that a lot of stop losses are at a certain price level. They can even widen spread in those areas to make you lose and so that they win more. When you pick an offshore broker, this happens way more often than when you pick a regulated one in a safe country. What are the best countries for picking a broker? The United Kingdom and Australia. If your broker is regulated in those countries, you usually have a safe and stable broker.


I often get asked if a forex broker can steal your money. The answer is yes. But only if you pick one that is not regulated. Usually, a forex broker won’t steal your money. If you pick a regulated broker, the odds of a broker stealing your money are very, very low.


Withdrawals

When you make profits, you want to be able to withdraw these profits. Some brokers make it very hard for you to withdraw your profits. At some brokers it can take days, sometimes weeks, to withdraw your money. Pick a broker that allows you to withdraw and deposit quick and easy. You want to make an income from trading, so make sure you can withdraw that income when you need it.


Customer support

Something can always go wrong when you are trading. Your platform might freeze, which might make it unable for you to close a position. In those instances, you need support. You want to pick a forex broker that has good customer support. How do you know if a broker has good customer support? Just use their chat function, or send a message. How quickly do they respond? Send them a complicated question, are they able to answer it fully? Test them out, and choose a forex broker with great support.


Execution & slippage

When you press buy or sell, you want to be filled at the exact price that you want to buy. Of course, when you do a market order, this is very rare. But when you place a buy limit and you get filled 10 pips away from your original limit, that is something that should concern you. You want to have great execution.


Slippage is also something to look out for. Slippage in forex trading is real and can happen during times of low liquidity and massive volatility. However, if you notice that every time your stop loss or your take profit gets hit you get slipped a few pips, it’s time to switch brokers.


Which forex broker is the best?


So, which forex broker is the best? It’s the one with the lowest costs, so a forex broker with low fees. It’s the one with fast withdrawals, good customer support, great execution and the one that is well-regulated. That’s the broker you want to pick. And of course, look for your other needs. Do you want a forex broker with high leverage or a forex broker with the lowest spreads? Do you want a forex broker that supports MT4? Then search for those, but make sure you also take into account all the points I spoke about in this article. This way you find a forex broker that is legit and you find out which forex broker is the best for you.


To conclude


Searching for the forex broker with the lowest spread, or with high leverage only, is a mistake. You have to take into account more things. Now you know exactly how you can find the right forex broker. So, time to take action. Research brokers using the points given above. Before you know it you have found the best forex broker. Take this seriously, because when you are going to trade with more capital, you want your money to be safe and you want low costs, to keep most of your profits. Good luck!


Tired of losing money? Ready to turn your trading around? Schedule a free call now.


Or, sign up for this life-changing training.




35 views0 comments

Recent Posts

See All

The game is hard. Forex trading is hard. We all know that. Sometimes, it can even seem so hard that you want to quit. Everyone has been there before. In this article you are going to read more about m