How to find the best Forex broker.

Wondering what is the best broker of the moment? In this article we will analyze what are the elements to be careful in order to choose the right broker online.

What is a broker?

Forex Broker and CFD Definition

A forex broker or forex broker is a financial intermediary that transmits orders from its clients on the foreign exchange market. A forex broker is a regulated company, because to exercise this activity one must have an approval and a license. The

How to choose the best forex broker?

You should pay attention to the following:

  • Online Broker Regulation and Fund Security
  • CFD brokers with the best spreads
  • The different types of trading accounts
  • The trading platform
  • Accepted trading strategies
  • Client service
  • Online trading formations

How to choose A Forex Broker

We will now look at how to choose a forex broker. Here are the criteria to take into account

  • Forex Broker Regulation - It is better to open an account with a regulated broker.
  • Trading Platform - Choose the broker with the platform with which you are most comfortable and which fits your needs. See our MetaTrader 4, Webtrader MT4 and MetaTrader 5 pages

  • Spreads - Finding the broker with the lowest spreads is good, but watch out for different marketing techniques. A lower spread advertised on the trading site does not necessarily mean that you will have this spread all the time on your orders. In addition, there are ECN and STP accounts where you pay the broker only a commission. Finding the cheapest forex broker is giving a combination of spread, execution quality, commission and swap. Looking for a comparative forex spread broker is not necessarily the best idea, as a displayed average spread does not guarantee this spread when you place the order.

  • Order execution quality and Slippage - Having low spreads is good, having the orders executed at the asking price is even better.

  • Type of possible strategies - if you are looking for the best forex broker in France, be aware that a good broker does not put limits on trading styles to its customers. A forex scalping broker has no minimum distance to respect between the market price and the stop loss and take profit. Forex Broker No Dealing Desk or Dealing Desk - Depending on your strategy choose an ECN broker, STP or No Dealing Desk is more interesting for you. Make sure your broker offers you a run template that is right for you.

  • Fund Security - Choose a forex broker with bank accounts in Europe and especially with segregated bank accounts. Different types of trading accounts - a good broker can offer you several types of accounts: ECN accounts, STP or accounts with spread reductions for larger deposits. See our Types of Accounts and Forex Offers section. Opportunity to choose leverage - Forex is a market that is often traded with leverage. In order to manage one's position well, being able to choose one's own leverage is very important.

  • The markets on offer - it is always interesting to be able to invest in several markets at the same time. For that, a good choice is to work with a forex broker that offers other markets as well, such as indices, commodities, stocks, crypto currencies bonds or ETFs.

  • Customer service - having a broker with customer service in French is much more convenient and reassuring Forex Training - A forex broker does not have the right to give investment advice but can do training with a general character on forex. For forex beginners it is very important to understand the trader jargon, so a broker with good training tools is always better. Admiral Markets offers several courses: Trader 007, Trader Zero Trader Pro, or a whole library of articles on forex and trading.

Which Forex Broker to choose? How to evaluate a CFD broker?

We will now look at how to choose a forex broker and how to choose a good forex broker & CFD. Here are the criteria to consider:

Forex Broker Regulation & Fund Security

It is better to open an account with a regulated broker. On the internet there are many CFD brokers that are not regulated and where you can not find your money.

In this respect, following complaints made by French customers, the AMF (Autorité des Marchés Financiers) has established a black list of unregulated brokers who offer their services without authorization. The purpose of this list is to inform investors which brokers to flee and to make the difference with the forex brokers regulated by the AMF.

We are regularly updating our Black List AMF Broker (2018).

The security of your funds is also important. Choose a forex broker with bank accounts in Europe and especially with segregated bank accounts.

Some brokers, such as Admiral Markets UK Ltd, are part of the Financial Services Compensation Scheme which protects customers up to £ 50,000 in the event of a default by your broker.

Regulated Brokers - How to find a regulated broker (AMF or FCA)?

The first thing you need to check for the best forex broker is to verify that your trading site is regulated and licensed by the AMF or the Financial Conduct Authority (UK).

Today there are many scams on CFD trading sites and very often these sites have regulations that are not very rigorous or they are not regulated at all.

With the European passport any financial company registered in one of the countries of the European Union has the right to offer its brokerage services in other countries without the need for additional approvals.

That's why today in France there is only one regulated AMF broker and the other traders sites that are present in Paris are AMF authorized or AMF controlled. It's a very important word game. The AMF is not a regulatory authority for brokers who are subsidiaries of international groups and which are controlled by the AMF.

Many scam brokers claim to be based in Cyprus, which is a country with a somewhat sulphurous forex reputation. The simplest thing for a Forex beginner is to choose a regulated broker in France or England.

If you are looking for forex brokers online, a professional looking trade website does not guarantee that the broker is a trusted broker. London-based brokers are serious online trading sites if there is indeed an English regulation behind.

The advantage of an English broker is the FCSC, a system that guarantees the funds of the broker's clients if the broker goes bankrupt for GBP 50,000. That's why UK brokers are good choices to place orders on the stock market, as well as AMF-regulated brokers. Admiral Markets UK Ltd is a regulated company authorized by the Financial Conduct Authority (FCA).

The spread of your Forex Broker

Which broker has the best spreads? Many traders who want to invest online are asking this question.

Finding the broker with the lowest spreads is good, but watch out for different marketing techniques.

A lower spread advertised on the trading site does not necessarily mean that you will have this spread all the time on all your orders. In addition, there are ECN (Electronic Communication Network) and STP (Straight Through Processing) accounts where you pay the broker only a commission. Admiral Markets offers the second solution - STP accounts.

Finding the cheapest forex broker is therefore a combination of spread, execution quality, commission and swap. Looking for a comparative forex spread broker is not necessarily the best idea, as a displayed average spread does not guarantee this spread when you place the order.

Another important factor in choosing a reliable broker is the quality of order execution and slippage - Having low spreads is good, having the orders executed at the asking price is even better.

All our spreads are available on the Contract Specifications.

Here is an overview of the typical spreads that the regulated broker Admiral Markets offers:

Financial instrument

Typical Typical Spread Trading Schedule

EURUSD 0.8 point

DAX30 CFD 0.8 point

CAC40 CFD 0.8 point

DJI30 CFD 1 point

Source: Admiral Markets Contract Specifications

On the internet there are many comparative spreads broker, but often the third party sites are not updated, so it is better to go and open a trading account at the broker in question.

Trading Accounts of the Best Forex and CFD Broker The trading accounts of each broker are different, by their proposed instruments, the effects of levers and the required trading margins. Depending on the financial instruments and platforms you want to choose, you may need to choose a different type of trading account.

A good broker can offer you several types of accounts: no dealing desk accounts, STP or accounts with spread reductions for larger deposits. See our Types of Accounts and Forex Offers section.

Opportunity to choose leverage

Forex is a market that is often traded with leverage. In order to manage one's position well, being able to choose one's own leverage is very important.

The markets on offer - it is always interesting to be able to invest in several markets at the same time. For this, a good choice is to work with a forex broker that offers other markets as well, such as index CFDs, commodities, stocks, crypto currencies, bonds or ETFs, or spot and cash equities. Exchange traded funds (ETFs).

Trading Platform

Many people are looking for the best online forex trading platform or the best MetaTrader broker.

Indeed, many online brokers are MT4 brokers or MT5 brokers, because MetaTrader is one of the most used platforms for Forex & CFD trading. There are also many brokers who offer proprietary trading software, each platform has its advantages and disadvantages - do not hesitate to test a demo account to decide for yourself which platform is best for you.

Choose the broker with the platform with which you are most comfortable and which corresponds to your needs. Check out our MetaTrader 4, Webtrader MT4 and MetaTrader 5 pages to choose the platform that's right for you.

Traders who wonder how to choose their forex broker for online trading also often wonder if the broker has a mobile platform available as iPhone or Android application.

It is important not only to choose the most popular forex brokers in France, but also to select a broker with whom you can trade with a mobile application, no matter where you are.

How to Find the Best Forex and CFD Broker

If you are looking for the best forex broker in France, be aware that a good broker should not limit trading styles to his clients.

A forex scalping broker has no minimum distance between the market price and the stop loss and the take profit, because this feature is very important for short-term traders.

For day traders, brokerage fees are important. For swing traders or long-term traders, the choice of the best forex broker is also compared to swap fees. For investors in spot shares, the choice of the best online broker will be made in relation to the custody fees and commissions paid to the broker, as well as the offer of the proposed shares.

Forex Broker No Dealing Desk or Dealing Desk - Depending on your strategy choose an ECN broker, STP or No Dealing Desk is more interesting for you. Make sure your broker offers you a run template that is right for you.

Some people have an arbitrage-type trading strategy - find out if your broker allows this kind of trading because not all online brokers allow it.

The customer service of a reliable broker

Having a broker with a customer service in French is much more practical and reassuring. Also, it is important that the online broker's customer service is reachable by telephone and that orders can be placed over the phone.

A forex broker does not have the right to give investment advice but can do training with a general character on the forex.

For forex beginners it is very important to understand the trader jargon, so a broker with good training tools is always better.

Investor training online is at the heart of the Admiral Markets principles.

The best way to learn trading is to simulate trading on a demo account. For live analysis, feel free to watch Live Trading Sessions.

If you are looking for the best forex broker 2018 you will inevitably find a lot of opinions on the internet about it.

It's important for you to keep in mind and understand that many of the opinions posted on the internet are not entirely irrelevant: forex forums often have partnerships with brokers and will give a better rating or price of best forex broker 2018 to one of their partners.

So beware of this and even make your own opinion: most regulated brokers offer a forex demo account.

Types of Forex Brokers

We can distinguish several types of forex brokers according to different criteria. Depending on their clientele, forex brokers can be:

forex broker for professionals and eligible counterparties forex broker for non-professionals

Depending on the execution of orders, there are:

forex dealing desk broker forex broker no dealing desk (or even STP or ECN) Depending on the trading platforms on the exchange rate we can have:

MT4 forex broker

Brokerage on the forex or the exchange rate is a regulated activity, so in principle there must be only regulated brokers on the market. However, there are many fraudulent companies or outright forex scams. Make sure your online broker is a regulated player that meets the standards.

Forex Brokers and CFD

For some years now Forex and binary options have some success in general. If you are looking for a Forex broker, know that many brokers working on France do it with the European passport that allows a financial services company to provide services anywhere in Europe.

To see if a broker is regulated, you can consult the Regafi search page. This will allow you to see if the broker with whom you are in contact is a regulated company.

Compare Forex Broker and CFD - Forex broker ranking As discussed earlier in this article, on the internet there are many comparative forex brokers and all kinds of online forex broker rankings.

In online CFD trading, as in everything else in life, one is never better served than by oneself. It is better to test yourself the services of a regulated AMF forex broker than to trust someone blind on the internet whose interests we do not know.

Admiral Markets UK is a forex and CFD broker authorized and regulated in England by the Financial Conduct Authority (FCA) and we can not give you an opinion on serious forex brokers or make a ranking of forex brokers. This would necessarily be very subjective. It's up to you to test the brokers' services and leave us comments at the bottom of this article.

Free trading platform

Regulated Forex Broker Trading and brokerage activity is a regulated activity in Europe. For this reason any regulated broker has an authority with which he is registered, who regulates him and who has the right to control him.

The regulation of the broker is a guarantee of the respect of the laws and the norms in force and finally of the protection of the customer. There are many brokers regulated by the AMF in France or by the FCA in England.

Choosing a regulated broker is very important if you want to trade forex online. If you are looking for the best forex broker online, the selection criteria are personal and you should make yourself a forex broker notice.

If you are looking for a broker comparator, know that in trading as in other areas, one is never better served than by oneself.

Nothing prevents you from opening multiple trading accounts and actually testing the trading conditions.

You can also test a free trading site, but this may not be enough: the real conditions of the currency market are not available on an online trading simulation.

Understanding Forex basic terms

Floating rates and fixed rates

It is important to distinguish between so-called floating currencies and so-called fixed currencies. The rate of a fixed currency is arbitrarily defined by a State (indexed to a major currency in general, such as the euro or the US dollar) and can only be changed by a decision of that State.

To maintain this rate, the central bank of the State concerned buys or sells its own currency on the foreign exchange market against the currency against which the value of its currency is fixed in order to maintain a stable level of supply and demand . The rate of a floating currency depends, in turn, only on market fluctuations, it is simply under the influence of supply and demand without the permanent intervention of its central bank.

The Pacific franc, the Danish krone, the Hong Kong dollar and the United Arab Emirates dirham are examples of fixed currencies4. The US dollar, the euro, the yen, the Swiss franc, the Chinese yuan, and bitcoin are examples of floating rate currencies.

The Swiss franc is a special case, it is a floating currency that the Swiss National Bank has decided to cap at parity 1 € = 1.20 CHF (that is to say that € 1 could not be worth less than 1.20 CHF), not by decree but by displaying a strong will and by simply carrying out operations on the market. This ceiling was in place between 6 September 2011 and 15 January 2015, when it was abolished5 by the Swiss National Bank.

Quote

In Forex, we always express the rate of one currency against another. Take the example of the EUR / USD quotation as of May 13, 2019: "EUR / USD = 1.1281". This quotation must be translated as "1 euro equals 1.1231 US dollars". The euro is the listed currency (since it is still worth ONE), while the dollar is the currency listed at the uncertain (since we do not know its value without having previously seen a listing page).

The left currency is called the base currency (here EUR), the right currency is called the counterpart currency or the countervalue currency (here USD). And the quote always reads in the same order (one expresses the base currency according to the counterpart currency).

The smallest difference in quotation is pip, or percentage in point. For the vast majority of currencies, this is the fourth decimal place of the quotation. For example, if the price goes from 1.131 to 1.1233, then the price is 2 pips. The yen is an exception with respect to the value of the pip: in this particular case, the pip is the second decimal of the quotation.

Rating schedules

The Forex market is open 24 hours a day. Indeed, the main stock exchanges in the world take turns (London, then New York, then Sydney, then Tokyo) thus causing no interruption for traders, with the exception of weekends. In practice, Forex quotes start on Sunday evening with the opening of the Sydney Stock Exchange (22 GMT to about one hour as well) and stop on Friday night after the closing of the New York Stock Exchange ( 22 h GMT to plus or minus one hour depending on the time difference in summer time). But in reality, there is no fixed opening or closing schedule for quotations, since Forex is an over-the-counter market and not a stock market. So in theory, there can be quotes anytime, on Saturdays, holidays or even New Year's Day.

Although open 24 hours on weekdays, the bulk of the activity takes place when the London Stock Exchange is open. The market is traditionally quieter on Mondays (because there is no significant economic figure) and more and more volatile on weekends, with often a maximum on Friday (the day of the release of the most important economic figures).

Leverage

One of the key features of Forex trading is the significant leverage offered by brokers (up to 1000 in some retail brokers for individuals, compared to 5 on the SRD for the stock market). The leverage effect makes it possible to put on the market a sum up to 1000 times higher than that which the customer possesses, with a risk taking just as high. Too much leverage, coupled with a lack of knowledge of the market, is also the cause of ruin of many individuals while the Forex market is 2 to 3 times less volatile than the stock market.

The different types of orders

There are several types of orders on the Forex: simple orders, ie market orders, limit orders and stop orders and finally combined orders, namely orders OCO or If Done6.

Forex for individuals

Forex trading is not done on an organized market but on an interbank market, the only way for individuals before the 2000s to invest on exchange rates was to go through a banking institution. However with minimum transaction amounts around one million euro, few investors had access to this market. Since the 2000s and the implementation of the MiFID Directive, all investors, individuals and professionals, can then trade on the foreign exchange market for smaller amounts through brokers. This market has grown strongly in recent years thanks to the Internet.

In France, the AMF issues regular press releases on the high risk of loss associated with Forex (up to 400 times the committed capital), regularly publishes the list of unauthorized sites7,8 and warns even for sites with the growing number of abuses found9. In October 2014, the AMF published a "Study of the results of individual investors on CFD and Forex trading in France", based on a sample of 14799 individual investors for more than 4 years, which shows that 9 out of 10 are losing in these markets10.

On January 10, 2017, in the context of its mobilization for several years to denounce the danger to individuals of speculative trading products such as forex, the AMF has defined the terms of the mechanism to ban advertising to individuals for the most risky financial products, this under the so-called Sapin 211 law.

Most common abuse

  • The impossibility to withdraw money: the broker prevents any withdrawal, or accepts withdrawals only once a minimum threshold on the account reached.

  • Credit card fraud: once the bank details have been provided (by phone or after a first deposit), withdrawals are made to the clients' account without their consent.

  • A "bonus" offer is offered to customers, with the company pledging to credit the customer's account for the same amount as it deposits. The client then learns that the bonus is only granted subject to having bet at least x times its amount (from 20 to 30 times in the cases mentioned).

  • Managed Account Fraud: Training offers are offered, and a "coach" is assigned to the client. Very often, it is proposed to the beginners to be advised telephonically in their paris by the coach. During the first losses, the coaches advise the client to put additional funds to "rebuild". When the losing bets accumulate, "the coach becomes unreachable or brings for only explanation that a bad trade is at the origin of the losses".

The trading robots fraud is very present in the Forex market. It is about proposing robots that have supposedly exceptional performances but whose results are actually falsified or biased.