Forex broker comparison – Find the best Forex broker!
A Forex Broker Comparison is worthwhile, because using certain criteria, traders can quickly identify the differences between the providers. This includes registration, fees, potential profits and ultimately the trading itself. Our comparison of top forex brokers helps you to filter out the aspects that are important to you personally. In order to become the best Forex broker, a provider must meet various requirements and be convincing in several areas. No matter whether you are just starting out in forex trading or have already gained experience – the choice of broker should always be well considered.
Foreign Exchange Market
The term Foreign Exchange Market (Forex) refers to currency trading that enables investors to make quick profits. However, where exchange rates rise quickly, they can also fall just as quickly. Experienced Forex brokers know how to deal with the fluctuations and help prospective traders in their buying and selling decisions.
Meanwhile, there are more and more people who are interested in Forex trading and are familiarizing themselves with the subject accordingly. How currency trading works exactly, interested parties often only learn about it after a certain period of getting used to it. The advantages of currency trading are mainly shown in the fact that the traders can already start with little capital. Then the volume is almost unlimited upwards, so that very high trading volumes are possible. Even small amounts of money will bring the ambitious traders forward, if they proceed well thought out and skilfully. This means making the best possible use of currency fluctuations while keeping the risk as low as possible.
Start with standard currency pairs
Beginners should not necessarily invest immediately in exotic currencies, as the volatility and associated risk are very high here. It is advisable to concentrate on the standard currency pairs (majors) first. These are for example the currency pairs
- Euro / US-Dollar
- US Dollar / Japanese Yen
- Swiss Franc / British Pound or
- Euro / Swiss Franc.
The fluctuation margin (volatility) is lower for these currency pairs. Price movements are somewhat easier to predict than with exotic currencies.
What is particularly important in currency trading?
Forex trading is about buying currencies at a favorable rate and selling them again once they have reached a certain value. The Forex market is considered to be the world’s most important financial marketplace. The daily turnover is around 5 trillion US dollars. The individual traders trade with only a small fraction of this amount. Nevertheless, they can achieve considerable profits. The actual trading takes place to a large extent between the various participants in the foreign exchange market. For this reason, the foreign exchange transaction or the exchange of currencies is also called “over the counter”.
Foreign exchange transactions have long since proven to be lucrative. Often it is the main currencies, including the euro, that traders exchange. The price depends, as in the stock market, on the relationship between supply and demand. In addition, economic and political events in a country determine the price fluctuations. Current interest rates and other criteria can also affect the interplay of exchange rates.
In order for currency trading to bring a profit for the trader, he must therefore forecast in which direction a price will move. For example, if the trader expects the euro to rise against the US dollar, he can open a long position to profit from the rise in the rate. However, if he expects the price to fall, he opens a short position. Depending on the order, traders can make profits on rising and falling exchange rates.
The risks in foreign exchange trading
Where very good returns are possible, there can also be very large losses. In this context, the so-called leverage plays an important role for forex traders. Who trades with little capital, can still achieve high returns. However, the risk of losing the invested capital is also significantly increased here.
Advantages and disadvantages of the leverage effect
Many brokers enable traders to implement a high trading volume even with a small capital investment. The maximum available leverage for Forex Majors is 1:30 (3.33 percent margin). Forex Majors are all currency pairs that contain the following currencies:
- US Dollar (USD)
- Euro (EUR)
- Japanese Yen (JPY)
- British pound sterling (GBP)
- Swiss Franc (CHF)
- Canadian Dollar (CAD)
The profits can therefore be many times higher than the money originally invested. At the same time, however, the leverage also increases the risk of losses. If the broker determines that the loss exceeds the invested capital, he asks the trader to increase the stake. This is also called a margin call.
Anyone who wants to enter into foreign exchange trading should be well informed about this subject and be aware that there is no guarantee of profit. Numerous different influences to which price developments are subject play a role – ranging from political or economic events to the sometimes nervous reactions of other market participants.
The most important criteria in the Forex Broker Test
A solid Forex broker test should always be based on different criteria. Because in order to lay the foundation for foreign exchange trading, a trader needs a broker he can rely on and who fits his personal expectations.
In addition to financial aspects such as trading costs, minimum deposit and other fees, it is above all the trading offer that is decisive. Traders should not only focus on the number of currency pairs available, but also include minors and exotics in their Forex trading broker comparison. However, a look at the rest of the trading offer can also be useful. The broker may also offer trading of stocks or crypto currencies.
If you have found the right broker for you, who convinces with his conditions and his trading offer, you can find out by means of further criteria like the support, the possibilities for market analysis and the additional offer, whether the provider really fits to you. Then the trader should not be afraid to take advantage of the offer of a test account in order to get to know the service and the trading platform of the respective broker better. With the demo account he can get an even better overview and finally decide whether he wants to work with the broker.
You should pay attention to the following criteria when comparing Forex.
1. trade offer
The trading offer of a Forex broker, especially the number of available currency pairs, is particularly interesting for a trader. Among the most popular currency pairs, the majors, are currencies that are traded against the US dollar. These are especially popular with trading beginners because they often have low trading fees and are also very liquid. On the other hand, experienced traders often trade more exotic currencies as well. When deciding for or against a particular provider, one should therefore not only look at the number of tradable currency pairs.
Other currencies and exotic currencies
The trading activity of minor and exotic currencies in the market is much lower. While they are not recommended for beginners, they can be a challenge even for experienced traders. The number of tradable minors can vary depending on the broker. Also, not every broker offers exotic currencies for trading. However, if you are looking for a provider with a broad range of products, you should explicitly make sure that minors and exotics are available in addition to major currencies.
For traders who do not necessarily want to commit themselves to one financial instrument, brokers who offer other trading options in addition to foreign exchange trading are also interesting, for example classic stock trading or CFD trading.
2. trading accounts
The trading account with a broker should be tailored to the needs of the user. This applies to the services as well as possible fees and minimum deposits. With many brokers, customers now have the choice between trading accounts for beginners, advanced traders or professionals or VIPs.
The accounts differ mainly in terms of deposits. However, the functions of the trading platforms and the support services may also vary. The trading volume can also determine the type of account, so traders can start with a beginner account and above a certain trading volume they can be classified into another account. In some cases, it is also possible for clients to opt for a higher level right at the beginning.
Tip: When comparing the providers, you should ask yourself above all what services you expect from the broker and what functions the trading account should have. You should find out whether the broker offers different types of accounts, what the individual accounts differ in and, if applicable, whether there are also offers for business customers.
Costs for opening and maintaining the account
Opening a trading account is free of charge with many brokers. However, some providers require a deposit sum in the four-digit range. The minimum deposit can therefore vary with Forex brokers. Normally, however, it is relatively low. Especially for traders who have no previous experience with currency trading or have a small budget, the minimum deposit can be decisive. Therefore, it is an important component in the Forex Broker comparison.
A broker comparison also offers traders the opportunity to compare the costs and fees of the individual brokers.
The so-called spreads provide information about the costs incurred. The major spreads are usually given in pips. In order to get a good overview of the costs, it is advisable to also look at the spreads of the minor currency pairs and exotics via a Forex broker spread comparison.
Fees for inactivity and deposits and withdrawals
The possible additional fees should also not be underestimated. With many brokers the trading account is usually free of charge. But many providers charge fees for inactivity over a certain period of time, for example.
Further costs can arise, for example, for add-ons for trading platforms, for real-time prices or for deposits and withdrawals (depending on the payment method or above a certain withdrawal amount).
In addition to the costs for trading and other fees, the leverage should also be considered in the context of a broker comparison. This allows the trader to move more capital than is available in his account. Some providers stagger the leverage according to the capital invested. Thus, high leverage is especially interesting for experienced traders. The leverage is, as mentioned before, certainly an interesting aspect in forex trading. However, depending on the individual requirements of a trader, it should not be the deciding factor.
4. trading platforms
The trading platform of a broker is the basis for every trading. A good platform is characterized by simple operation and a clear interface. Depending on the provider, it is often possible to use a broker’s own software solutions. However, most brokers mainly use existing platforms, such as the world-famous MetaTrader 4.
In the Forex Broker comparison, the following aspects should be considered in relation to the trading platforms:
- Selection of platforms (MetaTrader 4 and 5, in-house platform / download version, web-based version)
- Structure and operation of the trading platforms
- Functions and tools
Mobile trading via app for mobile devices such as smartphones and tablets
Some providers offer their customers a choice of different trading platforms. It is important to pay attention to the structure of a platform. It is advantageous if the interface can be individually adapted. When comparing trading platforms, the focus should be on trading systems and indicators. Indicators are important when creating strategies. The more assistance a trading platform offers, the better the trader can concentrate on the actual forex trading.
Mobile trading via Forex Trading App
Many traders today place value on flexible trading in order to be able to act at any time. Many brokers have adapted to the needs of traders and offer free Forex trading apps for smartphones and tablets.
5. Usability of the website
A good Forex broker should be characterized not least by an attractive and user-friendly website. After all, this is the virtual business card and provides the first and usually decisive impression. When comparing providers, traders should first convince themselves that the complete website can be called up in a language they understand. For this purpose, it may be necessary to set the appropriate language after calling up the page, as most brokers have an English-language web presence. For traders who are not so familiar with the English language, the translation of the site in their language should be easy to understand and above all complete.
Good menu navigation
Good menu navigation is also important. The navigation should be sensibly structured and guide the trader through the offer without any problems. The most important information, news and special offers should already be visible on the first page. The following information should be available on the website in any case:
- Information about the demo account and trading accounts
- General terms and conditions of business
- Offers for foreign exchange trading
- Clear presentation of costs and fees
- Contact details
FAQ section and general information about the Broker
Furthermore, an extensive FAQ area and information about the provider itself are helpful. These should also be available in your language so that you can find and understand the information you need.
6. Payment methods and conditions
When comparing the providers, a look at the possible payment methods should not be missing. As a rule, the trader must first capitalize his trading account before the start of trading and, if successful, be able to transfer the proceeds to his private bank account.
Many Forex brokers offer the following payment methods:
- Bank Transfer
- Credit cards
- Online payment services like Skrill
- Neteller or PayPal
The bank transfer as a classic payment method is considered to be particularly secure. However, order processing usually takes several days. A popular means of payment is still the credit card, because transactions can be made within a short time. Many providers now also offer their customers the possibility of deposits and withdrawals via online payment services such as PayPal, Neteller and Skrill. These payment options are very popular with users, as transactions can be carried out particularly quickly.
When choosing a broker, however, possible limits and fees have to be considered in this context. For example, a trader may only be able to withdraw money from a certain amount. Some brokers also only allow a certain number of payouts per month. All further payout requests are then subject to fees. It is also important to inform yourself about the ways in which a payout can be made. Most brokers only pay out money in the way it was previously deposited.
7. Customer support
Those who want to gain experience with forex trading are likely to ask themselves questions about the trading platform, deposit and withdrawal and trading first, but may not always find answers. This makes it all the more important when looking for a broker to also place value on the quality and contact possibilities of customer support. If there are any open questions, it should be easy to contact them.
Many brokers today provide a live chat. In addition, the providers can usually be reached via e-mail, contact form and a hotline. In any case, a trader should be able to contact a service employee free of charge.Of course, it is important for him to reach a staff member who speaks his language. But this is not a matter of course. Besides the conventional customer service, some brokers also offer a service for VIP customers. For example, depending on their status or account, they are even assigned a personal customer advisor.
Availability and competence
Not every broker offers its customers round-the-clock support. At the very least, however, the service staff should be available at the most important times. But the competence of the support is also crucial. A good Forex broker can only be convincing if his employees can answer the questions of the customers quickly and professionally. In the case of questions asked in writing, the broker’s customers should not have to wait longer than 24 hours for their answers.
8 .Security and regulation
Regulation and deposit insurance also play an important role in the Forex comparison, even if they are no guarantee that a provider will operate reputably. Fraud cannot be completely ruled out when trading with foreign exchange. However, traders can be sure that regulated brokers are allowed to offer their services officially. The supervisory authorities responsible for the brokers also regularly check the activity of the brokers. If you want to make sure that a broker is really regulated, you can check the website of the specified supervisory authority and thus check, among other things, possible stock exchange listings or licensing.
Traders should also inform themselves about the amount of deposit protection. This offers traders additional protection and secures the customers’ funds in the event of the broker’s insolvency up to a certain amount per customer. In addition to the statutory deposit insurance, some brokers are also voluntary members of a deposit insurance fund, through which customer deposits are additionally protected.
Even those who fear fraud when trading Forex can check some aspects of the transmitted data. For example, a trader should make sure that the data is transmitted encrypted. He himself can also help to secure data by choosing a good password.
9. Additional offers
Many Forex brokers provide their clients with additional services, which begins with training and education. A good broker convinces, for example, with a broadly based training offer for the users. But also experienced traders can benefit from offers such as seminars, webinars and video tutorials. Some providers also maintain their own blog and regularly publish helpful articles about trading and forex trading. Especially helpful are also offers such as tools for market analysis or an economic calendar.
Demo account for Forex trading
If you have no experience in foreign exchange trading, you should ideally look for a provider with a free demo account. Prospective traders are thus given the opportunity to get to know the broker’s trading platform and implement their first trades without having to use real money. Often it is even possible to open such a test account before opening a live account and then run it parallel to the real money account. It is of course advantageous if the demo account is available for an unlimited time. This gives the trader enough time to gain new Forex experience or to work on his trading strategy.
10. Awards and trade press
The Forex broker comparison should not least include information from the trade press about a broker. Less recommendable, however, are forums. Because positive mentions may have been made here for a fee. Negative evaluations could in turn be the result of personal misjudgements during trading. Above all, very well-known providers who have been active on the market for a long time or have received awards such as “Best Forex Broker” often appear in the trade press. Many Forex brokers link on their websites to articles from the press. This can be used by traders who want to find out more about a broker in order to get an overview of his past performance.
Titles and Awards
Even if a broker has already received numerous awards, it can be worthwhile to check in which areas he has received titles. They are important for a provider to gain the trust of customers. There are several magazines that test brokers and then give them awards and titles related to forex trading. Among other things, they take a closer look at the trading platforms, the trading offer, security and customer support. A variety of awards can therefore be a good reference point when it comes to assessing a broker. Since most providers are understandably proud of their awards, most of them are to be found on their websites.
The Forex market – a constantly evolving market
The foreign exchange market is one of the largest markets in the world, is considered very liquid and is subject to constant growth. The daily trading volume, which averages USD 5 trillion, is correspondingly large. Experts predict that the Forex market will continue to grow strongly. Therefore, it is hardly surprising that foreign exchange trading has been interesting for traders for many years. At the same time, the number of Forex brokers offering their services is also growing steadily.
For many traders, the opportunity to generate high returns within a short period of time is extremely attractive. The Forex trading itself is considered to be easy to understand. The trader predicts whether the prices of certain currency pairs will rise or fall and opens a trade on this basis. However, Forex trading should not be underestimated. Because there is always the fundamental risk of losing all the capital invested.
Forecast for the foreign exchange market
The increasing interest is beneficial for the Forex market. Besides the majors, more and more minors and exotics are coming to the fore. But crypto currencies are also gaining ground. The extensive trading possibilities on the broker platforms appeal equally to prospective traders and experienced traders. For this reason too, one can cautiously assume that the currency market will continue to develop positively in the future.
Conclusion: Use the Forex broker comparison to find the best provider
The search for a suitable Forex broker can sometimes be tedious, as they differ in many ways. It is easier and faster with our Forex Broker Comparison. To find out which provider best meets your requirements, you should weigh up the strengths and weaknesses of all providers against each other. In doing so, you should not limit yourself to comparing the conditions for trading, but also inform yourself about the trading platform, customer service and services, among other things. Think about what is most important to you personally and direct your focus specifically to these points. Of course, there is no such thing as the best Forex broker across the board. Our tip: Once you have decided on a provider, open a demo account with them to test the services and trading platforms at your leisure. If you are satisfied with all points and have prepared yourself well for forex trading, you can open a live account with the broker of your choice and start trading.