Forex brokers are financial companies that provide access to the Foreign exchange market by linking retail and institutional capital and the network of banks that offer liquidity.
How to Choose a Forex Broker?
These are the key issues to keep in mind when choosing Forex brokers:
ENSURING THE SAFETY OF FUNDS
- Is the Forex broker regulated by a trustable authority such as FCA UK, ASIC, or CySEC?
- Is the Forex broker headquartered in a safe country?
- Does the Forex broker operate for more than 3 years in the market?
FUNDING METHODS, TRADING PLATFORMS, AND ASSET INDEX
- Are the available funding methods suitable to your needs (internet wallets, debit cards, etc.)?
- Are the available platforms and asset indexes suitable to your needs (Forex pairs, Metals, Indices, Crypto, etc.)?
BE AWARE OF THE TRADING COST
- What is the spread on liquid Forex assets such as EURUSD and GBSUD?
- What are the trading commissions (if any)?
- What are the overnight rates on the Forex pairs you will likely trade?
- Are there any withdrawal fees and/or maintenance (inactive) fees?
Table: Compare Forex brokers and their trading terms
| BROKER | TRADING | COMPANY | ACCOUNTS | MORE INFO |
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European Traders can open an account with IC Trading: |
US Residents: No
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Online Since 2007 Client Bank Account Segregation: YES |
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Not for European Traders: » REVIEW Note that European Traders are allowed by IC Trading:
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US Residents: No
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Online Since 2009 Client Bank Account Segregation: YES |
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» LQDFX
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US Residents: No
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Online Since 2015 Client Bank Account Segregation: YES |
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US Residents: No
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Founded in 2010 Client Bank Account Segregation: YES |
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Categories of trading fees when using the services of a Forex broker
Trading Spreads & Commissions
Some brokers charge only spreads, while others charge spreads and trading commissions. There are also zero-spread accounts that charge only commissions.
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The spread is the difference between the ask and bid and it is measured in pips
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A pip means Percentage In Points and represents the 1/100th of 1%. For example, when the EUR/USD Ask/Bid is 1.1700/1.1701, then the difference is 1 pip (0.0001)
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Trading commissions are based on your volume and should be measured on a full-round lot basis. Usually, Forex brokers charge between $6 and $10 per full traded standard lot ($100,000)
SWAP Charges for Maintaining Positions Overnight
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Positions kept overnight, become subject to overnight (SWAP) rates. This can be positive or negative for your account's balance.
Other Fees
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Deposit/Withdrawal Fees
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Maintenance/Inactive fess.
■ Selecting a Forex Broker
CurrenciesFx.com (c)
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□ INFORMATION
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» Selecting a Forex Broker
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» LQDFX