How to Find the Best CFD & Forex Brokers in 2023
Are you looking for CFD or Forex brokers but are unsure as to what details you should be looking out for? Whether you are a beginner or an experienced trader, we will go over everything you need to know in order to choose the best forex broker for you. From the types of accounts, the instruments available, and even some of the warning signs you need to look out for to avoid scams.
Table of Contents
- What is a Broker?
- The Primary Criteria for Choosing Forex Brokers
- What Is the Broker's Range of Instruments?
- Spreads, Commissions, and Leverage: the Cost of Trading
- The Broker's Trading Platform
- Regulated Brokers: How to Find an FCA Regulated Broker
- Forex Customer Service: What Can You Expect in Terms of Customer Support?
- Beware of Scams, False Information, and Privacy Violation
- Why Choose Admirals?
What is a Broker?
To begin trading foreign exchange currency, you need to first find a reliable Forex broker. A broker is a company that provides traders with access to a trading platform that enables them to buy and sell foreign currencies. Brokers provide these platforms to allow clients access to trade on the 24-hour forex market. They are mainly compensated through the 'bid-ask spread' of a currency pair.
Your first priority is to carry out research so you can make an informed decision as to which broker to trade with. Read online reviews and ratings to ensure they have a positive reputation. You also need to clarify whether they are able to meet your trading requirements.
The vast majority of forex brokers will permit prospective clients to test their services with a practice or demo trading account, so that traders can obtain a good understanding of what the system is actually like. It would be wise to test out many trading platforms prior to deciding which broker to use, to see which is the best for you.
The Primary Criteria for Choosing Forex Brokers
Here is a list of twelve important points to consider in order to compare Forex brokers:
- Range of Trading Instruments – It is beneficial to be able to invest in several financial markets at the same time. A good choice is to work with a broker that offers a wide variety of markets to trade on, such as CFDs on indices or commodities and cryptocurrencies, stocks, or ETFs.
- Different Types of Trading Accounts – A good broker should offer you several types of accounts with different benefits for specific styles of trading, such as those with higher protections, or greater leverage or spreads, or different ranges of instruments.
- Spreads – There's nothing wrong about searching for a broker with the lowest spreads, but watch out for marketing techniques. A lower spread advertised on the website does not necessarily mean that you will continuously have the spread.
Looking for a competitive broker by focusing on offerings of low spreads is not necessarily the best idea, as a displayed average spread does not guarantee that it applies to your specific type of order.
- Optional Leverage – Forex is a market that is often traded with leverage. To manage a trading position and account, being aware of your leverage allowance is very important.
- Order Execution Quality and Slippage – Having low spreads is a good start, but having orders executed at the asking price is an even more useful offer.
- Allows for Scalping – If you are looking for high-frequency day trading, make sure there are no limits on trading styles. A scalping broker has no minimum period of time to wait between the market price, the stop-loss, and the take-profit.
- Trading Platform – A trading platform that you are comfortable with and that fits your individual needs is essential. For example, Admirals offers several options including MetaTrader 4 (MT4), MetaTrader 5 (MT5), MetaTrader WebTrader, and the MetaTrader Supreme Edition plugin for MT4 and MT5.
- Custom Tools and add-ons - Good brokers should offer valuable support for their traders. For instance, Admirals created both the MT4 and MT5 Supreme Edition add-ons and made them available for its live Forex and CFD trading account, and its demo trading account. These tools aim to help Forex and CFD traders make more money, with less effort.
- Forex Broker Regulation – It is important to open an account with a regulated broker.
- Fund Security – Choose a Forex broker with bank accounts in Europe, in particular, with diversified bank accounts.
- Customer Service – Having a FX broker that is dedicated to its customers is much more practical and reliable for traders.
- Education – Forex brokers offer training sessions and education. If you are a beginner in trading, it is essential to understand the trading terminology, so a broker with proper training tools is always a better choice. Admirals offers several courses, including Forex 101, Zero to Hero, and a whole library of articles on Forex, trading CFDs, and trading in general.
At Admirals you can practice trading without risking your own capital on a FREE demo account! Click the banner below to open your demo account today:
What Is the Broker's Range of Instruments?
While there is a vast number of currencies accessible for trading, only a few receive a lot of attention, and attract the most traders and the highest profitable volatility. The major currency pairs include USD/JPY, EUR/USD, USD/CHF, and also GBP/USD. Forex brokers offer a wide choice of forex pairs, and you can choose from the most active, to more exotic pairs given your trading strategy.
Admirals offers over 8,000 different instruments from a wide range of markets, for example. There's a huge number of CFD trading instruments from forex, commodities, indices and more, as well as the ability to directly purchase and own stocks and ETFs.
Spreads, Commissions, and Leverage: the Cost of Trading
Every forex broker has a variety of account offerings (or account types) which offer different spread and leverage offerings. Let's discuss leverage and margin. In Europe, Forex traders have access to a range of leverage amounts depending on the type of the account, up to 1:30 for retail clients and up to 1:500 for professional clients. Leverage is a loan extended to margin account holders by their brokers.
For example, by applying 1:50 leverage, a forex trader with an account size of $1,000 can hold a position that is valued at $50,000. Leverage works in the trader's favour with winning positions, as the potential for profits is considerably amplified. However, leverage is capable of hastily destroying a trader's account, because the potential for losses is just as equally increased. Keep in mind that leverage should only be used with the upmost caution.
Secondly, the other main significant offerings which affect your trading positions are spreads and commissions. A forex broker makes money through their stated commissions and spreads.
A broker that uses commissions may charge a percentage of a position's size (having said that, this is more common with instruments like shares and share CFDs than Forex pairs).
Nonetheless, a lot of FX brokers advertise that they don't charge commissions, and instead make their money with spreads, which are the difference between the bid and ask price of a currency pair. The wider the spread, the higher the charge (and the lower your potential profits). For instance, the spread could be a fixed spread of three pips, or the spread could be variable depending on market volatility.
Imagine that a EUR/USD quote of 1.3943 - 1.3946 has a three pip spread. This implies that once a market participant purchases at 1.3946, the position has already lost three pips of value, as it could solely be sold instantly for 1.3943. Therefore, the wider the spread, the more complicated it can be to make a profit. In fact, common trading pairs like the GBP/USD and EUR/USD will generally have tighter spreads than the more thinly-traded pairs.
A third cost is the initial deposit that an online Forex broker may offer. The majority of Forex accounts can be funded with a very limited initial deposit (even being as low as $50). Of course, with leverage purchasing power it can be considerably greater than the minimum deposit. That is one of many reasons why Forex trading is so appealing to new traders and investors. Many brokers offer standard, mini, and micro-accounts with changes in initial deposit requirements.
And the last cost is the ease of deposits and withdrawals. Every FX broker has their own account withdrawal, as well as funding policies. Brokers may permit account holders to fund trading accounts online via PayPal, simply with a credit card, or via ACH payment, not to mention wire transfer, bank cheques, or either business or personal cheques if specified. Usually, withdrawals can be made by cheque or by wire transfer. Brokers may, or may not, charge a fee for each service.
The Broker's Trading Platform
The trading platform is the investor's portal to the market. As such, forex traders should make sure that the trading platform, and any kind of trading software, is simple to use and visually attractive. It also should have a range of technical analysis and fundamental analysis tools, and it should be easy to enter and exit trades without additional effort.
This point is crucial when considering how to choose a Forex broker worthy of your attention: a well-designed Forex trading platform will have simple 'buy' and 'sell' buttons - and some even have an emergency button that closes all of the open positions. A poorly designed user interface could lead to costly order entry mistakes, such as accidentally adding to a position rather than closing it, or going short when you meant to go long.
These discrepancies and mistakes can make your trading process unprofitable and emotionally draining. Be sure to choose a reliable one such as MetaTrader 4, as it is the most popular choice amongst the best Forex brokers. Other considerations to include are: the ability to customise, order entry types, automated trading options, backtesting, strategy builders, and also trading alerts. Most brokers offer free demo trading accounts so that Forex traders can try out the trading platform without any risk, before they move to live market trading.
The MT4/MT5 Supreme Edition Overview (MT4/MT5 SE)
Admirals' Supreme Edition plugin is a first-class add-on package that offers dozens of unique tools to empower trading decisions. No matter if you are an experienced trader or a beginner trader, SE is an invaluable tool for helping you make informed trading decisions. Here is the list of exclusive indicators available in the MT4/MT5 SE package:
Source: MetaTrader 4 Supreme Edition Add-on
It's interesting to note that MT4/MT5 SE is client-driven, as Admirals' clients have also helped to develop the tool. For example, the 'Correlation Matrix' is a tool that is unique to Admirals traders, developing data from its clients. The Correlation Matrix provides invaluable and in-depth market information across all currency pairs in different time-frames.
This will enable you to make informed decisions that significantly mitigate the risk involved when planning your trading. (Additionally, it is recommended that all traders implement risk management strategies within their trading, to ensure that they are managing the risks effectively.)
The Supreme Edition is not just a simple trading solution. It offers more complex tools such as the Admiral Renko indicator, that also offers extensive customisation of the standard Renko indicator.
For instance, with the Admirals Renko indicator you can modify:
- Renko block size in pips – sets the size of the Renko blocks
- Symbol pip size – sets the pip size of the instrument
- Colour for up and down blocks – customises the colour of the Renko blocks
- Draw blocks as continuous – adjusts whether the blocks are continuous or not
- Target lines for next blocks – changes the style of the indicator lines
- Draw on top of the chart – decides whether Renko blocks appear in the foreground or the background
- Alerts on new blocks – sets up alerts for when new blocks are being drawn
- Round the starting price – decides whether the starting price should be rounded
- Maximum historic blocks – sets the number of blocks displayed at one time
- Build Renko data from history period – decides the time-frame over which the Renko indicator is calculated
- CSV/TSV log – decides whether to keep a log file by inputting a file name and choosing a format.
For a brief overview of what the Supreme Edition plugin has to offer, why not read more with our guide: MT5 Supreme Edition Indicator Package
MetaTrader Supreme Edition - Admirals
Do you want to now take advantage of the Supreme Edition? Now you can trade with MetaTrader 4 and MetaTrader 5 with an advanced version of MetaTrader that offers excellent additional features such as the correlation matrix, which enables you to view and contrast various currency pairs in real-time, or the mini trader widget - which allows you to buy or sell via a small window while you continue with everything else you need to do.
Download it for FREE today by clicking the banner below!
Regulated Brokers: How to Find an FCA Regulated Broker
You should look for brokers who are authorised and regulated by the Financial Conduct Authority (FCA). Today, there are many scams on CFD trading websites, and very often these sites have regulations that are not very rigorous, or they are not regulated at all. For instance, with the European passport, any financial company registered in one of the countries within the European Union has the right to offer brokerage services in other countries without the need for additional agreements.
The FCA is one of the strongest European authorities in regulation, and every broker under their compliance has that certification displayed at the forefront of their website.
If you are looking for the best Forex brokers online, a professional-looking website does not guarantee that the broker is a trusted one. A major advantage of a UK broker is the Financial Services Compensation Scheme (FSCS), a system that guarantees its customers' funds up to the amount of 50,000 GBP, should the broker go bankrupt. The FSCS is the last resort compensation fund. They also protect banks, building societies, credit unions, etc. That's why having the best UK forex broker should be your first choice when you decide to trade.
How Important is Regulatory Compliance for Brokers?
If a broker is regulated, they will state this on their website, along with the license number they hold with that regulator. This more detailed type of information will most commonly be found in the 'about us' section, as well as in the website footer. Note that there are different regulatory bodies in different regions, so a good rule of thumb is to ensure that the FX broker you are considering is authorised and regulated by the regulator in their regions of operation.
For instance, in the UK a reputable FX broker will be officially authorised and regulated by the Financial Conduct Authority (FCA). Additionally, brokers in the EU should act according to the guidelines of ESMA - the European Securities and Markets Authority. In Australia, the key regulator is the Australian Securities and Investments Commission.
Owing to potential concerns regarding the safety of particular deposits and the integrity of the broker, all accounts should only be opened with companies that are properly regulated.
Forex Customer Service: What Can You Expect in Terms of Customer Support?
Forex trading involves the movement of a lot of currency in a short period of time, so a local broker's customer support must be available at short notice. It should also be easy to actually speak to an actual person, rather than just a time consuming and frequently frustrating auto-attendant.
When considering which is the best forex broker, a quick call can give you an idea of the kind of customer service that they provide, the wait times, and also the representative's capability to answer questions about spreads, regulations, leverage, and company details in a concise manner. At Admirals, for instance, we have some customer support representatives with over 16 years of trading experience who know the trading platform, and the markets, inside out.
Other details to consider include how long they have been an FX broker and the actual size of the broker's trade volume. As you well know, larger brokers mainly have access to better execution and prices.
Admirals is a global company with customer support available at over 20 local offices and languages across the world. Support is available during trading hours and more, through phone, email, and live chat with a knowledgeable person ready to answer all your questions.
Beware of Scams, False Information, and Privacy Violation
Unfortunately, many people incorrectly associate forex trading with scams. The problem is that there is an increasing number of unscrupulous companies marketing false information. The number of Forex-related scams has significantly increased over the last few years, so it's important for you to be able to identify a hoax. After all, Forex trading should be a potentially profitable experience.
When traders register with a particular broker, they should expect their personal data to be protected, (i.e. not passed to third parties). When someone you don't know contacts you via your personal phone number, for example, the entity that gave your information to them has violated your privacy. Why? Because you haven't allowed your data to be publicly available. Some brokers even buy stolen trader databases, so they can contact the listed people worldwide.
Why Choose Admirals?
When it comes to online trading, deciding who is the best broker will ultimately come down to you.
Admirals offers over 8,000 unique instruments to trade, with industry-leading offers in spreads, low commission, as well as negative balance protection in order to give clients the best possible experience and chances for success. Over 100,000 traders have chosen Admirals as their broker, and it's thanks to their continued faith in the product and offering that Admirals has been given numerous awards.
Admirals has won awards in several categories:
- Best Sell-Side Analysis 2018 by FXstreet.com
- Best Video Podcast 2017 by FXstreet.com
- Best Forex Broker 2018 and CFD Broker 2018 in Germany
- "Best Service" CFD Broker 2017 by the German Institute of Customers (DKI)
- Best Forex Educator 2016 by UK Forex Awards
- FxCuffs competition 2015 and 2016
Admirals UK Ltd. is a regulated broker, and you can read reviews of the services provided on the FPA website.
Admirals also offers extensive educational resources, such as free webinars where you can learn to trade from the experts, successful professional traders discussing market movements and the fundamentals of trading. As well as an extensive library of educational articles for you to learn every detail, strategy, and fact about the industry and market.
If you have confidence in your Forex broker, you will be capable of devoting considerably more time and precious attention to analysis and developing various FX strategies. Research prior to committing to a specific broker can go a long way, and can improve a trader's odds of being successful in the competitive foreign exchange market.
Forex Trading With Admirals
If you're ready to apply all this knowledge and take your trading to the next level, the Admirals live account is the perfect place for you to do that! Trade Forex & CFDs on 80+ currencies, choosing from a range of Forex majors, Forex minors, and exotic currency pairs, with access to the latest technical analysis and trading information. Trade the right way, open your live account now by clicking the banner below!
Admirals is a multi-award winning, globally regulated Forex and CFD broker, offering trading on over 8,000 financial instruments via the world's most popular trading platforms: MetaTrader 4 and MetaTrader 5. Start trading today!
This material does not contain and should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments. Please note that such trading analysis is not a reliable indicator for any current or future performance, as circumstances may change over time. Before making any investment decisions, you should seek advice from independent financial advisors to ensure you understand the risks.