What do you look for in a broker | How do you decide?

Broker Discussion
#1

Hi guys,

That’s going to be quite a naive question, but I’m wondering what your reasons are for choosing one broker over another.

How would you decide which broker is for you? What are the key points you’re checking first? How much influence does the website have on your decision? I’ve noticed that a couple are quite horrendously designed.

As a forex trader I doubt you let your gut-feeling decide :wink:

Sorry again for such a basic question, but I’m just curious.

Thanks!

Edit: In my original post I included a link to an overview of brokers. I had no idea that would violate against the policy. Apologies for that.

#2

This page in the school might be helpful to you: 6 Crucial Things to Consider When Choosing a Forex Broker

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#3

Choosing broker is crucial part in forex business because it already about money, and will making regret if choosing wrong broker, but sometime in forex world we only trying to looking good broker with ask question on forum and reading experience from fellow trader, and main point investing money in forex is only spent money that afford to lose

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#4

While the particular broker may not be relevant to you, this should give you an idea of how I trial a broker before committing my trading funds.

#5

First - always start with the platform of choice and features/add-ons/EAs that you’ll be using.
This should narrow down the number of brokerage agencies a bit.
Once that’s clear - time to look at the broker.

  1. Regulated - Must be regulated with at least one big regulator.
    • Always check with the regulator if that broker is indeed regulated or is just registered.
  2. Spreads, fees and commissions (contract specifications) - depending on the type of trading strategy this (spreads) might not be a factor for some.
  3. Account specifications - types of accounts, how to fund it, minimum amounts for funding and withdrawals and time frames required for the transactions to go through. Also, the different ways you can fund and withdraw are important (bank transfer, card payments, payment providers like Skrill, for example)
  4. Order execution - DMA/STP is essential but these days every broker will claim that and it’s a bit tricky to pin down until you’ve actually started a live account. One thing that you can do to determine if the broker is a genuine DMA/STP provider is to ask for a post trade report (also called post trade transparency report) - if they can provide you with such a report you can then see for yourself if the execution times are delayed at any point of the process.
    Again, it’s almost impossible to verify this point without a funded live trading account!
  5. No Dealing Desk - The market is hard enough to navigate without having to trade against your broker. This one is kind of explained in the point above.
  6. Negative balance protection - self explanatory
  7. Online reviews and community feedback for the broker - want to take some time to research what your friends, colleagues and the internet in general and trading communities have to say about this particular broker.
  8. The broker has been operating for at least 5 years.
  9. Is Automated/Algorithmic and High Frequency Trading (HFT) allowed - if not this could be a signal for internal issues and system/platform problems within the broker’s structure and potential trading and security vulnerabilities. If a broker’s systems can’t handle a high volume of trades that means his servers and systems are not good enough and thus may become an issue for all traders using his services.
    10 Last but not least - Support response speed and knowledgeability. - You want a broker who has the support desk that will get involved with your issues and requests as fast as possible.
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#6

Thank you so much for this list. Super helpful! :smiley:

1 Like
#7

Hi, really very informative answer, thank you.

#8

Great contribution here. I also think it is wise to choose a broker that has been around for a long time. Then find their digital footstep to see if at one time they have treated clients badly. The reviews don’t lie. Regulated or not, a broker can decide to go rogue. I’ve known Tenkofx for up to 5 years, even though I recently started using this broker, they have been outstanding.

#9

I chose brokers based on my trading method. For instance, I’m a scalper, and I prefer trading with FP Markers because, as a scalper, I need a broker that provides fast execution and stable spreads even when my currency pair is highly volatile.

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#10

Agreed here. While being financially secure and regulated is important, we can’t ignore the equal importance of the trading environment, instruments, and assistance the broker offers, regulated or not. Period!

#11

I’ve always been trading with non regulated brokers for obvious reasons, and I’ve never actually faced any problem with the platform, price modulation, and problem in the transaction. In short- no cause of worry.

#12

I’ve been trading with turnkey forex and that’s non-regulated. So far I’ve had no problem with the platform navigation, trading tools and instruments offered. In fact I really like its easy to understand charts, minimum deposit option, tight spread and high leverage. Almost everything that a regulated broker like fxpro offers. In fact offshores are better on the tax front as well.