Great Forex Brokers.
This could be the shortest article of all time ! I get dozens of emails every week asking me for advice about forex brokers. Which ones do I recommend. Do I know anything about this broker or that broker etc. Its very difficult to comment sometimes because for every good review you read on line there is a bad one. Sometimes you have to read the reviews very carefully.
Dodgy Forex Broker Tactics
What is apparent to me is that there are dodgy brokers who play all sorts of dirty tricks. Lets face it you have to be very careful placing any money with them, because the way that forex works is that you are in effect betting against them.
As counter-parties to each forex trade in terms of pricing, market makers/forex brokers take the opposite side of your trade. In other words, whenever you sell, they must buy from you, and vice versa. So you get all sorts of horror stories; sudden spikes, failure to get filled at news times, stop hunting, of slippage (you try enter or especially exit a trade at say 1.6200 and your order gets filled at say 1.6215.
Forex Broker Tricks
- Because they may trade against you, market makers can present a clear conflict of interest in order execution.
- They may display worse bid/ask prices than what you could get from another market maker or ECN.
- It is possible for market makers to manipulate currency prices to run their customers’ stops or not let customers’ trades reach profit objectives.
- Market makers may also move their currency quotes 10-15 pips away from other market rates.
- A huge amount of slippage can occur when news is released. Market makers’ quote display and order placing systems may (& do) also “freeze” during times of high market volatility.
- Many market makers frown on scalping practices and have a tendency to put scalpers on “manual execution”, which means their orders may not get filled at the prices they want*
On the other hand many, many people lose a lot of money at forex. Money that they really can’t afford to lose. In a traumatic time of their lives they take out their anger and frustration on the one who has “taken” their money, the broker. So how do you find a good reliable Forex Broker ?
How to Find a Good Fx Broker
- The best thing is obviously personal recommendation
- Look for reviews on the internet
- Be wary of Companies with registered offices and addresses in strange exotic out of the way places.
- If its a USA broker or UK look for NFA/FSA accreditation. Most central European countries also have strict financial rules. Any where else make sure that they have some kind of government bond
- Talk to them.
- Maybe try a smaller micro or mini account first before moving all your account to them
I have been using Alpari UK to practise some new systems on a micro account for the last 9 months and I have to say that they have been very good so far. They keep reducing the spreads. I have had very few problems with slipping/spiking and other trickery as mentioned above. Do I recommend them? Yes. They are also bonded with the British Government so your money is protected in the event that they were to fold. You have the option of various trading platforms including metatrader4.
But the best way is to avoid the middle men altogether!
Alpari UK have recently reduced their spreads and at the moment they are moving towards being an ECN- which in the future all brokers will probably need to be. An ECN – Electronic Communications Network- in effect it means that they are an an Inter-bank intermediary. They make their income from a small fixed commission NOT from your losing. At the moment ECN’s are only available on larger accounts, but as I said the spreads are low and they do not cheat in my experience.
Update: As of October 2009 Alpari UK have announced their new ECN account for those with over $20.000 to deposit. They have also further reduced their spreads on the normal, mini & micro accounts.
Their current special offer is they pay Interest at 28.6% p.a. on free margin in your live Micro or Classic account (including credit bonus at a rate of 6.25%)*
Alpari also have a really good “academy area where you can learn all there is to know about trading forex via metatrader. If you would like a free demo account or to see their training section click here: http://www.alpari.co.uk/
If you are interested in opening a live account then Click here : There are always “special offers.” Yes I get a commission that helps pay for the upkeep of the blog. There are other brokers who pay higher commissions, but I only ever recommend companies that I have had personal experience with or that have been recommended by others whose opinion I trust.
If you have any queries simply email me here: admin@forex-fxtrader.com
One draw back with Alpari Uk is that they can not take clients from the USA or Canada. There is an Alpari USA broker, but I have heard mixed and poor reviews for them. Quite a few of my USA followers tell me that Tradeview are very good. They are NFA registered. Their spreads are not always the best, BUT their customer service has been described to me as outstanding. You have a dedicated representative, so if you ring up for any reason or query, you get the same person. Saves talking to someone new every time and especially means you are not hanging around for hours whilst a call centre bounce you round the room. I also did some research on forex peacearmy where they have a 4 star rating. They currently have a $500 bonus for new account openers*
My main account is with Dukascopy. They are also an ECN. They are a swiss registered ECN/interbank intermediary and are simply awesome to trade with. Unfortunately you normally need to have a minimum $50.000 to open an account with them.
However there was a big new forex promotion recently & and they have lowered their account entry level substantially for the near future.
Spreads are some of the smallest in the industry, I have seen euro/$ as low as 0.5 pips. Orders get filled 99% of the time at or very near the price you wanted. They offer awesome spreads,and have a liquidity second to none. One of the best parts for me is that you get level ll information.
Probably the most prominent feature that blew me away when I first started trading with Dukascopy was the Level II market depth screen! You could see quantities (in $millions) of orders that are sat there waiting to be filled (limit entry orders). Those of you who trade without level II are really flying blind. You have no idea where market sentiment lies.
For example today as I write this the gbp has returned from its plunge from earlier in the week and has returned to 1.6200. With level II I can see all the forward buy & sell orders that have been placed, therefore I have a much clearer picture of where price is going next.
So if Dukascopy are so great why don’t we all have an account ?
The problem with Dukascopy is that the minimum account size is $50.000 ! Aw shucks! You knew there was going to be a catch.
However, combined with a promotion they are doing at the moment, they will allow retail clients with “only” $10.000. If you are a serious forex trader and have that kind of money to trade forex with this truly is the best way I have found. If you are not sure about committing this kind of money to your forex account, there is a further offer at the moment where you can download their trading platform for 14 days and try it.
As a result they are likely to be swamped with new account applications and your application will be delayed. This is the only real downside i have encountered with Dukas. It takes a while to get all your paperwork sorted and the account opened due to extremely strict Swiss banking/money laundering rules. It took over three weeks when I joined & I know people who have had to wait months.
The other negative is that their trading platform is poor, but you can now link metatrader to them, or simply do as I have always done. I do my analysis on metatrader but then place the trades on Dukas. Hopes this helps. If you have any queries just email me, regards, marc
* Broker offers change all the time, so you need to check the current offers. They are also subject to terms & conditions
Thanks for the suggestion, DUKAS looks good. It appears at first read, however, that the minimum lot is 1 standard? If this is so, then I wll certainly aspire towards using them, but for now, I m still in forex nappies and chewing on a teething ring. I appreciate the recommendation for there are an awful lot of wolves in broker’s clothing out there!
You can also get some money or other bonus when opening live account.
Look for Introducing brokers. These are brokers that advertise forex brokers and get paid for every person recruited. They often share some of their commission with you upon account opening.
But, as always, the introducing brokers cannot ensure quality. They often advertise couple of brokers and simply don’t care about their practices. Especially they take no any responsibility. They are just brokers to brokers…
Couldn’t agree more with Marc. ECN is the only way to go. I have an account with MB Trading who offer ALL of the advantages mentioned by Marc above. Minimum initial deposit is $400. They are also very easy and quick to open a new account (even considering I’m from New Zealand and they are US based).
With an ECN spread does not matter – I can buy and sell at the Bid or buy and sell at the Ask – you choose. You don’t pay the spread!
I use a separate MT4 demo account for charting and just execute my trades on the MB Trading Navigator platform. However, MBT are close to releasing their ECN version of MT4 very soon.
Hi steve. Thanks for that, I didnt realise that you could trade with an ecn for a small amount of money. Something for the smaller traders to look at for sure. I wish they had ecn’s for small accounts when I 1st started, took me ages to grow my account big enough to get into dukascopy, marc
How do they deal with trade deposit? Can you free it by moving to breakeven?
I use two brokers. One of them i MT4 based, has low spreads, (2 pips on EURUSD) and in general it’s fine with the exception it doesn’t allow microlots. The other one has many disadvantages:
- not MT4 broker,
- high spreads on microlot – 5 pips minimum,
- 20 pips minimal Stop Loss size,
- 35 pips initial Stop Loss size,
- limit orders cannot be placed closer than 35 pips to the Bid.
And guess which one I trade? The one with hight spreads. Why?
Because he has one BIG ADVANTAGE: your deposit can be freed immediately when on profit side. He takes only the initial 35 pips. Once you can move to breakeven you free all of your money. You can use it on another trade immediately. This was the key to my 869 pips day success on small profit trades (even with this I run out of equity at some point).
The first broker takes 1% lot size and keeps it till you close the trade.
I could never do the 800+ pips there. 300-400 at most.
And the last but not least – on micro account I could start as low as $12.5. However I would recommend at least $200. And micolots give me a lot of flexibility. I can easily scale up and down.
Forgot one very important thing: the broker I trade has “price freeze”. It means when you place a trade, your can freeze the price for a second or two. The enter price is either the one you see on your screen, either better if possible. Never worse. On micro account!
He also have some kind of market orders overview – you can see how many traders are short and long on a pair and average entry/limit, SL and TP. It’s not the Level II but gives some kind of sentiment measure.
i alex, so what is the broker with such distinctive features, please? thanks, sandra
Hi all,
I would like to ask all if you have a formula or spreadsheet to calculate your margin before you open a trade . It always happen to open bigger or smaller
positions because we deal with different pairs.I appreciate your help.
Hi Aris, I calculate at the beginning of the week and write them down. so if my account balance is $2000 i will have the calculation for each pair @ 20/30/40 etc pips stop. couple of cool tools here: http://www.mataf.net/en/tools/risk-management-position-sizing & http://www.forexcalc.com/
Hi ARIS,
you can have a spreadsheet connected to the MT4 DDE server. It will calculate whatever formula you put in realtime. There is a sample excel sheet in the MT4 directory. More info: http://docs.mql4.com/index
How’s everybody doing?
I’ve got my real account with the canadian ECN Investtechfx… its got great spreads on the main parities, I mean every parity involving the USD (just 1 pip). If you open a micro account (less than USD1000) you’ll get a 2 pips-spread on those main parities. Here you can start your real account from USD100. It is also supervised by the “canadian SEC” (dont know how it is called), giving a sort of peacefulness regarding to your money. Of course its an MT4 broker.
But, what’s not very right with it, is that for every trade you make you’ll have to use the modification option to add the SL and the TP. You’re not able to fix them from the beginning of the trade. It’s not such a bad thing for me since I’m using the LMT: trying to catch long term trades and a big bunch of pips. I can live with it: just place the position and immediatly getting to add the limits. I think you’ll have to get use to it first; you can get a free demo account too. Myself, i like it big time…
MARC: if I may ask, what platform are you using at Dukas and at Dukas with the fapturbo evol, if different than what you use with your ususal ( non lmt) system?
thanks
Hi, I am new to forex. I do have a micro account with a particular broker. I am looking for a very very good broker/intermediary where I can start trading with a min account of $100.
Thanks for the data. Have you had any experience with MB trading and ACM? Thanks
I agree with you. To know a good forex trading broker, someone have to read review or testimony from other trader. We can compare their experince and then we decide to choose one of them that we consider is the good.
Your article is very interesting. Though rather simple, but it is very rich information. Which identifies important criteria for good forex trading broker. With a good broker, you do not have to worry about the money you invest.
Your article is very interesting. Though rather simple, but it is very rich information. Which identifies important criteria for good forex trading broker. With a good broker, you do not have to worry about the money you invest.
What you said here was true enough. I myself currently using 3 different brokers for my trading activities. Each one of them has their own plus minus when compare to each other. For the ECN's broker I use http://www.Dukascopy.com and http://www.MBTrading.com while another broker of my choosing is http://www.IKOFX.com
They all have their own positiveness in dealing with their own clients. I just don't think that they will cheat anyone because of their natural of business is to build relationship with prospective clients.