If you plan to trade on the foreign exchange market, you must know the best-regulated forex brokers.
The purpose of our article is to help you sift through the many forex trading platforms available. After reading our article, you will find it easier to select a broker suitable for you.
But, before we get into any of that, let’s take care of a few housekeeping matters.
Where to conduct forex trade
Many different brokers are available to conduct forex trade. They are the middlemen standing between traders and the market.
You cannot conduct trade on the foreign exchange market without a broker.
Why is that?
That’s because trading calls for proper licensing and capital.
The good news is that technology makes starting an account to trade very easy. Most forex platforms take ten minutes or less. But, before you decide to sign up with any forex broker, you should know the characteristics that make them good at their job. Ensure that you open your trading account with a reputable company. Our list below should help you weed out the bad ones.
What are the characteristics you should look for in a forex broker
- Free dummy account
- User-friendly interface
- Affordable trading fees
- Good customer agent support. The best offer this in different languages.
- Quick-paced order execution
Now let’s talk about what we came here for – regulated forex brokers.
Is World Forex regulated?
WorldForex is a regulated entity with fourteen years of experience in the foreign exchange market. It is a registered member with The Financial Commission. The Financial Commission is an international body that ensures fair dealings between members (the brokers) and their clients (the traders).
What does this mean?
Participants in The Financial Commission have protection through something called a Compensation Fund. Traders who use WorldForex as a broker have the financial security of up to 20,000€ for each complaint. That means trading with WorldForex is a safe bet. Still, you want to be sure it meets all the criteria you want in a broker. Consider the fees and the minimum investment total.
The company’s website offers much detail on its operations, including tutorials for beginners.
What does it mean to be a regulated broker?
Being new to forex trade can be a bit overwhelming. You may not have realized just how many brokers there are available at your fingertips. Your search will turn up quite a few hundred. The sheer size of the market can throw you for a loop. Some of these brokerages are regulated, and others are not. Having so many options does not make choosing a broker that meets your needs easy. Should you pick a regulated broker or go with the riskier unregulated option?
What’s the difference?
Regulated brokers are registered entities in their country. They follow the rules set by the financial regulatory governing body of the land.
Unregulated forex trading follows no such rules. These entities pretty much behave any way they want to and answer to no one.
Being regulated gives credibility to these brokers. Even so, people who are new to the foreign exchange market should still be careful. These brokerages may be registered locally. But they may choose to operate without regulation in their offshore dealings. Doing so helps them lower operational costs.
What does this mean for the trader?
You may not be entitled to any compensation.
Either way, there may be advantages and disadvantages no matter with which forex broker you place your investment.
For now, we want to explore the best forex brokers in 2021. Later we will answer some of the more common questions associated with forex brokerages.
How do I know if my forex broker is regulated
One of the first things to consider when picking a Forex broker is the broker’s regulation status. Are they regulated or unregulated?
But, it is not typical for unregulated brokers to advertise their unregulated status. Doing so would likely turn potential clients away.
The most considerable risk of using unregulated brokerages is that traders have almost no way to recover losses. As a result, most traders prefer to work with regulated Forex brokers.
Beware, faking regulation is not that hard. It is easy for an unregulated broker to get their hands on a forged license and other documentation. It is also easy to post information about the regulatory agency in their country on their website even if they have no affiliation.
It is the responsibility of the trader to research Forex brokers before investing in one.
There are a few telling signs that will help you know if a forex broker is regulated or not. Forex brokers are usually only licensed in one country when they start operating.
Obtaining regulatory permission is not often easy. There are places where regulations are more rigid. New brokerages usually start by registering in one country. Then they will apply for regulatory licenses in additional countries they want to operate.
Suppose Forex brokers want to actively market their services in offshore regions without a physical presence. In that case, it is usually easier for them to gain some form of regulatory accreditation.
There is one fail-proof way of finding out which Forex brokers are regulated and which are not. Contact the body responsible for financial regulation in your country. You can search their website for the name of your Forex broker.
A regulated Forex broker will have the name of their regulator displayed on the firm’s website. If you do not see this, the website should supply a location for the brokerage’s headquarters. This information will verify the regulated status of the brokerage in that country. If you do not see this information on the forex broker’s website, there is a high chance it is not a regulated body.
Which broker is the best for forex?
As we mentioned before, there are several credible brokers that you can use. Yet, the broker that works for one trader may not work for another. That’s because not all forex brokers use the same mode of operation. Some brokers have lower forex fees than others but have high stock fees. You might find a broker who trades with low minimum deposits ($50 or less), while others require an initial $500 or higher deposit.
Find a broker with a combination of features that catch your eye. Chances are, this broker will meet your needs. Other than being regulated, here are a few things you can look for when looking for a Forex broker.
Tips that will help you choose a forex broker
Hundreds of online forex brokers are hungry for your investment. But, how do you go about choosing the best one?
The first thing you want to pay attention to is the broker’s credibility within the foreign exchange market. And that does not only mean whether the company is regulated. Still, it is better to work with a regulated company. Not only are they more transparent, but like world forex, they offer compensation for losses. Traders who use unregulated brokers may not be entitled to any such perks.
But, traders should be aware that not every regulated forex trader they come across is honest. Despite the fines and criminal charges they may face, a lot of underhanded deals happen on the forex market. That is why reputation is important.
Before investing, cast a wide net for your research into forex traders.
Each forex broker has its own set of account options. When evaluating broker features, keep the following in mind:
- leverage and margin
- commissions and spread
- initial deposit requirements
- The simplicity of the deposit and withdrawal process
Leverage and margin
Some brokers may give their traders leverage through their margin accounting. Here’s an example. A trader who has a $1,000 account can secure a $50,000 stake with 50:1 leverage. Some brokers go as far as offering 200:1 leverage.
Leverage enhances the profit potential for profits. So, it works for the benefit of the trader.
You should also be aware that leverage can cripple the account of the trader. It magnifies the potential for winning, but it does the same thing for losses as well. Your chances of losing with leverage are just as great as your chances of incurring losses.
Commissions and spreads
A commission-based broker may take a portion of the spread as a fee. The amount should be the difference between a currency pair’s bid and ask of the forex pair up for trade. A broker who does not charge a commission most likely makes their money on wider spreads. Learn your broker’s methods of making money and compare them to others.
For instance, the broker could offer a fixed three-pip spread of a fluid spread based on how the market changes. Making a profit depends on the size of the spread. The wider it is, the harder it is to turn a profit.
The two most popular trading pairs are the EUR/USD pair and the GBP/USD pair. These will have tighter spreads than less popular traded pairs.
With some forex brokers, you can start trading with an initial deposit as low as $50. The buying power is much higher than the start-up minimum deposit if you have leverage. That’s why trading on the foreign exchange market attracts many new investors and traders. Several brokers offer standard accounts (micro and mini). These accounts will have different start-up deposits.
Making deposits and withdrawals are simple
Account withdrawal and financing policies vary by FX broker. Account-holders may be able to fund their accounts with any of these methods:
- credit card
- an ACH payment
- a wire transfer
- a bank check
- or a corporate or personal check.
Checks or wire transfers are the most common methods of withdrawal. For either service, the broker may charge a fee.
Currency Pairs Available
There are a great many currencies available on the forex market for trade. Only a scant few get the most attention. As a result, they offer the most fluid trade. We’ve already mentioned GBP/USD and EUR/USD. Two other primary pairs are USD/CHF and USD/JPY.
A broker may have a large number of forex pairs to choose from, but what matters most is whether they have the pairs which are of interest to you.
Forex trading takes place round the clock, five days a week. Brokers should also have customer support that matches their schedule.
Clients should have access to 24-hour customer care and not just an auto-attendant phone system. Customer support should also be multi-lingual.
Consider how easy it is to reach a live person on the phone and how easy it is to communicate. A brief call to a broker can provide you with information on the type of customer service they provide as well as typical wait times.
Platform for Trading
Where the investor has access to the market is the platform for trading. A trader should be confident that the platform supplied by the broker and software they provide have the tools they need to trade. You also want to ensure that the system allows you to enter and exit trade easily.
This last feature is of utmost importance. A well-thought-out trading platform will contain visible buy and sell buttons. It will also have a “panic” option that suspends all open bids. On the other hand, a poorly designed interface could result in costly order entry errors.
Here are a few more things you can consider about trading platform designs.
- customization choices
- different entry types for orders
- automatic trading options
- backtesting features
- strategy builders
- trade notifications
Most forex brokers provide demo accounts at no cost to traders. That way, you can get a feel of the trading platform before committing to a live account. They may also provide virtual cash with which you can practice.
Now that you know what to look for in a trading platform, we can get to what you really want to know. Who are the best Forex brokers?
Who are the best forex brokers
Our reviews below are not meant to be commitment or investment advice. Before committing to a forex broker, traders should conduct extensive research into the operation of these companies.
Roboforex operates internationally. It offers online trading services the world over. The firm gives traders a chance to trade currency pairs. But it also has stocks and indices, ETFs and commodities, energies, and metals. And these are just some of the assets you can trade using this platform. Roboforex has a total of twelve thousand accessible trading instruments.
Traders have a choice of five trading available accounts. Each one has a deposit of a mere ten dollars (USD/EUR. Leverage goes up to 1:2,000, and the floating spreads begin from zero pips.
When you use Roboforex for the first time, you can start with a demo account. That way, you can test out the trading strategies available without the risk of losing money.
Roboforex also offers several trading platforms, which we will list in a bit. Clients can also enjoy many bonus programs.
Roboforex trading platforms
- MetaTrader 4
- MetaTrader 5
- R MobileTrader
Because Roboforex is a regulated company, we know that it is safe to trade with. Millions of investors, brokers, and traders around the world use this platform. But, that does not necessarily mean it is the best broker for you.
Here, we’ve stated the facts about using Roboforex as a trading platform. But the best way to learn more about the trading experience is by reading the reviews of other traders and trying one of those demo accounts yourself.
Vantage Fx is a very well-known forex trader based primarily in Australia. It offers transparent trading. I mention this here because there are several forex brokers who are not upfront about their fees, liquidity delivery, and order execution.
Vantage Fx is a hybrid company. It is an ECN broker as well as STP. And in a sense, it also a market maker.
Like many other brokers, Vantage allows traders to set up dummy accounts. You can learn how the platform works and how to use the trading strategies the company offers.
Capital.com is an international CFD broker. The company started in 2016 and now has regulation status in the places listed below.
- The United Kingdom
Although regulated in the places above, Capital.com operates in more than fifty countries with over one million clients.
Given its regulated status, Capital.com is a safe and dependable broker with which traders can do business.
Trading using the capital.com online platform is easy. But, it is a CFD broker. That means high-risk trading. Your chances of losing money with a broker like this increases. So, if your appetite for high-risk situations is healthy, and you have the money to spare, Captial.com is right up your alley. .
Forex trading strategies
Trading forex without a strategy is kind of like starting a journey to a new place without a map. You have no idea what will happen to your money or where it will go. You could make more, or you could lose it all. The truth is, you have no clue if your bet will work in your favor.
Having a strategy for forex trading removes a bit of the guesswork out of the equation. It makes it easier to predict the outcome and trade on the foreign exchange market more successfully.
Finding the best Forex broker is not the end of your journey to becoming an expert trader. Not only must you learn to use the platform, you must also employ the best strategies to be a success. That’s what we want to talk about here.
What does forex trading strategies mean
Forex trading methods include market analysis. Market analysis allows traders to find good entry opportunities.
They supply exit points too.
Trade timing and position size are also benefits of market analysis. For this reason, a Forex broker who provides this feature is a good choice. Market analysis may also include technical indicators. A trader can use these indicators to predict market performance in the future.
Depending on their goals and objectives, a professional trader’s strategy may include aspects from many forms of analysis and a wide range of trading approaches. If you’re new to trading, use these simple techniques below for ideas on how to trade the markets.
How to pick a strategy for forex trading
As a trader, you want to adopt a good forex strategy. That’s because it is one vital part of the currency trading process that will help you be successful. At the same time, you want to choose a strategy that will work for you. Consider your personality and your lifestyle. Not all of us can spend our days glued to trading screens. Not everyone can deal with the stress of high-risk techniques and fast-paced trading.
Let’s say you find your trading strategy or strategies. What is the next step? Now you need to evaluate how your methods work.
You can do that with backtesting using a MetaTrader forex platform. If you can understand basic programming skills, it should be easy.
Test your chosen strategies using a demo account. We mentioned earlier that several brokers allow traders to open demo accounts where they can practice their trading skills and strategies. Once you are sure your strategies work for you, you can try them using a real account.
Trade with a modest amount on your first few tries to get a feel for using live money. As you build your confidence using your strategies, you can grow bolder with how much money you invest.
Best forex trading strategies
There are many profitable forex trading methods available, but not all of them are ideal for every trader. Choose a way that works best for you, taking into account your available time, personality type, and risk tolerance. We discuss these techniques below to help you find a strategy that you can work with.
Scalping is a short-term trading method that includes taking several tiny profits on very short-term trading positions. Scalpers must have quick reaction times. They typically enter and leave transactions in minutes or even seconds. This is a high-intensity, high-stress activity that may not be suitable for everyone.
Scalpers keep a close eye on price charts. They look for patterns. These patterns help with predicting the movement of exchange rates in the future. They analyze using very short-term tick charts.
Before we go into how tick charts work, we want to mention one more thing about how scalpers operate.
Scalpers do their best trading with brokers who offer tight spreads. The broker should also offer assured order execution and little or no order slippage.
How does a tick chart work?
Tick charts work by creating new bars whenever a certain number of transactions are completed.
A lot of traders use these charts because they decrease market noise very effectively. That’s because each bar is made equal and there are no bars with low activity.
Here is an example of how tick charts work.
Because each bar is made equal and there are no low activity bars, many traders believe these charts to be an excellent tool to decrease market noise.
Every bar in a 1000 tick chart shows 1000 deals. These can be any size. That means a tick may be a single contract/share trade, or it can be 10 000 shares. Hence the reason it is necessary to use tick charts that have volume.
2. Day Investing
Day trading is a bit like scalping in that it is also a short-term strategy for currency trading. But it is done during a specific trading session only.
Day traders do not typically hold positions overnight. They end all trades each day. That way, if a trader cannot pay attention to the market, there is a lower chance of falling prey to market swings.
Day traders do not typically hold positions overnight. So they close off all trades each day. When a trader is not paying attention to the market, this helps decrease exposure to market swings.
How does day trading work
Most traders who work with this strategy use trading plans that are based on the technical analysis short-term charts provide. There are a number of day trading tactics available to traders. The most popular is one called breakout trading. In this method, trades start when an exchange rate for currency pairs goes beyond a set level of the chart. Confirmation comes when they come with an increased volume.
Day traders may also buy a stock if it is rising in value or sell it short the value falls. In the case of falling stock, they hope to benefit from the stock’s decline. They may choose to trade the same stock multiple times in a day, purchasing one time and then short-selling the next to profit from shifting sentiment. They’re searching for a stock to move, no matter which technique they utilize.
3. News trading
News trading is a more risky tactic. You will see that traders with deep pockets are the ones who use it. But, if you have a healthy appetite for taking risks, this is the tactic for you.
News trading is based on both technical and fundamental analysis. Usually, they benefit from the known volatility on the forex market. That volatility is always associated with major news releases.
How does news trading work
People who follow news trading plans keep track of economic calendars. That way, they can learn important data releases. They then monitor the market very closely. Doing so allows them to prepare for the event so they can identify resistance levels and critical support. They do this to respond swiftly based on the outcomes. Following news trading patterns means traders must have the strict discipline to manage their currency positions. News trading markets operate fast. The trader very often has to set take-profit and stop-loss orders.
Because of the swift movement this strategy needs, it is not suited for newbies on the foreign exchange market.
4. Momentum or swing trading
Swing trading or momentum trading is medium-term trading that means to target greater market movements. Swing traders get this done by trading both with and against significant trends while the market is adjusting. As such they must be willing to hold overnight positions.
How does swing/momentum trading work
swing traders mostly pay attention to entering positions and exciting positions. They use momentum indicators which provide signals that tell them when to buy and when to sell. Traders use these signals to help them find oversold or overbought markets. They can buy or sell these markets.
A swing trader may either sell ahead of the resistance or support levels appearing on currency pair exchange rate charts.
5. Trend trading
Trend trading is one of the more popularly used forex trading strategies. It is a long-term method that involves following current trends. This strategy also includes keeping a close eye on directional movement for certain currency pairs.
Traders buy on pullbacks during up trends. They sell on rallies during down trends.
How trend trading works
Once a trend trader takes a position following the trend, they most times hold it until the forex market hits their target. They will also hold their position until the trend begins to reverse.
Trend traders very often use something called trailing stop-loss orders. This allows them to protect their earnings (profits) in the event there is a major reversal in the trend.
Now that we have all this preliminary information on how the foregin exchange market works, we can talk about the best forex brokers out there.
Best brokers for forex trading summary
Forex trading is a legitimate way to make money. But there are a lot of shady companies posing as real businesses whose goal is to rip you off. That is why it is better to stick with a regulated company. They have more to lose and ways to compensate clients if something goes wrong.
Still, it is the responsibility of the traders to research a regulated company before turning their money over to them. Find out what other new traders have to say about these platforms. Join the client forums and use the many tools these firms provide that can help you learn how to trade forex well.