Forex Broker Comparison: Find The Right One

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Features of Forex Brokers and Trading

These brokers offers Forex trading (along with other CFD markets). The brokers can be compared broker vs broker 'Quicker' by generating a comparison table or may be compared in more detail, by going to a dedicated comparison page on this site, using the tool above. The trader can switch through different combinations, after they select 'Quicker', to compare different pair combinations at a pace they find comfortable. The detailed comparisons compare brokers by features which can include account types and features, minimum deposit, markets, representative spreads, leverage, platforms and regulation as well as providing a comparison table, an introductory overview, a summary in a table and as key points.

  • Forex pairs can include major pair, minor pairs and exotic pairs
  • The minimum deposit can range from no minimum deposit to large minimum deposits for Premium account types, depending on the broker. Very low minimum deposits are typically for accounts which offer small trade sizes (e.g. Forex cent accounts) and other accounts can have higher minimum deposits. If the trader wishes to trade, then they will have to deposit something even if there is no minimum deposit requirement. In effect the minimum deposit is the amount which the trader needs to deposit to trade a market. What this is depends on a range of factors, including the value of the market, trade size and leverage (increasing leverage increases risk). No minimum deposit requirements though can give the trader additional flexibility when choosing what to deposit
  • Nearly all the brokers offer MetaTrader 4 (MT4), and some offer other platforms as well. MT4 is a platform which allows traders to trade Forex with automated trading strategies, but it can also be be used by traders who execute their own trades, as it has a range of charting tools and a wider support network. Brokers which do not offer MT4, may choose to focus on optimising the experience for traders who trade on their own behalf with a user friendly Forex web trader, or may offer other platforms which can be used for automated trading, such as JForex or increasingly MT5 (the successor to MT4) or cTrader
  • Spreads can be fixed or variable, but fixed spreads can typically vary as well. Depending on the broker, fixed spreads can vary outside of the day trading session or normal market conditions, for example in volatile markets
  • Brokers normally offers demo accounts. These can be a way for the trader to familiarise themselves with a platform such as MT4 and to practice trading and test out ideas.
  • If the trader wishes to find a broker by features (such as MT4, demo accounts and so on), they may do so with the Broker Hub Tool on the home page of this site.

How may a comparison help the trader choose a broker ?

It means the trader or prospective trader can choose a broker, based on the way they trade. If the trader applies automated trading then they can find a broker supporting this style of trading, for example one with MT4 and perhaps (but not necessarily) no dealing desk trading conditions. If they want to make their own trading decisions, then they could find a broker which offers a user friendly platform and/or tools to assist this kind of trading (such as technical and fundamental analysis tools on the platform).

These brokers may have a range of platforms providing tools to analyse markets (such as charting tools). The brokers here offer Forex, but also have a range of other markets, which in some cases can include markets such as Stocks CFDs.

Thus the trader can choose a broker suited to the types of markets they trade or wish to trade. A comparison can help the trader pinpoint what it is different brokers offer, which they can match with what they want.

Currency trading

Currency trading is speculating on changes in the relative value of pairs of currencies.

Forex pair trading

These brokers provide trading in Forex pairs. Around 50+ is typical, but some brokers can offer less and some more. A Forex pair has a value (consequent on the relative value of the constituents of the pair, e.g EUR vs USD), which tends to change in the market, due to a wide range of possible factors. This movement in value of the Forex pair is what is being traded, not the actual currencies. Each change in value is measured in 'pips'.

What is a pip in Forex ?

A pip is the unit of change in the price of a Forex pair. The value of the pip depends on the lot size of the trade. Thus smaller lot sizes, like micro lots, can have a smaller pip value than a mini lot or full lot size. Online trading platforms typically offer fractional pip pricing, where changes smaller than this 'smallest unit' are shown. It can be important to note that JPY crosses have a different pip unit than other pairs. In other pairs the unit is four decimal places (e.g. X.0000+-), in JPY crosses it is two decimal places (e.g X.00+-).

How are pips important to trading ?

As well as showing the value of each move, they have an importance in a type of analysis based on value. This looks for changes in pip value around and between big figures, which are seen as having a significance in terms of the formation of trading patterns.

Most traded currency pairs

The most traded currency pairs tend to be major pairs such as EUR/USD, USD/JPY and GBP/USD. Other pairs, not necessarily major pairs, may become popular for a time, perhaps for fundamental reasons such as interest rate policies by Central Banks.

Is analysis important in Forex trading ?

To speculate on the change of value of a Forex pair, traders may look for a basis to make this speculation. For example why would EUR strengthen or weaken against the Dollar (thus increasing or decreasing the value of the EUR/USD pair). Analysis can be typically divided into technical and fundamental analysis.

Technical analysis tends to look at the chart and look for clues of changes in value for pairs, using tools such as technical indicators (with the assumption that the chart contains a reading of the market). Fundamental analysis tends to look at factors external to the market, such as interest rate changes or economic data for a country. Some trading styles may rely more on one type of analysis than another.

Is fundamental analysis important in Forex trading ?

It may not reliably predict the direction of movement of a Forex pair, but fundamental data can move pairs, particularly around news events which are usually based on some kind of data being revealed to the market and its participants and may be of interest to news traders.

As well as pre-set major news events, the Forex market is subject to a stream of events, which can affect the way a pair moves. Fundamental analysis can be a way of seeing a potential effect from the perspective of one side of a Forex pair, if the fundamental data can be localised to one of the currencies's countries.

Is technical analysis important in Forex trading ?

Technical analysis is used extensively in Forex trading, by a wide range of participants, from retail traders to institutions. It provides a rationale for making trades and analyzing both the market and trades. But it should not be relied upon to predict market outcomes. The range of inputs into the market which can alter the movement of a pair (the path traced on the chart of changes in relative value) is extensive and varies.

The idea of technical analysis is that the chart when allied with technical analysis tools like technical indicators can potentially point to these effects without having to untangle each of them, and provide a way of projecting potential outcomes. What can happen is that a trader may use too many indicators in an attempt to get a more accurate projection of potential outcomes. Fundamental analysis like value analysis may help make sense of what is happening with technical analysis.

Forex fundamental vs technical analysis

Fundamental analysis is looking at possible effects on the market (e.g. economic data) and attempting to gauge what these will do to Forex pairs. Technical analysis is looking at the effect of causes on the market (i.e. the chart) and applying tools to this, without being too concerned with what these causes are.

The Forex market moves sometimes rapidly in complex ways from a wide range of inputs both external and internal, thus technical analysis can be a way of dealing with the market without getting bogged down in trying to work out cause and effect.

However the Forex market can be amenable to fundamental analysis particularly when considering strong short term effects, such as news releases and longer term influences on pairs, such as interest rates. This said even strong, clear moves in news trades can rapidly oscillate, expressing the underlying complexity of this market.

Forex pair movement

On the chart, the change in the relative value of the constituents of a currency pair, can be represented in various ways, for example line or candlestick charts. In Forex candlestick charts are used extensively, as they can capture a range of representations of this movement. Changes in the movement of a Forex pair, can be based on a range of factors, which traders may try and deduce or otherwise gain an understanding of from analysis.

Forex patterns

There are repeating patterns which are seen across time frames, again and again, traced out on the chart as a Forex pair moves. The attraction of these is that it seems that one needs then to look for clues for a pattern forming, to have a gauge of how the pair will move (i.e. its direction). The problem is that for various reasons, including the susceptibility of the market to inputs changing the way it moves, patterns will not necessarily form as expected. Thus while it is easy to see clear patterns on a chart, these have already occurred, and it needs to be considered that at the time, other patterns may have formed, depending on market events.