Forex Broker Comparison: Find The Right One

Top Forex Brokers | Compare And Find The Right Regulated Broker

Forex Broker Comparison Table with Broker vs Broker
Trade Now >>Minimum DepositFX CommissionMT4Broker vs Broker
City Index£100None
ETX Capital£100None$50None
eToro$200NoneX Trade$50$4.5
IC Markets$200$3.5

Forex Broker Comparison - Features of Forex Brokers and Trading

These brokers offers Forex trading, along with CFD and in some cases spread betting products. There are more detailed comparison in the Broker vs Broker tab. These compare brokers by account types, minimum deposit, markets, representative spreads, leverage, platforms and regulation as well as providing a comparison table, an introductory overview, and a summary of key points.

  • Forex products are offered usually as Spot Forex, as CFDs or for spread betting and the trader does not own any underlying asset
  • Some of these brokers offer no dealing desk services, which can include STP, STP/ECN, ECN and DMA. ECN is taken to mean the availability of very low Forex spreads, typically with a commission charge and faster order execution. ECN means 'Electronic Communication Network' and refers to the capacity to trade with liquidity providers, however brokers have different models to connect traders with Interbank and other liquidity, for which they may charge a commission - it is also possible to have the commission charge included in the spread. No dealing desk is taken to mean that the broker does not intervene in the order process, for example by re-quoting or rejecting orders.
  • The commission charge quoted in the table is for ECN accounts and is a charge per standard lot (100,000) per side on MT4. Brokers which charge commissions for Forex, may not do so on other accounts (which therefore can have higher Forex spreads)
  • Forex pairs available are typically 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. Because there is typically a minimum amount which can be sent from a funding source for brokers which do not set a minimum deposit, this figure is quoted where applicable. Very low minimum deposits are typically for accounts which offer small trade sizes and other accounts can have higher minimum deposits
  • Nearly all 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 used for discretionary trading (where the trader makes the decision to trade), as it has a range of charting tools. Brokers which do not offer MT4, may choose to focus on optimising the discretionary trading experience, or may offer other platforms which can be used for automated trading, such as JForex or MT5
  • 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
  • These broker are all regulated

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 they use automated trading then they can find a broker supporting this style of trading, for example with MT4 and perhaps (but not necessarily) ECN trading conditions. If they want to make their own trading decisions, then they can find a discretionary trading broker. These brokers may have a range of platform (including MT4, which can be used this way) providing tools to analyse markets (such as charting tools). The brokers here offer Forex, but also have a range of other market, some with more, some with less. Thus the trader can choose a broker suited to the types of markets they trade or wish to trade.

Forex trading commissions

Some of these brokers, as can be seen from the table, offer Forex pairs with a commission charge. Those providing this service are typically providing relatively low variable spreads, in addition to this charge (the total cost of the trade is the spread plus the commission charge). The figure provided is the starting charge, if it varies, per lot per side (some brokers may have lower charges based on such factors as traded volume). A number of brokers do not charge commissions for trading Forex (so the cost is the spread).

Currency trading

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

Spot Forex vs CFDs

'Traditional' Forex brokers offered trading in Spot Forex, where the broker would exchange a currency for another (thus for EUR/USD, EUR would be bought or sold for USD in the Spot Market), allowing the trader to speculate on changes in relative value from the beginning to the end of the trade.

However Forex can also be traded as CFDs, which are contracts between the trader and the broker exchanging differences in value (i.e. what is the difference in the relative value of EUR vs USD from the beginning to end of the trade based on its price in the Spot Market). A difference between these two ways of trading Forex, is that a CFD is a derivative product based on the price of the underlying in the Spot Market.

Thus depending on the broker, Forex may be offered as a CFD (or a spread betting product, which is also based on differences in value) or as Spot Forex. Some brokers may also offer Forex Futures CFD trading, which is based on the Futures Market, not the Spot Market.

Forex pair trading

These brokers provide trading in Forex pairs. Around 50+ is typical, but some can offer less and some considerably 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. 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, will have a smaller pip value than a mini lot or full lot size. Some brokers will offer fractional pip pricing, where changes smaller than this 'smallest unit' are shown. It is 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, 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.

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.

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.