Here are my broker selection checklist for Forex. All criteria are the most important for me. The ideal situation is if the broker meets all the points, but sometimes, depending on the circumstances, some deviations are still allowed.
Connecting to the rebate service.
If you can earn some additional funds from your trading in the form of cashback, so why miss this opportunity? Moreover, today, probably, 99% of forex brokers are connected to rebate services. I work with fxcash.ru, and select a broker right on their website. There is a very convenient filter that allows you to set the necessary parameters and easily select a suitable broker.
It should be noted that cashback will only make sense if you trade enough volume. Because, as a rule, on accounts with good trading conditions, the rebate is not very large, about $1-2 per lot. And to trade even one lot, you need either a very large capital, or a very large number of trades. So first you need to look at your trading statistics.
This parameter will be the most important if your strategy (EA) depends on trading conditions. For example, if you use a short stop loss – you need a low spread, if you make a large number of trades (scalping) – a low commission. Poor trading conditions can easily turn a profitable trade into a losing one. If you have tested an Expert Advisor at least once, you have probably noticed that an increase in the spread during testing even by half a point sometimes greatly worsens the test results. Therefore, the choice of a broker sometimes should be started with an assessment of its trading conditions.
For many, this point, perhaps, is defining, but I have long ceased to attach such great importance to it. The fact is that today almost all popular brokers have some kind of more or less adequate regulation. Of course, the British regulator is probably better than the regulator from Belize, But mostly the difference is not so significant for us, ordinary traders,. Therefore, it is quite enough for me if the broker has one of the following regulations:
- UK Financial Conduct Authority (FCA);
- Cyprus Securities and Exchange Commission (CySEC);
- Australian Securities and Investment Commission (ASIC)
- Belize International Financial Services Commission (IFSC);
- Mauritius Financial Services Commission (FSC);
- Seychelles Financial Services Authority (FSA);
One of the most important evaluation criteria. The older the broker is, the more reliable it is considered. The starting point for me is 10 years, if a broker has crossed this milestone, then you can trust him, especially if everything also is in order with the regulation. This period suggests that the broker is able to survive in a fairly strong competition in this sector.