Are you looking for the best online broker and not sure what to consider when choosing one or the other? In our detailed online brokers review you will learn about broker classifications, important selection criteria, and this year’s broker ranking based on the most important criteria and interactive brokers reviews.
Classification of Forex brokers in 2024
You may be wondering why we only have a few brokers to choose from when, in fact, there are hundreds of them. The reason is quite simple: the Forex brokers listed below are the best and offer the best trades for the average trader.
Ranking position | Logo | Minimum deposit | Licensed by | Accounts | Registration |
1 |  | Cyprus Securities and Exchange Commission (CySEC) with license number 401/21 | Demo, Standard, Pro, Raw Spread, and Standard Cent | ||
2 |  | Financial Services Authority of Seychelles (FSA) | Demo, Raw Spread, cTrader, Standard | ||
3 |  | FSC of Belize (000138/7) | Demo, Standard, Cent, ECN accounts, RTrader, VIP, Prime | ||
4 |  | Island of Mwali (Comoros) with license number T2023284 and supervised by the Mwali International Services Authority (MlSA) | Standard, Fixed, ECN, Crypto, Demo | ||
5 |  | ASIC, AUSTRAC, BAFIN, CIMA, FSC, FMA, CySEC, MAS, SCA, VFSC | Pro, ECN, Standard, Demo | ||
6 |  | CySEC, South Africa's FSCA, UK FCA, and FSC (Mauritius Financial Conduct Authority) | Micro, Advantage, and Advantage Plus | ||
7 |  | Australian Securities & Investment Commission (ASIC), (CIRO), (JFSA), and in the European Union via MiFID | Standard, Demo | ||
8 |  | Australian Securities & Investment Commission (ASIC) and the Financial Markets Authority (FMA) | Edge, Classic | ||
9 |  | Cyprus Securities and Exchange Commission (CySEC) and FSCA | FxPro MT4 Instant, FxPro MT4 Instant, FxPro MT4 Market, FxPro MT5, FxPro cTrader, VIP. |
Types of online brokers
An online broker acts as an intermediary between the trader and the market through a trading platform. There are many types with different characteristics, so you must clearly understand what each one entails and how they can affect trading. For more information, we recommend reading forex brokers’ reviews written by traders. Before choosing the best online broker, you need to know the different types of brokers.
| Broker type depending on order execution | Description |
| Forex broker’s dealing desk (with a trading desk) | They make money through spreads and liquidity provisions. They also try to find a buy or sell order from their other customers before placing a cleared trade or transferring it to a liquidity provider. They are known to offer artificial quotes they create and orders are executed on a discretionary basis. |
| Forex broker without dealing department | It is a bridge between clients and liquidity providers, and there are no requotes when an order needs to be executed. You can learn more about this type of broker in Forex brokers’ reviews. |
| STP (straight-through processing) | What is an STP broker? STP technology does not require a trading desk. All orders are sent to the broker’s liquidity providers and prices are executed at the bid/ask price provided by the liquidity providers. |
| ECN (electronic communication network) | There are many similarities between STP and ECN broker types, so it can be difficult to choose the best one, but the main difference is routing. We recommend finding out more about the ECN forex broker reviews. |
| Hybrid (ECN+STP) | The combination of ECN and STP models allows an online broker to fully automate order entry, taking care of spread pricing and trade execution aspects. By utilizing the STP and ECN models, brokers avoid creating markets. This is a win-win situation for both traders and brokers. |
Depending on the trading platforms:
- Forex broker MT4;
- Forex broker MT5;
- Broker with its platform;
- Broker with other platforms.
Depending on the type of clients, forex brokers can be:
- Forex broker for professionals;
- Forex broker for non-professionals.
Criteria for choosing the best Forex broker
There are many different types of online brokers, so let’s take a look at how to choose the best one. You need to consider the following criteria, which we will look at in detail below:
- Markets offered:
- Trading platform;
- Spreads;
- Types of trading accounts;
- Leverage options;
- Quality of order execution and slippage. Low spreads are good, but execution of orders at the sale price is even better;
- Custom tools;
- Trading strategies;
- Safety of funds;
- Online broker regulation;
- Customer service;
- Online brokers’ reviews;
- Educational materials.
Let’s delve into each of these points to choose the best online broker!
Financial instruments offered by the Broker
It is always interesting to be able to invest in several markets at the same time. For this, it is important to work with an online broker that offers to work not only on Forex, but also on other markets such as CFDs, indices, commodities, stocks, cryptocurrencies, bonds, or ETFs. Forex brokers offer a wide range of currency pairs, being able to choose from the most important to the most exotic, depending on your strategy. Online brokers should also have specialized accounts in each of these instruments.
Cost of trading
Each broker’s trading accounts differ in the tools offered, the types of leverage, and the spread required to open a trade.
Leverage and Margin
Forex or indices are markets where you often trade with leverage. To properly manage your position, you must choose the leverage you want to work with. Traders have different leverages available depending on the client classification: up to 1:30 for retail clients and up to 1:500 for professional clients. Leverage is a loan provided by a broker to account holders.
Spreads and Commissions
An online broker makes money through set commissions and spreads. A commission-based forex broker may charge a certain percentage or difference between the Bid and Ask price of a currency pair. However, many brokers advertise that they do not charge commissions and instead make money on higher spreads. The wider this is, the larger the payment you will have to make when you open a trade (and therefore the lower your potential profit).
Initial account deposit
Another difference between the different types of brokers is the minimum deposit to start trading. Most forex accounts can be funded with a limited initial deposit (even as low as €100). This is one of the many reasons why forex trading is very attractive to new traders and investors. A good criterion for deciding which broker to use is whether they offer standard, mini, and micro accounts with regulated initial deposit requirements.
Deposits and withdrawals
Each online broker has its own deposit and withdrawal methods. Brokers may allow account holders to fund their accounts online through payment platforms, simply by credit card or bank transfer.
Withdrawals can usually be made by bank transfer. Sometimes they may charge a fee for each service. Depending on the financial instruments and trading platforms you choose, you may need to choose a different type of trading account. A good online broker will offer you several types of accounts: No Dealing Desk accounts, STP accounts, or reduced margin accounts for higher deposits.
Trading platform
A trading platform is the portal through which a trader has access to the market. This is why many people are looking for the best. Choose an online broker that has a trading platform that you feel most comfortable with and that best suits your needs.
Regulation
It is always better to open an account with a regulated broker to avoid possible irregularities or fraudulent transactions. There are many Forex and CFD broker scams these days, and very often these sites are hardly regulated. The first thing you should check to find the best online CFD broker is that it is registered with the CNMV and regulated. Due to potential concerns about deposit security and broker integrity, all of your accounts should only be opened with companies that are properly regulated.
Educational materials
A forex broker is not authorized to give investment advice but may offer general education services on forex and other markets. Novice traders need to understand trading terminology, so the best option is always a broker with a good training service. A good broker offers various educational materials such as:
- Articles and guides;
- Trading news;
- Video lessons;
- Live online webinars, etc.
Brokers reviews
It is always necessary to read the best brokers’ reviews on trusted sites before choosing a particular broker. Official reviews, including bitcoin brokers’ reviews, can be found on the brokers’ official websites, as well as on review websites.
FAQ
The main criteria are trading conditions, reliability, regulation, and safety of funds.
There are many similarities between STP and ECN broker types, so it can be difficult to choose the best one, but the main difference is routing. By utilizing the STP and ECN models, brokers avoid creating markets. This is a win-win situation for both traders and brokers.
Official reviews, including bitcoin brokers’ reviews, can be found on the brokers’ official websites, as well as on review websites.
