Choosing a Regulated Broker

Why a regulated broker?

Regulatory authorities impose rules on brokers to ensure the financial system's stability. One of the objectives is to protect individual customers. They can also act as a mediator in the event of a dispute.

How to choose a broker?

  1. Make sure it is regulated.
  2. Test the trading platform.
  3. Control fees and commissions.
  4. Check that the minimum amount of transactions is adapted to your capital.

Our partner brokers

The site's partner brokers meet our criteria. These are brokers we trust. We refuse to put forward brokers we would not like to open a personal account.

# Products Regulation Trading platform Minimum deposit
eToro
  • Forex
  • Cryptos
  • Stocks
  • Commodities
  • Cysec (Cyprus)
  • FCA (Great Britain)
  • ASIC (Australia)
  • eToro Trading platform
200
Errante
  • Forex
  • CFDs
  • Cryptos
  • CySEC (Cyprus)
  • FSA (Seychelles)
  • MT4
  • MT5
50
AvaTrade
  • Forex
  • CFDs
  • Cryptos
  • CBI (Ireland)
  • CySEC (Cyprus)
  • ASIC (Australia)
  • FSA (Japan)
  • BVI FSC (British Virgin Islands)
  • FSCA (South Africa)
  • FRSA (Abu Dhabi)
  • MT4
  • MT5
  • AvaTradeGo
100
XTB
  • Forex
  • Cryptos
  • Stocks
  • Commodities
  • ETF
  • FCA (Great Britain)
  • KNF (Poland)
  • Banque de France
  • BaFin (Germany)
  • xStation
0

Choosing a broker (Forex, Stock, Crypto)

I have been trading the foreign exchange market as a private trader for over 18 years. I have been with different brokers. I have experienced at my expense the dishonesty of some. But, on the other hand, I have also opened accounts in companies serious who, even if they are there to make money, do not crush their customers. I will review several brokers to help you choose the best of them, the one that will suit you.

My study will give you the methodology to avoid scams, it will address the trading side to be sure to have the best product in your hands and the administrative side to be sure that our money is in good hands. For each point, I will give examples of what is good from my point of view and counterexamples of what is better to avoid. Finally, I will end with a review.

I want to point out that some links are affiliate links, so I earn money if you open an account through them. This money allows me to maintain this site but has never influenced what I write. All my opinions are sincere and reasoned, you will be able to realize it for yourself. The site needs about twenty servers on which I work full time so that everything works perfectly, using affiliate links allows me to invest in the future of the site so we all win in the end.

If you want to know more, I thoroughly tested eToro, XTB, Errante and AvaTrade. I will give you my detailed opinion of these brokers. Other tests are in progress.

Am I choosing the broker according to the trading platform?

We're not going to lie to each other; the trading platform is often seen as the most critical point. I have almost always chosen a platform before looking for a broker. For example, a few years ago, I wanted to automate part of my trading plan, I found that Metatrader was perfectly suited to what I wanted to do, so I only searched among brokers that offered MT4.

Some platforms are developed by independent companies and are found with several brokers. For example, we can mention Metaquotes with the star platform MT4 and the one struggling to replace it (despite better performance) MT5. A few brokers also offer TradingView.

Some brokers have developed their proprietary platform, sometimes with success, but, to be honest, the vast majority of the ones I've tried have significant ergonomic shortcomings.

An important point to check is the version of the mobile platform. Although I rarely place my orders on mobile, I find that seeing a price curve on a big screen is important, maybe because of my old age, but I follow my positions almost exclusively on mobile. I also like to have notifications when an order is closed.

I find MT4 and MT5 to perform very well when programming trading algorithms. Their mobile version is also satisfactory. On the other hand, if you are a discretionary trader, who places his orders manually, the Metaquotes platforms are gas plants (I know it is the one I am currently using). In this case, it is better to turn to more ergonomic platforms.

TradingView is, in my eyes, better quality for manual trading. I used it when I had an active account at Oanda. On the other hand, I was not too attached to their tool to develop trading algorithms, probably because it is much less open than Metatrader.

broker MT4 MT5 TradingView Proprietary platform
eToro eToro trading platform, very ergonomic
Avatrade
webtrading and AvatradeGo
XTB
xStation
XM
TradersTrust
Oanda
Desktop platform, quite simple platform based on TradingView
EightCap
Errante

The reliability of data flows, even in the event of high volatility.

Nothing is more frustrating than having a data stream that freezes when the market is agitated or executing a stop order several tens of pips from the desired level (negative slippage). Although this is a highly complex point to test because the demo platforms offered by brokers do not have these faults, it is straightforward to open a virtual position at precisely the desired price.

But, honestly, it is becoming scarce to find this problem with a broker. They have liquidity providers with enough intermediaries to execute orders at the desired price.

My advice on this point is to avoid small brokers who have a proprietary platform. Why? Because the big brokers have enough customers and means to offer significant liquidity, the brokers who use MT4 and MT5 often take advantage of the many providers working with Metaquote (thus with a proven infrastructure).

In the list of brokers that I give you, there is none that I find doubtful on this point. But if you choose a broker outside this list, oversee this point.

For the record, my first broker in 2003 was a Swiss broker, I won't name him but I can still say that he ended up having a very bad reputation and disappeared, bought by a bigger one. They had a pretty well done proprietary platform. I was very happy with it until the day when, on a Dollar Yen trade, they did what is called a stop sweep, the price moved 100 pips for a few microseconds, closing my position at a loss instead of take the trend that followed. It was a bit of the far west, it's this kind of behavior that gave forex a bad name. I immediately closed my account. If one day this happens to you, I advise you to complain to the broker to try to recover your money,to lodge a complaint with its regulator and then to change brokers, if they have done so once, there is a risk of it happening again.

The quality of order execution

The quality of order execution is somewhat similar to what I have just discussed in the previous chapter. When choosing a forex broker, you have the advantage of testing your platform. It's convenient, but it doesn't allow you to measure the quality of order execution. You will only realize this when you have your real account. Once you choose a broker, I advise you to check the price at which your orders are executed with the requested price. It won't be straightforward on market orders, but it is pretty simple on limit orders, protection stops, and take profit orders. The order is rarely executed precisely at the requested price (unless your broker guarantees it); measure the difference on several orders, sometimes it will be against you, sometimes in your favor but on the balance sheet, it must be neutral.

You may have heard a few years ago, in 2011, broker FXCM got caught red-handed as the slippages were overwhelmingly in their favor. They had a fine of several million and the obligation to reimburse their customers. Since then they have made amends and regularly publish their client's slippage statistics. This is a practice that tends to disappear among brokers with strict regulation but I will not be surprised to learn that it is a common practice among offshore brokers. Here again the choice of your broker is important, the best broker is not always the one with the best polish.

The number of instruments to trade

If you trade only the major currencies on the forex, as I do, even if I sometimes allow myself a trade on the Turkish Lira, you will have a lot of choices. I think that all brokers offer all the major pairs. On the other hand, if you trade some exotic currencies (MXN, TRY...) then some brokers will not suit you. The best broker for me will not necessarily be the same for you. You will have to do some research on the list of instruments offered.

You may also be interested in trading something other than forex and diversifying into indices, stocks, or cryptos. Brokers are opening up more and more to other markets. They rarely stay solely on the foreign exchange market. Successive regulations have reduced profitability, and when you are used to comfortable margins, you do everything to keep your lifestyle (in your opinion, why do they all look at cryptocurrencies, it's the new far west with still feeble regulation ). In short, let's come back to our problem, if you want to trade other markets it is sometimes interesting to do so with the same broker. On the one hand, it allows you to keep the same platform, and on the other hand, you don't have to divide your capital over several accounts.

So, in my eyes, a broker that offers the possibility of changing trading support will have an exciting advantage over others. During periods of calm on currencies, which can sometimes last for months or even years, we can invest in more dynamic markets (I am thinking of American technology stocks such as Tesla, Google, Apple... or even crypto or even an index like the Dax or the Nasdaq). There is always one market that moves more than the others.

Here again, it is essential to know if you want, like me, to focus on one market or if you prefer to diversify, which is recommended to spread the risk.

broker Number of currency pairs Cryptocurrencies clues Shares Raw materials
eToro
49
Avatrade
55
XTB
48
XM
57
TradersTrust
53
Oanda
69
EightCap
40
Errante
50

Leverage?

The forex is known to be a risky market, and I can tell you the opposite. Apart from exceptional periods, such as the explosion of the Swiss Franc in 2015, or the gap at the Monday opening following the capture of Saddam Hussein in 2003 (you will notice that it is so exceptional that we remember it for very long), currency pairs rarely move more than one or two percent per day. I will even say more; a currency pair that moves more than 10-15% in a straight line over several days is extremely rare. On the other hand, currencies trade 5 days out of 7, so there cannot be a gap only on Mondays, and, from experience, this gap is often only a few pips.

On the contrary, it is not uncommon to see shares move several percent per day, and even during specific periods, several tens of percent with huge daily gaps.

Forex is known to be a risky market because some brokers offer very high leverage effects. You can find brokers who offer leverage up to 1000. Concretely this means that you can open positions with sizes up to 1000 times your capital. Imagine that you have an account of $100, you can open a position of $100,000, on the Euro Dollar each pip will vary your capital by $10 or 10%. With 10 pips against you, you will lose 100% of your money. You will have as much chance of winning in the long run as playing the Lotto.

One wonders what brokers' interest is to liquidate their clients so quickly. It's pretty simple; if they offer this leverage, it means that they are your counterparty, which means that if you win, they pay the winnings out of their pocket, but if you lose, everything goes to their account. So it's in their interest that you lose.

The regulators have strongly limited this leverage; if your broker offers you more than what is authorized by the regulation, it means that it's not regulated. The maximum leverage is 30:1 for individuals on major currency pairs in most jurisdictions in forex. When choosing your broker, be careful not to choose one that offers more than this limit. All the brokers presented on this page respect this rule.

Minimum position size

Sometimes, we are not all millionaires after all, we only have a few hundred euros to put in a wallet. With €100 and a leverage of 30, you can open positions up to €3000.

An important point to check is the minimum position size when selecting your broker. If it is a lot ($100k), all small accounts will be excluded, if it is a mini lot ($10k), you must have at least a few hundred euros in your account, and you must be ready to remit money if you lose enough to be unable to open any more positions. Fortunately, most brokers offer micro-lots ($1k) and sometimes nano lots ($100), leaving us the possibility of opening an account with little capital.

Depending on your financial capacity, it is, therefore, essential to read the documentation to know the minimum lot size before choosing your broker.

  • eToro: $1000
  • Avatrade: $1000
  • XTB: $1000
  • XM: $1000
  • Traderstrust: $1000
  • Oanda: $1000 on Metatrader, $1 on proprietary platform
  • Eightcap: $1000
  • Errante: $1000

What are the fees when trading forex?

Brokers do not all have the same fees. There are several types of fees, some are clear, and others are hidden:

  • The markup on the spread. The spread is the difference between the sale and purchase prices (Bid/Ask); it exists on all financial instruments, including stocks. Forex is an over-the-counter (OTC) market, which means no centralized organization gives prices. The speed of modern communications means that this price is still generally similar everywhere. When you buy Dollars from your broker, he asks his liquidity provider for a price and then offers you the same price with a small extra margin, called markup. For example, you want to buy Euro-Dollar, your broker asks its liquidity providers for the best price, one of them offers it 1.2000. The broker then adds its markup and sells it to you at 1.2001. He, therefore, cashes in passing 0.0001 or 1 pip. The markup can range from a tenth of a pip to more than one pip, depending on the broker. A little anecdote on this, a few years ago, I was with a broker who offered exciting spreads, but after a while, with another trader, we suspected him of changing his markup when a position was open. So we checked that the broker offered us the same price (Bib/Ask). We opened a position on one of the two accounts, and when the position was opened, the two platforms no longer offered the same price; the broker had modified his markup to collect a little more when I closed my position. I changed broker.
  • The Commission. The broker may guarantee you a price without markup. In this case, he will probably have a commission on each transaction. This commission is often a fixed price. This type of fee is never advantageous for small accounts. Let's say that if you don't have several tens of thousands of euros (or even hundreds) in your account, it will be less advantageous than a markup on the spread.
  • The swap. The swap is very particular and often difficult to evaluate. It is not a cost. It can be negative or positive. When you hold a position overnight (Overnight in trader language), there will be an amount pegged to the difference between the central bank interest rates of the two currencies in the pair you bought or sold.
    An example will be more straightforward, I buy EUR/CAD, the rate of the ECB (European Central Bank) is at 0%, the rate of the Central Bank of Canada is 0.25%, as you are buying EUR and seller CAD you will receive an ECB interest rate (0%), and you will pay that of Canada (0.25%). In this case, you will pay a fee. If you had been a seller, you would have received money because the rates would have been in your favor. This is called the carry trade. In real life, it's not that simple because brokers can add a markup on the rates, so you need a significant spread between the rates to receive money. The broker must give these rates. You should know that to have to pay or receive the swap, you must keep your position open at night (usually at midnight GMT), and on Wednesday, the triple account swap is due to a two-day bank delay to settle the positions (Wednesday + 2 days = Friday) and at market close on weekends.

It was a pretty technical big part. I summarize, brokers have a markup on the spread, can have a commission (generally for large accounts), and pay or collect the swap. So when you choose your best broker will not necessarily be the one with the lowest spread argument, remember to ask him for his swap rates.

Minimum deposit

When you do not have a significant amount of money, it is still possible to trade on forex. However, as we have seen, the minimum size of the position combined with the leverage effect makes it possible to limit the investment. In addition, you may want to test the broker with a real account rather than staying with a demo account. We have also seen that there may be differences in operation. And finally, even if you have several thousand euros to invest, you may want to put it gradually in your trading account. A concrete example: I have 10k€ to invest, my trading plan limits me to 0.5% maximum risk per trade (I, therefore, accept a loss of 50€ per trade) I can only put 1000€ in my trading account, keep 9000€ in the bank and place trades with a risk of 50€, if necessary I can add another €1000 later, few traders think about it, but I think it's a good idea to keep a reserve outside the broker, especially if you don't know him well yet.

For all these arguments, it is interesting to choose a broker who does not ask for too high a minimum amount.

Minimum size per broker:

  • eToro: $200 (around €170)
  • Avatrade: €100
  • XTB: No minimum
  • XM: from $5 to $100 depending on the type of account
  • Traderstrust: $50 to $20,000 depending on account type
  • Oanda: $0 to $20000 depending on the type of account
  • Eightcap: $100
  • Errant: $0 to $15000 depending on the type of account

The minimum deposit to open an account is often relatively low with all brokers. You will notice that some brokers can offer accounts with much more exciting conditions (better spread, reliable advice, etc.). Still, for this, you have to open a more significant account, generally several tens of thousands.

Fees on deposit and withdrawal, inactivity fees.

We are not going to lie to each other, we trade on the forex to make money. We all expect to withdraw some of our earnings one day. We may also have to close our account to change brokers or simply for the need to finance another project. It is when withdrawing money that some brokers charge fees, these are often fixed fees. The fees can be negligible on large withdrawals, but withdrawals of a few hundred euros can represent a significant percentage. Remember to check this point when choosing a broker.

On the other hand, if you want to take a break from your trading, remember that some brokers may charge inactivity fees. These fees can be very high, but you can avoid them by just placing an order once in a while.

broker
Fees on deposit Minimum deposit Fees on withdrawal
Minimum withdrawal Conversion fees Inactivity fees
eToro
Any
Any $5 $30

50 to 150 pips for the deposit (about 0.5% to 1%)
from 50 pips for the withdrawal (about 0.5%)

$10 per month if no connection for 12 months
Avatrade
Any
€100 per card
€500 per transfer
Any
Any
Bank charges

€50 every 3 months without activity
+ €100 per year


XTB
Any
Any
Any
1.89% on Paypal
1.05% on credit card in USD (free in EUR)
Bank charges
€10 per month if no activity for 12 months
XM
Any
Any
Any
Any
Bank charges


TradersTrust
Any
€50 Any
€50 Bank charges


Oanda
Any
Any
Any
Any
+0.5% applied to the exchange rate £10 per month if no activity for 1 year
EightCap
Any
Any
Any
Any
Bank charges


Errante
Any
€50 Any
€100
Bank charges
Any

A regulated broker?

It will be evident that a broker must be regulated in a country that sets rules protecting individuals and establishing anti-money laundering measures. It is essential, we must not compromise with it. It would be best to systematically eliminate offshore brokers (Belize, British Virgin Islands, Mauritius, Bahamas...). Your capital will not be guaranteed.

The reliable regulations are as follows:

  • Europe (MiFID), European regulators must follow restrictive rules, in particular MiFID II, they must be transparent (number of customers who lose money, etc.), must not offer bonuses for opening an account, actions marketing are very supervised, leverage is limited to 30:1, capital protected up to €20k
  • United Kingdom (FCA) capital protected up to £50k
  • USA (NFA), brokers must have a large capitalization, leverage limited to 1:50, transparency, capital protected up to $75k
  • Australia (ASIC), leverage limited to 1:25
  • Japan (JFSA), leverage limited to 1:25, capital protected up to ¥10M
  • Switzerland (FINMA)

It should be noted that the AMF (France regulator) maintains a list of brokers to avoid. A minimum of common sense permit us to avoid opening an account with a broker present on this list, but it is essential to know that this list exists.

Test customer support?

I've never come across lousy customer support usually, when I ask a question, I get an answer. But I did not have an account with all the brokers. You can test the technical support by asking questions on the platform. On the various points that I have discussed previously, you will see if your interlocutor answers you frankly or if he avoids angry questions.

I contacted all the brokers in this comparison. I sent them an email in French for some additional information. I sent mail on a Tuesday at the beginning of the afternoon to be sure to fall during the offices' opening hours.

My message:

Hello,
I live in France, I would like to have some information before opening an account with you.

  • Are there fees on deposits and withdrawals?
  • Do you have any fees on inactive accounts? And if so how many are they?
  • What leverage can I use? Besides, I don't really understand this leverage effect, if I open an account with 2000€ what does it bring me?
  • I want to place Forex orders but do you offer other markets? Which are the most interesting?

Thanking you.
Cordially,

The answers, I put the time to answer:

  • eToro: I'm still waiting for an answer
  • Avatrade: I'm still waiting for an answer
  • XTB: (1h30) very detailed answer to each of my questions explaining the leverage effect in French.
  • XM: (15 minutes) simple but straightforward answer on each point in French. They do not consider that I am French and refer me to a site without regulation (Belize), with very high leverage and no security on my capital.
  • Traderstrust: (2 hours) quick response in French. They sent me links to the specific pages on their site that answered my questions.
  • Oanda: (20 hours) Very detailed answer for each question with links to the pages of their site for more details, in English.
  • Eightcap: I'm still waiting for an answer
  • Errante: (25 minutes) answer in English sending me back to the site to look for the information myself.

Conclusion

This is precisely the methodology I follow when I choose a broker, it's relatively simple and complete, but I think you have to take the time to do it. Of course, if you have any doubts, you can contact me. I am pretty available.

The brokers present on this site are regulated and seem trustworthy to me. But, again, do not hesitate to contact me if you notice a problem with one of them.

Arnaud Jeulin picture

Arnaud Jeulin Managing Director

After an engineering degree, Arnaud started a career as a developer. He worked with traders and back office to build prototypes and trading tools. Then he set up his own company, Mataf, in 2003.

For the last 19 years Arnaud has improved his knowledge of brokers and markets, he uses his expertise to enhance Mataf to help users to avoid unethical brokers and trading signal providers.

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