How to check a broker's licenceNine steps, on the regulator's website rather than the broker's. The one that catches people out is the first: you are not checking a brand, you are checking a company, and the brand is usually several of them.How to choose a forex broker
Six decisions, in an order that matters. Most people start with the spread, which is the fourth of them and the one that changes least between the brokers worth considering.
Search for the best forex broker and you get lists. The lists disagree, they change monthly, and none of them knows where you live - which is the single fact that most determines which broker you can actually use and on what terms.
A better approach is to run the decision as a sequence of filters, starting with the ones that cannot be fixed later. Getting the order right is most of the work.
Where the hundred brokers we rate sit on the two things that survive every other consideration.
- 70hold a Tier 1 licenceASIC, FCA, CySEC, MAS and equivalents. Thirteen are Tier 2, ten Tier 3 and three unregulated.
- 99segregate client moneyWhich makes the one that does not worth knowing about.
- 34have no compensation schemeA third of the market offers no recourse if the firm itself fails.
The six filters, in order
Each step removes candidates. Run them in this sequence and the list is short by the time you reach the questions that are hardest to answer.
1. Which entity would actually take you
A brand is several companies and your country of residence decides which one opens your account. That single fact sets your leverage cap, whether negative balance protection applies, and which regulator hears a complaint. Everything below is a property of the entity, not the brand.
2. Whether that entity is licensed, verified yourself
Not whether the group holds licences somewhere, but whether the specific entity in your client agreement appears on that regulator's public register, with an active licence covering the activity. Sixty-nine of the hundred brokers we rate list three or more regulators, and only one of them will be yours.
3. What happens to your money
Segregated client funds, negative balance protection, and whether a compensation scheme covers the entity if it fails. These are three separate safeguards and brokers list them together in a way that invites you to read them as one.
4. What it costs to trade what you trade
Spread plus commission on your instrument, in your account type, plus overnight financing if you hold positions. Advertised minimum spreads are close to meaningless: 71 of the hundred advertise from 0.0 pips and their measured averages differ by more than tenfold.
5. Whether the platform does what you need
Automation, copy trading, the instruments you want, and the order types you rely on. Concrete requirements, easy to check, and the place where a broker either qualifies or does not.
6. Whether you can get your money out
Withdrawal methods, timescales, fees, minimums, and whether the routes out match the routes in. This is the one nobody checks before depositing and everybody checks afterwards.
Everything in steps three to six can be changed by opening a different account. Steps one and two cannot be changed at all.
Why the entity comes first
This is the part general advice consistently skips, and it decides more than the rest combined.
A broker with an Australian, a Cypriot and a Seychelles entity is three different propositions. The Australian one gives you a 1:30 cap, ASIC oversight and negative balance protection. The Seychelles one may offer 1:1000, a regulator with far less reach, and no protection at all. Same website, same logo, same support team.
So the first question is not "is this broker good" but "which of these companies would open my account, and is that one good". The country pages on this site ask exactly that: for each of ten countries, which brokers hold a licence there.
What costs actually look like
Two accounts can cost the same and advertise completely differently. A raw-spread account showing 0.0 pips with $7 per lot round-turn commission costs roughly 0.7 pips all in. A standard account showing 0.9 pips with no commission costs 0.9 pips. The first looks dramatically cheaper and is not.
Add overnight financing if you hold positions for more than a day - on a leveraged position held for months it can dwarf everything else - and the non-trading charges that only appear later: inactivity fees, withdrawal fees, and currency conversion if your account is not denominated in the currency you fund it with.
Compare the total on the instrument you will actually trade, in the account type you will actually open. Any other comparison is between two marketing pages.
The two ways to get this wrong
Both are common and they fail differently. The second fails more slowly and more expensively.
Choosing on the headline numbers
Picking the highest leverage and the lowest advertised spread. Both figures are marketing, both belong to an entity that may not be yours, and the combination points reliably towards the least supervised end of the market.
The failure is fast and obvious: an offshore entity, no protection, and a position size the account could never survive.
Choosing a good broker for the wrong job
A well-regulated, well-run firm that does not support the automation you need, does not offer the instruments you want, or charges swap rates that make your holding period uneconomic.
Nothing is wrong with the broker. It just is not the right one for what you are doing, and this only becomes obvious after the account is funded.
What a demo will and will not tell you
Ninety-nine of the hundred brokers we rate offer a demo, and it is genuinely useful for the platform: whether you can find things, whether the charting suits you, whether the mobile app works the way you need.
It is unreliable for execution. Demo servers usually do not reproduce live liquidity, queue position, market impact or realistic slippage, so fills tend to be flattering. Treat a demo as a test of the interface and a small live account as the only test of the execution.
Before you deposit
If any of these is unanswered, the answer is somewhere in the client agreement rather than on the website.
- Which legal entity is named in my client agreement?
- Have I found that entity on its regulator's register myself?
- Am I classified as retail, and does that classification carry protections?
- Is client money segregated, and where is it held?
- Does negative balance protection apply to my entity and classification?
- Is there a compensation scheme covering this entity, and for how much?
- What is the all-in cost on my instrument, in my account type?
- What are the overnight financing rates for how long I hold positions?
- Are there inactivity, withdrawal or conversion fees?
- Does the platform support the order types and automation I need?
- How do I withdraw, how long does it take, and does it cost anything?
- Is my country listed among the ones this entity restricts?
There is no best broker
There is the best broker for a set of requirements, and requirements differ enough that the rankings on this site are cut nine different ways. Somebody trading one lot a month cares about spread far less than somebody trading fifty; somebody running an EA cares about things a discretionary trader will never notice.
If you would rather answer questions than read comparisons, our broker finder ranks all hundred against six answers in about 30 seconds. It applies the same filters in the same order as this page.
Questions people ask about choosing a broker
What is the most important thing to check?
Which legal entity would open your account, and whether that entity is licensed by a regulator you can actually reach. Everything else can be changed by opening a different account; this cannot.
Is a regulated broker automatically safe?
No. Regulation sets rules on client money, conduct and disclosure, and gives you somewhere to complain. Regulated firms can still fail, and it says nothing about whether you will make money.
Should I pick the broker with the lowest spread?
Not on the advertised figure. Compare spread plus commission on your instrument. Advertised minimums are the best case, not the average, and 71 of the hundred we rate advertise from 0.0 pips.
Is higher leverage better?
It is a ceiling rather than a benefit, and the highest ratios cluster in jurisdictions offering the least recourse. Our ratings do not score it as a positive.
Does it matter which country my broker is in?
Considerably. It determines your leverage cap, whether protections apply, and who hears a complaint. What matters is the entity's jurisdiction, not the head office address.
Should I use more than one broker?
It reduces reliance on a single firm and adds administration. It does not diversify your market exposure, which is a different thing.
How much should I deposit to start?
Enough that position sizing is possible: on a very small account the broker's minimum trade size can dictate your risk. 85 of the hundred we rate allow 0.01 lots, which is what makes small accounts workable.
Ready to put this to work?
Our questionnaire ranks all 100 brokers against your own answers in about a minute - including, if it matters to you, filtering out the ones whose leverage and protections do not suit how you intend to trade.
Find my brokerBrowse all 100 reviews
Nothing here is financial advice. Leveraged products can lose more than they make.
Other relevant articles
How to check a broker's licenceNine steps, on the regulator's website rather than the broker's. The one that catches people out is the first: you are not checking a brand, you are checking a company, and the brand is usually several of them.
What segregated client funds actually meansEighty-nine of our hundred brokers say client money is segregated. Twenty-two of them sit behind no compensation scheme at all. Those are answers to different questions, and only one of them pays you back.
What happens if your broker goes bankruptYour money is not with a brand. It is with one specific company, in one specific country, under one specific set of rules - and which one decides almost everything about what you get back.