Once a trader is ready to start trading, the next thing that he begins to look for is a good platform or broker to start trading with. Though it may sound easy to start with any forex trading platform, things are not so straightforward in the forex world. The forex trading industry has been around for so long that there are several hundreds of platforms and brokers to choose from.
Also, unlike the stock exchanges that are restricted to specific instruments in that exchange for that country, the forex instruments are available all around the world on different platforms which means that the choice available for the forex traders is huge. Most of these forex instruments are CFDs and it’s important for the traders to understand how CFDs work and whether you understand the difference between CFDs and spot and other types of trading before you begin trading. This is very important as it is generally believed that if you do not understand, then many accounts are likely to lose money when trading CFDs. Though this may not always be true, it is always good to know what one is trading before venturing into actually trading it.
Here are the Best Online Brokers for Forex Trading in 2021:
Though this list may not be comprehensive, this is a very small list of brokers who have been around for a long and hence can be trusted with your funds.
This company is one of the biggest brokers in the world who has a wide variety of instruments for the trader to trade from. The broker is regulated in different jurisdictions which means that it has regulatory oversight and hence your funds are relatively safe.
But as with any other platform, it is important that you fully understand the risks involved and make sure that you do your due diligence and refer to reviews from your trading circles before making a decision. The commission charged by the broker depends on the trade volume and also on the arrangement that you have with the broker but it generally varies between 0.08 to 0.2 basis points and the account minimum is $0 which basically means that you can open an account for free and there are no charges for you for keeping the account open.
This is also one of the large brokers in the world and has been around for a long time which also means that it has been doing pretty legitimate business along with providing good service which is why traders continue to trade on this platform and the broker continues to grow and evolve.
They are one of the best forex brokers for a long time and have been known to be the best forex broker for EURUSD, GBPUSD, and gold as well. You have to understand that gold need not be traded only from the Commodity futures trading commission but can also be traded at any number of brokers around. The same holds good for silver and other commodities as well.
This broker is also authorised and regulated in several jurisdictions and this should be one of your main considerations while choosing a platform to trade with. They have different types of accounts to choose from which include those where the charges are included in the spread and those in which it is charged as a separate commission. Both these charges vary widely depending on the trading volume and what type of terms that you can negotiate with your broker.
There are a lot many other brokers out there but that is beyond the scope of this article. We will discuss a couple more as we go along but what is important is to make sure that your funds are safe with the platform and whether they handle your deposits and withdrawals promptly and properly.
It is always better to read the reviews and the ratings online from various other brokers and then make a wise choice. You can also refer to video reviews of the brokers on youtube and other places while making a decision. If the broker says that he is regulated by the financial conduct authority, then it is always better to get their registration number and check it directly on the FCA website to make sure that what they are claiming is true.
There are also brokers who claim to be regulated in exotic locations like the Bahamas and though such regulations do not hold much water, that doesn’t make them useless as well. In such cases, it is better to rely on the reviews and ratings online before making a decision.
What is the Best Forex Trading Software?
Brokers all around the world have multiple platforms from which you can trade from. Some have only one or two platforms to trade from while others have many. Likewise, some brokers have their own software that they have built while others rely on third-party trading software makers and buy the license from them.
One of the most famous retail trading platforms, which you are also very likely to have come across is Metatrader 4 or MT4 in short. This is one of the most used trading platforms in the retail world and has been around for well over a decade. It is used by a lot of retail traders as its UI is very easy and intuitive and it is also very easy to understand the different parts of the platform. It also has a very good charting system that hasn’t yet been matched by most other platforms.
This platform has been developed by a Russian company and most of the forex brokers out there take a license from the company to use the software. Over the last few years, they have also released a new version of the platform which is called MT5 and though initially, the traders were pretty much reluctant to make the transition from MT4 to MT5, we are seeing the transition in a slow and steady manner in the recent times.
There are also other trading platforms like Ninja Trader, ProTrader, and others and each has its own set of advantages and disadvantages. These are also developed by 3rd party trading software companies and many brokers have taken licenses for these platforms as well. There are some other brokers like FXCM and others who offer their own trading platforms as well and it is totally up to the trader to decide on which ones he is comfortable with and choose that platform. This is a very important consideration for any trader as trading by itself is a very challenging proposition and he does not want the platform or any other thing to present even more challenges and make it very difficult for him.
Things to Consider When Choosing a Forex Trading Platform
There are many things that you need to take into consideration while choosing the right broker for you. The best forex trading that you can do can happen only if you are with the right platform that is in sync with what can do and cannot do and is something that you are comfortable with. Of course, the factors for consideration vary from trader to trader but we will try and state the overall factors that you must be having an eye on while not all of these factors might be right for you.
One of the main considerations is the reliability of the broker. This is by far the most important one. As the forex broker market has proliferated over the years, so has the number of scams as well and this has made it very difficult for the trader to choose the right broker. If your friends and fellow traders are already using a platform that they find reliable, it is best that you go with the same. Else, it is better to refer to the online reviews and ratings for the broker before making the decision.
Next is the currency pairs that it offers to make sure that it has the ones that you are planning to trade-in. If they do not, then there is not much choice but to find some other broker who has. Of course, you may also have highly specific decision points like what types of accounts are provided by the broker, what is the account minimum, what are the charges and fees and things like that and the decision for this depends on the individual trader.
You should also see what kind of educational resources that the broker offers as this would be useful as you trade. The process of learning is a never-ending one and there are times when you might want to do some reference or might want a different perspective to things that you already know. At such time, it is easy and important for you to have access to educational material at the brokerage so that you can use them as and when needed.
Then comes the question of what kind of customer support that the broker provides you with. The best forex trading platforms generally get such a status mainly due to the fact that their customer support is top-notch. If a broker is able to achieve this, then the rest of the things go into the background for the traders as such.
Best Forex Brokers by Jurisdiction
We do not want to go into details of each jurisdiction to pick out the right ones and the top forex trading broker in that jurisdiction as this is a vast study. But the reason why we have to consider this is to stress the importance of the broker being regulated and authorized and you should consider whether you understand how the brokers and their relationship with the regulators can affect your trading.
If the platform is regulated by some well-known entity like the FCA in the UK, then there need not be any second thoughts in trading with them. But the challenge in such cases could come from the FCA itself as they ensure that the brokers regulated by them take in only those clients who satisfy their criteria which includes having valid KYC, specific account and trading limits, and other such considerations. Most of the traders who are just starting out trading and want to test out their trading skills with a small account may not fit most of the criteria specified by the FCA and so such brokers may be out of the question at that time.
There are other jurisdictions that have also been doing a good job of maintaining control over the platforms that they regulate and these include Cyprus, Australia, and others. The regulatory authorities in these countries have done a good job, especially in recent times, ensuring that those who have been licensed by them have stuck to what they are supposed to do and do not mislead or scam their clients. As long as the regulators do this job and maintain the licensed entities on a tight leash, then it becomes easy for the clients to just choose the broker that they want to trade with.
Trading Forex with an ECN
You might have come across a lot of brokers and platforms that advertise that they have ecn accounts which the trader can use and they also claim very low spreads in these and they charge you a commission as fees. What these ECN accounts are supposed to be is that these are supposed to be directly connected to the liquidity providers and prime brokers and your traders are supposed to be directly cleared by them which means that you can get spreads that are very low directly from them and it also means that you traders would be cleared very quickly and in a smooth and reliable manner even during volatile times and irrespective of the size of your traders.
This is what an ecn account is supposed to do and till a few years back, these were applicable only for large accounts as they were the ones who could afford the charges and also they were the ones who really needed quick and reliable clearance of their large trades. But over the years, such accounts have got diluted which means that now, even very small accounts can get access to ecn though frankly, it doesn’t make much sense. Of course, it is always good to directly get cleared by the prime broker but even they wouldn’t be too interested to clear small trades of micro lot sizes. This then brings the question of whether these accounts are really ecn and whether they are being advertised so and what happens behind the scenes is something that is totally different. This is a question that only the brokers can answer and it is best for the trader to seek independent advice about such brokers and accounts as it is your money at stake.
Saxo Bank : Best App and Web Platform for Forex
One of the other major forex brokers out there is Saxo Bank. They also have been around for quite some time and are well established in a lot of jurisdictions and though they have the word ‘Bank’ in their name, they are not yet a bank, at least not in terms of being able to provide savings accounts and credit cards and other such similar products. Many traders would vouch that this is the best broker to trade forex in.
But they are indeed a very large broker with a variety of trading platforms to choose from. They also have a mobile app which the trader can use and a web platform as well which means that he can open the platform from any mobile or laptop wherever in the world he is, which is the ultimate aim of any forex trader which is to be able to trade from any part of the world using any laptop or mobile.
Wrapping Up: Which is the Best Forex Trading Platform?
Well, there cannot be any specific and objective answer to this question as to the requirements of what the best forex broker is, depends on the trader who is actually going to be trading. For some, being able to deposit and withdraw on time every time would more than suffice for them to classify a broker as a good one while others would prefer to have very good trading conditions at the broker like tight spreads, direct connection to the prime broker, being able to execute large trading without the fear of being slipped every time and other such similar factors.
So, it is indeed best for you to do your own diligence. Make a list of all that you look for in a trading platform on the other hand and the list of good trading platforms as suggested by your friends and others online or offline. Once you have both lists, then it is easier for you to choose the right broker so that you are comfortable trading with them. Though this kind of decision-making may be cumbersome, you have to remember that if you do manage to become a successful trader, then this platform is likely to be the one that will come with you throughout your trading career and could play a major role in your continued success.
So do not feel that this process of choosing the right broker is a small task but give it the importance that it deserves and make sure that you are happy with the one that you decide. Of course, you always have a choice of moving to some other broker if you feel that what you have chosen isn’t the right one or your account size begins to grow and so you might feel safer at some other broker to handle your larger trades.