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ForexBob
Broker guide

How to choose a forex broker

Your broker holds your money and fills your orders, so it matters more than any indicator. This is the checklist we use before we open an account anywhere.

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1. Check the regulation yourself

Start here and don't skip it. A regulated broker has to keep client money separate from its own, report to a regulator and follow rules on how it treats retail clients. An unregulated one only has to follow its own terms, which it can change.

Don't take the logo in the website footer at face value. Copy the licence number and look it up on the regulator's own register. Clone firms that copy a real broker's name and licence number are common.

  • Canada: forex and CFD dealers must be registered with the provincial securities regulators and be members of CIRO, the Canadian Investment Regulatory Organization. You can check a firm on the CSA's national registration search at aretheyregistered.ca. Accounts at CIRO member firms are covered by CIPF within its limits.
  • United Kingdom: the FCA register.
  • Australia: the ASIC professionals register.
  • European Union: the national regulator, for example CySEC in Cyprus.
  • United States: the NFA's BASIC search. US residents can only use brokers registered with the CFTC and NFA.

Many large brokers run several companies under one brand: a tightly regulated entity for some countries and an offshore one for everyone else. Check which entity your account would actually be opened with. It is written in the client agreement.

2. Work out the real cost of a trade

Advertised spreads are the best case. What you pay is the spread you actually get at the times you trade, plus any commission, plus swap if you hold positions overnight.

  • Spread: compare the typical spread on the pairs you trade, during your session, not the minimum. Gold and the crosses often cost several times more than EUR/USD.
  • Commission: raw-spread accounts charge a fixed commission per lot instead. Add it to the spread before comparing accounts.
  • Swap: the overnight financing charge. It adds up on swing trades.
  • Slippage: around news, your order may fill at a worse price than you asked for. That is normal, but it should go both ways.

Our pip value calculator turns any spread into a cost in your account currency, so you can compare like for like.

3. Platforms and execution

Make sure the broker offers the platform you want to use, whether that's MetaTrader 4, MetaTrader 5, cTrader or the broker's own app. If you plan to run an Expert Advisor, check that automated trading is allowed and that the server is reasonably close to where your VPS runs.

Open a demo account and place a few orders at a busy time, like the London open or a data release. Watch how fast orders fill and how far the spread widens.

4. Deposits and withdrawals

Getting money out is the real test. Before you fund an account properly:

  1. Read the withdrawal section of the terms: methods, fees, minimums and processing times.
  2. Make a small deposit, place a couple of trades, then withdraw part of it.
  3. Note how long it took and whether anyone tried to talk you out of it.

Withdrawals normally go back to the method you deposited with. Expect to verify your identity once. That is a sign of a regulated broker, not a problem.

5. Protections for retail clients

  • Segregated client money: your funds are held apart from the broker's own.
  • Negative balance protection: you can't lose more than your account balance. It is standard for retail clients in the UK, the EU and Australia. Elsewhere, ask.
  • Leverage limits: high leverage is a marketing feature, not a benefit. Regulated brokers cap it for retail clients, and you can always choose to use less.
  • Compensation scheme: CIPF in Canada, the FSCS in the UK and the ICF in Cyprus pay out up to a limit if a member firm fails.

Red flags

  • Bonuses that lock your deposit until you trade a certain volume.
  • An "account manager" who calls to push you to deposit more or trade bigger.
  • Guaranteed returns, or managed accounts that promise a fixed monthly profit.
  • No licence you can verify on the regulator's own website.
  • Withdrawals that are slow, refused or met with new conditions.

We don't list partner brokers on this page at the moment. If we add broker links in future, we will say clearly which ones are partner links that may earn us a commission. The checklist above stays the same either way.

Not sure about a broker you're looking at? Get in touch and we'll tell you what we would check.