Wondering who is the best Forex & CFD broker in 2018? In this article, we will analyse the elements for assessment in order to choose the best Forex & CFD broker 2018. We will review all the important aspects of the best Forex broker.
The Most Important Criteria for the Forex & CFD Broker
Forex Broker Regulation – It is important to open an account with a regulated broker.
Trading Platform – Choose a broker that offers Forex & CFD trading on the platform you are most comfortable with, and that fits your needs. Check out our state-of-the-art MetaTrader 4 & 5 Supreme Edition platform!
Spreads – There's nothing wrong about searching for a broker with the lowest spreads, but watch out for marketing techniques. A lower spread advertised on the website does not necessarily mean that you will continuously have the spread.
Besides, there are ECN and STP accounts on which you pay commission to the broker. Finding the cheapest Forex broker is finding out a combination of spread, execution quality, commission, and swap. Looking for a competitive Forex broker that only offers low spreads is not necessarily the best idea, as a displayed average spread does not guarantee this spread when you place the order.
Order Execution Quality and Slippage – Having low spreads is right, having orders executed at the asking price is even better.
Allows for Scalping – If you are looking for the best Forex broker in the EU, be aware that a good broker does not put limits on trading styles. A scalping broker has no minimum distance to respect between the market price and the stop-loss and take-profit.
Forex Broker with No Dealing Desk or Dealing Desk – Depending on your strategy, you may opt to choose an ECN, STP, or No Dealing Desk broker.
Fund Security – Choose a Forex broker with bank accounts in Europe, in particular, with segregated bank accounts.
Different Types of Trading Accounts – A good broker should offer you several types of accounts: ECN, STP, or accounts with spread reductions for more substantial deposits. See our Account Types and Deposits and Withdrawals section.
Optional Leverage – Forex is a market that is often traded with leverage. To manage a trading position well, being able to choose leverage is very important.
Diversification of Trading Instruments – It is always exciting to be able to invest in several markets at the same time. A good choice is to work with a Forex broker that offers a wide variety of markets to trade, such as CFDs on indices, commodities, stocks, cryptocurrencies bonds, or ETFs.
Customer Service – Having a broker who cares for its customers is much more practical and reassuring for traders.
Education – A Forex broker is not allowed to give investment advice, but can offer trainings and education. For Forex beginners, it is essential to understand the terminology, so a broker with proper training tools is always a better choice. Admiral Markets offers several courses, including Forex 101, Zero to Hero, Masters of Trading, Price Action Trading School, and a whole library of articles on Forex and trading.
Custom Tools and add-ons - Good Forex brokers should offer a valuable support for their traders. For that reason Admiral Markets made available both the MT4 and MT5 Supreme Edition add-on for the company's live and demo accounts. These tools aim to help Forex/CFD traders make more money, with less effort.
The MT4/MT5 Supreme Edition Overview (MT4/MT5 SE)
Admiral Markets Supreme Edition is the first class package add-on that offers dozens of unique tools to empower trading decisions. No matter if you are experienced or novice traders, the MT4/MT5 SE is invaluable tool for helping you, a trader in making good trading decisions. Here is the list of tools in the MT4/MT5 SE package.
Source: MT4 SE Add-on
Have in mind that MT4/MT5 SE is client driven as Admiral Markets clients have also indirectly helped develop the tool. Some of these indicators have also been thoroughly tested by our analyst, professional trader and educator Nenad Kerkez Tarantula, so we can insure their quality. As Nenad often says, his favourite tool is Admiral Markets Correlation Matrix - the tool that is unique to Admiral Markets traders. The Correlation Matrix provides invaluable and in-depth market information across all currency pairs in different time frames. This will enable you to make informed decisions to significantly mitigate the risk involved when planning your trading.
But the Supreme Edition is not just a simple trading solution. It offers some more complex things such as very unique Admiral Renko indicator that also offers extreme customization of standard Renko indicator. For example with Admiral Markets Renko indicator you can modify:Renko block size in pips – sets the size of Renko blocksSymbol pip size – sets the pip size of the instrumentColour for up and down blocks – customises the colour of the Renko blocksDraw blocks as continuous – adjusts whether blocks are continuous or notTarget lines for next blocks – changes the style of indicator linesDraw on top of chart – decides whether Renko blocks appear in the foreground or backgroundAlerts on new blocks – sets up alerts for when new blocks are being drawnRound the starting price – decides whether the starting price should be roundedMaximum historic blocks – sets the number of blocks displayed at a timeBuild Renko data from history period – decides the time-frame over which the Renko indicator is calculatedCSV/TSV log – decides whether to keep a log file by inputting a file name and choosing a format.
Also it is worth to mention that Admiral Markets Supreme Edition has been continuously updated with new tools despite the award that has established MT4 SE as the best addon in the Forex and CFD business.
For a quick overview what MT4/5 SE has to offer, please read the article ''MT4 Supreme Edition Indicator Package''
Beware of False Information and Privacy Violation
Unfortunately, many people incorrectly associate Forex trading with scams.
The problem is the increasing number of unscrupulous companies marketing false information. The number of Forex-related scams has significantly increased over the last few years, so it's important for you to be able to identify a hoax.
After all, Forex trading should be a potentially profitable experience.
When traders register with a particular broker, they expect their personal data to be protected, i.e., not passed to third parties.
When someone you don't know rings your personal phone number, for example, the entity that gave your information to them has violated your privacy.
Because you haven't enabled your data to be publicly available. Some brokers even buy stolen trader database's, so they can contact the listed people worldwide.
Regulated Brokers: How to Find an FCA Regulated Broker?
The first thing you need to check is if your broker is regulated by the Financial Conduct Authority (FCA). Today, there are many scams on CFD trading websites, and very often these sites have regulations that are not very rigorous or they are not regulated at all. With the European passport, any financial company registered in one of the countries of the European Union has the right to offer brokerage services in other countries without the need for additional agreements.
One of the strongest European authorities is the FCA.
If you are looking for the best Forex brokers online, a professional looking website does not guarantee that the broker is a trusted one. The advantage of a UK broker is the Financial Services Compensation Scheme (FSCS), a system that guarantees the customer funds in the amount of GBP 50,000 should the broker go bankrupt. The FSCS is the compensation fund of last resort. They also protect banks and building societies, credit unions, insurances, etc. That's why having a good UK broker should be your first choice when you decide to trade.
Types of Forex Brokers
We can distinguish several types of Forex brokers according to several criteria. Depending on their client base, Forex brokers can be divided into groups for:professionals and eligible counterparties non-professionals
Depending on the execution of orders, there are:Dealing desk Forex brokers No dealing desk Forex brokers (STP or ECN) Hybrids
Depending on the trading platforms on the exchange rate, we can have:MT4 Forex brokers MT5 Forex brokers Brokers with a proprietary platform MT4/MT5 brokers
Generally speaking, there are DD (Dealing Desk) and NDD (No Dealing Desk) brokers. NDD brokers include:STP ( Straight Through Processing) ECN (Electronic Communication Network) Hybrid (ECN+STP).
We usually refer to DD brokers as market makers. The infamous term "market makers" is used because these brokers usually take the opposite side of traders' trades. They make money through spreads and by providing liquidity. They also try to find a matching long or short order from their other clients before taking a countertrade or passing it on to a liquidity provider. They are known to offer artificial quotes, and orders are filled on a discretionary basis.
No Dealing Desk
Contrary to DD brokers, No Dealing Desk brokers don't pass their orders to a market maker or liquidity provider. They use both the STP and ECN technologies without a dealing desk and route trade orders directly to liquidity providers. It allows clients to access real markets with better and faster fills. It is a bridge between clients and liquidity providers, and there are no requotes when an order needs to be filled. We differentiate between two types of NDD brokers: the STP and the ECN.
The STP, or Straight Through Processing, technology requires no dealing desk. All orders are routed to the broker's liquidity providers, and prices are executed at the bid/ask rate provided by liquidity providers. Liquidity providers in this case are hedge funds, big banks, and investors that effectively act as counterparties to each trade. Usually, the STP broker has an internal liquidity pool that is represented by different liquidity providers that compete for the best bid/ask spreads for STP broker orders.
In a broader sense, STP means that the broker company plays the role of a silent connection provider between the market and the trader, rather than a dealing desk, re-processing trades. Please note that Admiral Markets uses the STP model exclusively.
The other benefit of an STP broker includes the so-called DMA. DMA stands for Direct Market Access. What it does is passing their client orders directly to their liquidity pool, so orders are filled at the best possible price with only a small mark-up spread by the broker.
You should always aim for the broker with variable spreads. The reason is that the broker with a variable spread is able to pick the best bid from one of the liquidity providers from their own pool and the best ask spread from another liquidity provider. That effectively offers the best possible spread for their clients. The STP execution simply goes without any requotes and due to its lightning speed, it is very suitable for traders who like to scalp and trade the news.
A few years ago, the MT4 ECN seemed excessive. In fact, the initial reaction to this concept was that it seemed like something impossible. If a Forex trader wanted to use the standard platform, they were supposed to trade solely with one broker. Nonetheless, the demands of the retail Forex trader ultimately became heard, and MT4 ECN was developed.
There are a lot of similarities between the STP and the DMA, but the primary difference is routing. As mentioned above, the STP can choose to deal with different liquidity providers out of their liquidity pool, while the ECN acts as a form of hub. The hub acts effectively as the major liquidity source as it is represented by banks, hedge funds, and all the big market players. They all get interconnected in order to find counterparties for the orders they are unable to handle internally. Another difference between the STP and the ECN is that ECN trading is mostly capped at 0.1 minimum lot size. It is because there are very few liquidity providers allowing for less than 0.1 lots, which proved to be difficult for inexperienced traders who need to trade with smaller amounts of money (1-2k), so a hybrid model has been developed.
This is a combination of both the ECN and the STP. Usually, with this type of service, brokers are able to focus on providing great customer service, education – that is extremely important – and different market analyses. Blending the ECN or the DMA and STP models allows for a fully electronic Forex dealing service. This popular mix allows a Forex broker to fully automate the order entry, dealing with spread pricing and trade execution aspects of their deal execution business.
We think that both the ECN and the STP model are great. At this point, possibly the best model is the STP, although the hybrid model through NDD is also an excellent choice. Have a look at the list and explore the additional features of trading account types!
Applying the STP and the ECN models, brokers avoid market making. It is a win-win situation for traders and brokers alike. Brokers don't want us to lose because they might earn more from spread or commission the longer we trade with them.
Forex Broker Comparison – Forex Broker Ranking
As discussed earlier in this article, you will find a lot of reviews on Forex brokers and all kinds of online Forex broker rankings. When it comes to online CFD trading, you should always trust yourself. According to our award winning analyst, educator, and full-time trader Nenad Kerkez: "Always trust your own guns". It is better to test the services of a regulated FCA Forex broker than to trust someone blind.
Admiral Markets has won the awards in several categories:Best Sell-Side Analysis 2018 by FXstreet.com Best Video Podcast 2017 by FXstreet.com Best Forex Broker 2018 and CFD Broker 2018 in Germany "Best Service" CFD Broker 2017 by the German Institute of Customers (DKI) Best Forex Educator 2016 by UK Forex Awards FxCuffs competition 2015 and 2016
Admiral Markets UK Ltd. is a regulated broker, and you can read reviews of our services on the well-known FPA website. This would sometimes be a bit subjective, so it's up to you to make up your mind and test our services on a Demo account first.
If you have any comments, feel free to comment in the section below!