Last update 2020.08.11
There are lots of different types Forex Brokers on Internet, they offer similar services but with different rules and limits for fx traders.
Searching on the internet, it’s not easy to find an article that clearly explains this matter in a comparable manner. So, it is what we want to do here. Present the different types of Forex Brokers to help traders understand their differences and benefits.
If you Google “forex broker” or “forex trading broker” it will give you back around 5.570.000 results. So, the task of choosing one of them to start trading in forex is not always easy. We evaluate some of the most relevant aspects about choosing one, as we are going to present.
How much you pay to operate forex?
Forex brokers make money in a variety of ways. It means that they usually charge the client spread, trading commission and other fees. It is not easy to compare, because each broker uses different rules to charge customers. I tried to make them comparable by using AUD/USD Forex pair every time it was available as example. Other times I used average spread presented in the website.
How much risk they allow in trading?
Other relevant information is the leverage. Leverage involves borrowing a certain amount of the money needed to invest in something. In the case of forex, money is usually borrowed from a broker. Forex trading does offer high leverage in the sense that for an initial margin requirement, a trader can build up—and control—a huge amount of money. It means the amount of risk each broker allows you to take. The results of a position with 30:1 leverage is quite different from one with 500:1 leverage.
Margin-Based Leverage = Total Value of Transaction / Margin Required
For example, if you are required to deposit 1% of the total transaction value as margin and you intend to trade one standard lot of USD/EUR, which is equivalent to US$100,000, the margin required would be US$1,000. Thus, your margin-based leverage will be 100:1 (100,000/1,000). For a margin requirement of just 0.25%, the margin-based leverage will be 400:1, using the same formula.
What regulators says about it?
We check if they are registered in the main forex regulatory agencies worldwide. Using ASIC search, FCA and others when necessary. It is very important to safely invest your money, because those agencies stablish the best practices on forex trading services. They can mediate conflicts between brokers and traders if necessary.
It is also important because it exists a really big number of clones of registered companies. You must be aware: even on specialized websites, you may find some not totally accurate information.
Do they require Minimum investments?
Some of the Forex Brokers have minimum amount to deposit before start trading. Others (a few) charge small withdraws.
I do not mean to be exhaustive, because there are lots of forex brokers, but I think you may have a good place to start trading. I covered the most award winning brokers in the last years and tried to make them comparable.
The best way to trade forex
There are two ways to invest with our AI in forex:
1. Automated with AI-Trading. Check out the 3 steps to trade automated with our AI.
Don’t you have a broker account yet? Our AI is integrated to trade automated with the broker Oanda. Click here to open an account.
2. Manually with AI-Signals.
Wiseinvest also provides AI forex signals that perfectly fit into MT4, MT5 and any trading platform. To trade with our AI forex signals, you must simply copy the data you receive from each real-time signal into any forex brokerage account of your choice.
There are five unique variables for each AI signal, and each must be copied exactly, in order to match the performance of the signal as close as possible.
Each AI signal alert consists of the following five data points:
- Symbol (forex pair)
- Direction (long or short)
- Position size (number of units or lots)
- Take profit (price level to exit with maximum gain)
- Stop loss (price level to exit with maximum loss)
You can trade forex with our free forex signals clicking here, or with our Premium subscription that provides you unlimited AI signals and automated AI trading in partner brokers. Whether you are a beginner or a Professional forex trader, our AI trading system can help you save time and improve your trading performance. Get started with free AI.
When investing through Wiseinvest automated AI trading or AI forex signals, you do not need to calculate or change the leverage in your forex broker account. Learn more about leverage in forex trading clicking here.
- There are many Forex Brokers on Internet, but if you want to trade automated with Wiseinvest AI, we suggest oanda.com.
- To trade with forex signals, we suggest the use of our AI-Signals solution on the broker xtb.com.
- One of the most important information about the Forex Brokers are the minimum and average spread, commission and other costs involved you pay in each position.
- It is important to check supportive tools offered, such as leverage.
- Be careful about the ways to bring your money back to your pocket, some brokers can charge small withdraws or restrict the manners to do it.
The Forex Broker is your pathway to earnings. You need to choose wisely this very important service provider.
Disclaimer: Forex and Contracts for Difference (CFDs) are complex instruments and come with a high risk of losing money due to leverage. Forex trading is not suitable for everyone. You should consider whether you understand how forex and CFDs work and whether you can afford to take the high risk of losing your money.
The forex brokerages displayed shall disclaim the overall performance of traders in their platforms. Oanda warns that 76.8% of retail forex traders lose money trading CFDs. XTB warns that 80% of retail forex traders lose money trading CFDs. The forex broker Fxcm warns that 69.66% of retail forex traders lose money trading CFDs.
The performances aforementioned are not related to Wiseinvest AI forex trading and AI forex signals system. You can check the performance of our AI forex system on our dashboard.