Safest Forex Brokers

Richard Montana | November 15, 2022

If you want to trade forex online, you will need to open a trading account with a forex broker. With thousands of forex brokers to choose from, it is important that you don’t get involved with a scam. There are some important things to be aware of which can help you to separate the safe forex brokers from the unscrupulous companies who are trying to take advantage of novice traders. Even the most experienced of traders can get caught out with the more innovate ways bad brokers are deceiving customers. This guide aims to help you identify the most trusted forex brokers so you can focus on your trading without worrying about the safety of your broker.

How to find a safe forex broker?

There are many things to consider when looking for the safest forex broker. Whilst your ultimate choice may depend on the products and features you require, there are a few important things that I would not compromise on which are as follows.

Regulation

The very first thing that I look for when reviewing a forex broker is if they are regulated. When you trade forex with a regulated broker you have some protection if things were to go wrong. You can also get peace of mind knowing that a regulated forex broker must comply with the strict rules and procedures that have been put in place to protect traders and investors alike.

This does not automatically mean that all unregulated forex brokers are bad. Some brokers choose to stay unregulated because they might offer certain forex trading products and services that a regulated brokerage firm cannot. This means they can target a specific trader such as those looking for high leverage or cryptocurrencies.

It can be expensive to get regulated, which may be another reason which does raise some questions in itself in terms of broker capital. At the very least, I would expect an offshore regulated forex broker rather than no regulation at all.

History

Once I have confirmed a forex brokers regulatory status, I like to see when they were founded. In general, I would feel more confident using a broker that has been in the industry for many years. I mean with so many brokers coming and going all of the time, it only makes sense to me to use an established and industry leading broker.

Trust

People are often quick to complain when things go wrong and rightly so. This is why you will find forex brokers can often take quite a beating online when it comes to broker reviews. If a forex trader is having a great experience, they are probably too busy trading to write a review.

Regardless, if you see a particular broker has many bad reviews and ratings, that might be a sign. Instead, you could look for a trusted forex broker that has lots of honest positive feedback. Just be wary that some so-called review websites allow feedback without verification which can lead to misrepresentation.

What is the biggest risk in forex trading?

Now you have an idea of some key points to consider when looking for a safe forex broker, lets take a closer look at some of the risks involved with forex trading that you should be aware of.

Leverage

Yes, leverage can be a good tool when used wisely. The problem is that many beginners do not understand what it is or how it works. This means that they end up using high leverage and taking over leveraged positions that will eventually cause a margin call and blow their account up. People are then quick to blame the broker for provided such high leverage, when it is the trader who used it in the first place.

Granted, regulated forex brokers usually have some restrictions on leverage which I think is a good thing as it can protect the average retail trader from themselves. Just make sure that you do plenty of reading up on leverage to understand it completely before you even consider trading forex with leverage positions.

Execution

There are a few different types of forex broker, each with a different execution policy that can have a significant impact on your trading. If you keep getting delays on your trades, your results may suffer. This is especially the case with day traders and those using scalping strategies that are spread sensitive.

There are ECN forex brokers who have no dealing desk execution and send your trades directly through to the market without any interference. Then you have market maker brokers who do have a dealing desk which can cause slippage on orders during peak times.

There is the possibility that there could be a conflict of interest if you are using a broker that can take the opposite side of your trade rather than giving you direct market access.

Security

In terms of security, this applies to the strength of the broker and security protocols that they implement. If you are using a well-established broker that is regulated and has a large client base, they are likely to be in a decent financial position. This can provide more security when compared to a forex broker that is just about balancing the books.

The other aspect of broker safety to consider is whether they have the required security in place to prevent unauthorised access. Some brokers will require two-factor authentication (2FA) which is an identity and access management security method that requires two forms of identification to access resources and data.

What is the safest way to trade Forex?

Not only is important to choose a safe forex broker, that is only half the battle. The other half is down to you and how you trade the forex market. You can have the safest forex broker in the world, but if you are using high leverage without a stop loss and trading against the trend, you are asking for trouble. Here are a few quick tips for safe forex trading:

  • Do your research and learn as much as possible
  • Analyse currency charts in detail to take informed decisions
  • Practice on a demo account until you are consistent
  • Use sensible money management including a stop loss
  • Only trade small position sizes when you start trading live
  • Do not use dangerous leverage
  • Have a forex trading plan and stick to it
  • Control your trading emotions (fear, anger and greed)
  • Remain as disciplined as possible
  • Try to learn from your mistakes
  • Do not expect to become a millionaire overnight
  • Avoid any forex service that makes guarantees
  • Never risk more than you can afford to lose

Who is the most reliable forex broker?

I cannot say for sure who the most reliable forex broker is because things can quickly change in this industry. However, based on how long they have been in business, regulation, awards and reputation, these are some of the safest forex brokers from my own experience.

Broker
Rating
Regulated
Min. Deposit
Founded
Max. Leverage
1.
AvaTrade Review

ADGM FRSA, ASIC, BVIFSC, CBI, FFAJ, FSCA, IIROC, JFSA

$100

2006

1:400

Between 74-89% of retail investor accounts lose money when trading CFDs with this provider.
2.
IG Review

ASIC, BaFin, CFTC, DFSA, FCA, FINMA, FMA, FSA, FSCA, JFSA, MAFF, MAS, METI, NFA

$250

1974

1:200

Between 74-89% of retail investor accounts lose money when trading CFDs with this provider.
3.
Pepperstone Review

ASIC, BaFin, CMA, CySEC, DFSA, FCA, SCB

$200

2010

1:400

Between 74-89% of retail investor accounts lose money when trading CFDs with this provider.
4.
IC Markets Review

ASIC, CySEC, FSA, SCB

$200

2007

1:500

Between 74-89% of retail investor accounts lose money when trading CFDs with this provider.
5.
XM Group Review

ASIC, CySEC, DFSA, IFSC

$5

2009

1:888

Between 74-89% of retail investor accounts lose money when trading CFDs with this provider.
6.
City Index Review

ASIC, FCA, MAS

$100

1983

1:200

Between 74-89% of retail investor accounts lose money when trading CFDs with this provider.
7.
Markets.com Review

ASIC, BVIFSC, CySEC, FCA, FSCA

$/£/€100

2008

1:300

79.90% of retail investor accounts lose money when trading CFDs with this provider.
8.
Forex.com Review

ASIC, CIMA, CFTC, FCA, FSA, IIROC, JFSA, NFA, SFC

$100

2001

1:50

Between 74-89% of retail investor accounts lose money when trading CFDs with this provider.
9.
Plus500 Review

ASIC, CySEC, FCA, FSA, FSCA, FMA, ISA, MAS

$100

2008

1:30

79% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
10.
Admirals Review

ASIC, CySEC, EFSA, FCA

$1

2001

1:500

Between 74-89% of retail investor accounts lose money when trading CFDs with this provider.

Conclusion: is forex trading safe?

Yes, forex trading is safe if you know what you are doing and have a plan in place. If you rush into things without doing proper research and due diligence, you can and probably will get burned. I think it is imperative for anyone who is thinking about trading online to start with a demo account at first. You can get a free forex demo account from most forex brokers. This will allow you to practice your trading strategies and build your confidence before investing. It will also enable you to try and a forex broker to make sure they are safe whilst having the trading conditions required according to your own needs.

About the Author

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Richard Montana
Richard has many years of experience in broker research, testing, analysis and reviews. He knows what to look for through years of trading himself with different brokers and listening to the feedback of others.

Review Methodology

For all of our broker reviews, we research, validate, analyse and compare what we deem to be the most important factors to consider when choosing a broker. This includes pros, cons and an overall rating based on our findings. We aim to help you find the best broker according to your own needs. You can read more about our review process.


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