There are many Brokers out there and I could not possibly review even a fraction of them, but there are a hand-full of Brokers that come highly recommended by many professional traders. We will be looking at some of the best ones that meet the following criteria. They should:
How do these Brokers make their money?
Let’s look at an example: If you buy one US Dollar from a Foreign Exchange Bank using Euros you will, let’s say, pay 0.70 Euros for that dollar. If you immediately (without the currency values changing), sell the Dollar back, you only get 0.69 Euros back. This difference between the “bid” and “ask” price is called the spread and that’s also how Brokers make their money. When you make a trade, the Broker will charge you the difference between the bid/ask price. It's a very small chunk of every transaction you (or your EA) make and it's almost always a much smaller amount than taking a % commission. We're talking a few cents or less here per transaction... I will go as far as to say that it’s negligible and you don’t even need to worry about this when trading.
So let's continue with the review:
1. Gallant FX
Gallant FX is a Foreign Exchange liquidity provider that offers a wide range of trading technologies and services. Their position as a liquidity provider allows you to take full advantage of transparent real-time pricing. This has enabled Gallant FX to create a unique Forex Trading environment that offers individual traders the same STP (Straight Through Processing) liquidity, execution and trading functionality demanded by interbank traders. There is a strong recommendation from many professional auto-traders that this is the preferred Broker for FapTurbo as well as other EAs. GallantFX is my first recommendation and I'm currently using them with FapTurbo. You can see my live stats (on a Demo account off course) at the top of my Blog sidebar. Funny enough when you activate your FapTurbo on a demo account in the member's section, you'll notice that in the example they use an account number that starts with 208813x. That is the account number created when opening a Demo account with GallantFX...
Benefits:
2. Alpari (UK)
Alpari (UK) provides institutional-level online FOREX trading services and technologies. They offer comprehensive market analysis and educational tools, as well as delivering world-class customer service. Alpari(UK) should not be confused with Alpari(USA). I personally would not recommend Alpari(USA) for several reasons. Alpari(UK) is quite popular amongst professional auto-traders.
Benefits:
3. FastBrokersFX
FastBrokersFXs' trading platforms are built on a solid, fast and efficient back-office infrastructure designed for one specific purpose – to let you trade. The pool of liquidity available gives you the freedom you need. While market conditions allow it, scalping, news or swing traders are welcome at FastBrokersFX. Their policy is simple: Trade the way you want! They come highly recommended by many well respected professional traders.
Benefits:
How Electronic Communication Networks or ECNs Work
ECNs pass on prices from multiple market participants, such as banks and market makers, as well as other traders connected to the ECN, and display the best bid/ask quotes on their trading platforms based on these prices. Unlike fixed spreads, which are offered by some market makers, spreads of currency pairs vary on ECNs depending on the pair's trading activities. During very active trading periods, you can sometimes get no ECN spread at all, particularly in very liquid currency pairs such as the majors (EUR/USD, USD/JPY, GBP/USD and USD/CHF) and some currency crosses. Brokers that use Straight Through Processing (STP) offer somewhat similar benefits.
About The Financial Services Authority (FSA):
The FSA is an independent body that regulates the financial services industry in the United Kingdom. The FSA has been the single regulator for financial services in the UK since December 2001, when it was given statutory powers by the Financial Services and Markets Act 2000 (FSMA 2000).
All companies regulated by the FSA are obliged to meet strict financial standards including capital adequacy requirements. Companies are required to submit financial reports to the regulator on a regular basis. The FSA has the right to fine companies and/or terminate a company's regulatory status for violations.
The regulations require that the Broker:
Brokers in different Countries are regulated by different financial authorities (some are un-regulated - stay away from these!) When choosing a Broker it is best to choose one that is regulated by a financial services authority. Although these brokers often operate under more limited conditions, you can at least know that they are properly audited and regulated. This will give you peace of mind that your funds are safe and that the Broker does not "cheat" you.
Risk Warning:
Before deciding to participate in Forex trading, you should carefully consider your investment objectives, level of experience and risk appetite. Most importantly, do not invest money you cannot afford to lose. Please be aware of the FOREX risk. Only invest money that you can spare and that will not change your lifestyle if you lose all your money. There are no guarantees in this industry, but with lots of research and help from you we can find trustworthy systems that will give us peace of mind and a steady stream of income!
Always start with Demo Accounts. You can open as many as you like for free and test them for as long as you like until you feel comfortable going live with real cash. To manage exposure, employ risk-reducing strategies such as 'stop-loss' and 'take-profit'. These strategies are built into most EAs, especially the ones I will be reviewing on this Blog. You can manually set these variables to lower amounts until you are comfortable with the performance of your EA. A good EA should earn high profits (more than 70% profitable trades).
If you are a beginning trader, I recommend not changing the default values that are already set when you install your EA, unless the developers notify you of new settings, or if you are getting advice from a trusted source.
There is Forex risk associated with utilizing an Internet-based trading system, including the failure of hardware, software, and Internet connection. If you're using MetaTrader, I suggest you have a dedicated trading desk at home or work and that you PC is running 24/7 with a live internet connection. Remember your EA has to constantly analyse market movements to make successful trades. If you don't have this sort of set-up available I suggest you look into having a Forex enabled Virtual Private Server (VPS) service that will run MetaTrader on their server 24/7 so you don't need to worry about down-time. We will have a look at this in the next article.
Conclusion:
At some stage, after having tested your system and being happy with it's performance, you may want to go live. Be sure you do this with the same Broker that you tested on. Results can vary significantly between Brokers! Before opening a demo account with your Broker of choice, please make sure that you can eventually open a live account with them from the Country you live in. Do this before you start, you don’t need the disappointment of finding out you can’t, after two months of successful trades on your demo account!
Some brokers require a very high minimum deposit for you to be able to open a live account. Although I rather stay away from these, you might have your own reasons for choosing such a Broker. If this is the case and you are getting the best results with your EA using one of these Brokers, you can sometimes get around this by depositing the minimum amount and then withdrawing some of it afterwards. I'm not sure if all Brokers allow this but I know some do. Do some research to find out if you can get away with it, although I would still recommend using one of the Brokers listed above. Start small and work you way up, baby steps!
I have posted the links to these Brokers' Websites on my menu-bar at the top of the Blog.
- Be newbie-friendly
- Offer great support and good training material to guide you, the beginning Forex trader, in the right direction to become successful.
- Welcome automated EA (Expert Advisor) trading and don’t cheat you on their side when it comes to live trading.
- Have low spreads to decrease your risk and broker fee per transaction, as well as improve your EA trading frequency.
- Allow you to start with small start-up capital ($100 to $500). Some brokers require you to start with a minimum of $2,000 or even $10,000!
- Allow mini lots (and ideally micro-lots) for starting with small trades and working your way up as you become more comfortable with the trading ability of your EA.
- Be reputable broker firms with a good track record and you can be rest assured that your investment is safe.
- Offer accurate and fast execution, with the added bonus of lower costs. Ideally you want to go with a Broker that offers Straight-Through-Processing (STP) for fast and accurate trading as well as low spreads. This is also important so that there are very little differences between trading on Demo or Live accounts. (You’ll need to go live at some stage and if the differences are minimal, great stuff!)
- Ideally not charge you a fee for opening a live account or any monthly fees for having a live account and also not charge you any commission on trades.
How do these Brokers make their money?
Let’s look at an example: If you buy one US Dollar from a Foreign Exchange Bank using Euros you will, let’s say, pay 0.70 Euros for that dollar. If you immediately (without the currency values changing), sell the Dollar back, you only get 0.69 Euros back. This difference between the “bid” and “ask” price is called the spread and that’s also how Brokers make their money. When you make a trade, the Broker will charge you the difference between the bid/ask price. It's a very small chunk of every transaction you (or your EA) make and it's almost always a much smaller amount than taking a % commission. We're talking a few cents or less here per transaction... I will go as far as to say that it’s negligible and you don’t even need to worry about this when trading.
So let's continue with the review:
1. Gallant FX
Gallant FX is a Foreign Exchange liquidity provider that offers a wide range of trading technologies and services. Their position as a liquidity provider allows you to take full advantage of transparent real-time pricing. This has enabled Gallant FX to create a unique Forex Trading environment that offers individual traders the same STP (Straight Through Processing) liquidity, execution and trading functionality demanded by interbank traders. There is a strong recommendation from many professional auto-traders that this is the preferred Broker for FapTurbo as well as other EAs. GallantFX is my first recommendation and I'm currently using them with FapTurbo. You can see my live stats (on a Demo account off course) at the top of my Blog sidebar. Funny enough when you activate your FapTurbo on a demo account in the member's section, you'll notice that in the example they use an account number that starts with 208813x. That is the account number created when opening a Demo account with GallantFX...
Benefits:
- Spreads from as low as 0.3 pips.
- Micro lots (starting from 0.01), mini and standard lots sizes.
- Hedging capability.
- Scalping capability.
- Minimum opening deposit on a live account: $500.
- FREE VPS hosting on live accounts. (Run your MetaTrader platform live on a Virtual Private Server 24/7)
- Straight Through Processing.
2. Alpari (UK)
Alpari (UK) provides institutional-level online FOREX trading services and technologies. They offer comprehensive market analysis and educational tools, as well as delivering world-class customer service. Alpari(UK) should not be confused with Alpari(USA). I personally would not recommend Alpari(USA) for several reasons. Alpari(UK) is quite popular amongst professional auto-traders.
Benefits:
- Spreads from as low as 1.8 pips.
- Micro lots (starting from 0.01), mini and standard lots sizes.
- Hedging capability.
- Scalping capability.
- Regulated by the FSA.
- Micro Account: Allow users to trade via MetaTrader4, with a minimum opening deposit of $200 on live accounts.
- Classic Account: Allow users to trade via MetaTrader 4 and/or Systematic (Alparis' automated trading solution), with a minimum opening deposit of $500 on live accounts
- 10% credit bonus on all new live accounts. (Between now and 30th October, the net deposits in your live account could get you up to 20% extra funds to trade with.)
- An automated risk management system that is designed to reduce the risk of your trading account being depleted to zero or turning negative.
3. FastBrokersFX
FastBrokersFXs' trading platforms are built on a solid, fast and efficient back-office infrastructure designed for one specific purpose – to let you trade. The pool of liquidity available gives you the freedom you need. While market conditions allow it, scalping, news or swing traders are welcome at FastBrokersFX. Their policy is simple: Trade the way you want! They come highly recommended by many well respected professional traders.
Benefits:
- Spreads from as low as 2 pips.
- Micro lots (starting from 0.01), mini and standard lots sizes.
- Hedging capability.
- They welcome scalping traders.
- Minimum opening deposit on a live account: $500.
- FREE VPS hosting on live accounts. (Run your MetaTrader platform live on a Virtual Private Server 24/7)
- ECN Broker
- Regulated by the NFA (National Futures Association) & CFTC (Commodity Futures Trading Commission).
- 24/5 Customer support
How Electronic Communication Networks or ECNs Work
ECNs pass on prices from multiple market participants, such as banks and market makers, as well as other traders connected to the ECN, and display the best bid/ask quotes on their trading platforms based on these prices. Unlike fixed spreads, which are offered by some market makers, spreads of currency pairs vary on ECNs depending on the pair's trading activities. During very active trading periods, you can sometimes get no ECN spread at all, particularly in very liquid currency pairs such as the majors (EUR/USD, USD/JPY, GBP/USD and USD/CHF) and some currency crosses. Brokers that use Straight Through Processing (STP) offer somewhat similar benefits.
About The Financial Services Authority (FSA):
The FSA is an independent body that regulates the financial services industry in the United Kingdom. The FSA has been the single regulator for financial services in the UK since December 2001, when it was given statutory powers by the Financial Services and Markets Act 2000 (FSMA 2000).
All companies regulated by the FSA are obliged to meet strict financial standards including capital adequacy requirements. Companies are required to submit financial reports to the regulator on a regular basis. The FSA has the right to fine companies and/or terminate a company's regulatory status for violations.
The regulations require that the Broker:
- Maintains sufficient liquid capital in excess of the amount required to cover all client deposits, potential fluctuations in the company's currency positions and outstanding expenses.
- Undergoes a detailed annual audit performed by an independent financial auditor.
- Are under constant Supervision by the Regulator
- Segregation of funds protection: All capital not being used for margin purposes (doing trades) should be fully segregated into a special client account kept separate from the Broker company funds. In the unlikely event of the Broker's default or insolvency you still have your funds available to you in your non-broker account.
Brokers in different Countries are regulated by different financial authorities (some are un-regulated - stay away from these!) When choosing a Broker it is best to choose one that is regulated by a financial services authority. Although these brokers often operate under more limited conditions, you can at least know that they are properly audited and regulated. This will give you peace of mind that your funds are safe and that the Broker does not "cheat" you.
Risk Warning:
Before deciding to participate in Forex trading, you should carefully consider your investment objectives, level of experience and risk appetite. Most importantly, do not invest money you cannot afford to lose. Please be aware of the FOREX risk. Only invest money that you can spare and that will not change your lifestyle if you lose all your money. There are no guarantees in this industry, but with lots of research and help from you we can find trustworthy systems that will give us peace of mind and a steady stream of income!
Always start with Demo Accounts. You can open as many as you like for free and test them for as long as you like until you feel comfortable going live with real cash. To manage exposure, employ risk-reducing strategies such as 'stop-loss' and 'take-profit'. These strategies are built into most EAs, especially the ones I will be reviewing on this Blog. You can manually set these variables to lower amounts until you are comfortable with the performance of your EA. A good EA should earn high profits (more than 70% profitable trades).
If you are a beginning trader, I recommend not changing the default values that are already set when you install your EA, unless the developers notify you of new settings, or if you are getting advice from a trusted source.
There is Forex risk associated with utilizing an Internet-based trading system, including the failure of hardware, software, and Internet connection. If you're using MetaTrader, I suggest you have a dedicated trading desk at home or work and that you PC is running 24/7 with a live internet connection. Remember your EA has to constantly analyse market movements to make successful trades. If you don't have this sort of set-up available I suggest you look into having a Forex enabled Virtual Private Server (VPS) service that will run MetaTrader on their server 24/7 so you don't need to worry about down-time. We will have a look at this in the next article.
Conclusion:
At some stage, after having tested your system and being happy with it's performance, you may want to go live. Be sure you do this with the same Broker that you tested on. Results can vary significantly between Brokers! Before opening a demo account with your Broker of choice, please make sure that you can eventually open a live account with them from the Country you live in. Do this before you start, you don’t need the disappointment of finding out you can’t, after two months of successful trades on your demo account!
Some brokers require a very high minimum deposit for you to be able to open a live account. Although I rather stay away from these, you might have your own reasons for choosing such a Broker. If this is the case and you are getting the best results with your EA using one of these Brokers, you can sometimes get around this by depositing the minimum amount and then withdrawing some of it afterwards. I'm not sure if all Brokers allow this but I know some do. Do some research to find out if you can get away with it, although I would still recommend using one of the Brokers listed above. Start small and work you way up, baby steps!
I have posted the links to these Brokers' Websites on my menu-bar at the top of the Blog.
I encourage you to post comments, with your help we can find the best systems out there. If you liked this article, Digg, Buzz or Tweet it!
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