Choosing a forex broker: the complete guide in five steps

Choosing a broker is the most expensive decision a trader makes, and usually the one made on the
least information — a ranking site, or a friend’s recommendation.

This page gathers everything worth checking, in the order to check it. Each item links to the
article with the full figures.

Step 1 — The licence, before anything else

It is the only protection you have in a dispute, because international forex sits
outside most domestic regulators’ reach. If the
broker has no licence you can look up, nothing after this matters.

• Checking a broker’s licence in five steps — ten
  minutes, doable right now.
• Licence comparison across eight brokers —
  regulator, number, legal entity.
• How strict FCA, ASIC and CySEC actually are —
  not every licence is equal.
• Offshore brokers: what you gain and what you give
  up.
• Which broker is trustworthy — and the
  question to ask instead.
• What happens if the broker fails.

A common trap: the broker holds a genuine licence, but the entity you opened with is a different
one in a lighter jurisdiction. Looking up a licence
shows how to check the right place.

Step 2 — Real cost, not the advertised spread

The figure to compare is not the spread but net cost:

Net cost = spread + commission − rebate

• Which broker has the lowest spread — and why the
  question is always missing half.
• Why nearly every spread comparison
  is wrong.
• Rebates compared instrument by instrument —
  four brokers, same $/lot unit.
• Which broker pays the highest rebate —
  and why not to choose on it.
• When rebates arrive and where.
• Gold rebates by account type.

Step 3 — Pick the right account type within that broker

The gap between two account types at one broker is often wider than the gap between two
brokers.

• ECN or Standard — the calculation that
  settles it.
• Comparing costs across account types.
• Exness: which type ·
  HFM ·
  Vantage Standard STP or RAW ECN

Step 4 — Put two specific brokers side by side

Once you are down to two, these set the numbers next to each other rather than ranking them:

• Exness or XM
• Exness or Vantage
• XM or HFM — the two with the lowest entry
  bar.
• Is Exness trustworthy
• XM pays rebates into My Wallet — how that
  differs and what to watch.

Step 5 — Before the first deposit

• Which broker has the lowest minimum
  deposit — and why that figure matters less than it seems.
• How much capital you need to start —
  worked from cost, not from the minimum.
• Documents to prepare so verification
  clears the same day.
• Deposits and withdrawals through a
  local bank — which channel, how long, how much.
• If a withdrawal is stuck — six causes, in
  the order to work through them.

If you already have an account

You do not necessarily need a new one to collect a rebate. Some brokers allow
a transfer to a different IB on your existing account —
the process and conditions vary.

Individual broker pages

Each carries the full fee schedule, licences, account types, rebate cycle and the steps to open an
account:

• Exness · XM ·
  Vantage · HFM
• IC Markets ·
  EC Markets · VT Markets ·
  Ultima Markets

A plain word about the conflict of interest

Backcom is an introducing broker for all eight venues listed here, and we benefit when you open an
account through our links. That is exactly why this page ranks nothing as “best” — instead every
article gives you the figures to compare for yourself. More in the
risk warning.

This article is for information only and is not investment advice. Conditions and fee levels are published by the brokers and can change at any time — check with the broker you actually use. Leveraged forex and CFD trading carries a high level of risk and can cost you your entire deposit.