Which forex broker is trustworthy? The question to ask instead

This question has no ranked answer, because “trustworthy” depends on something no ranking mentions:
which legal entity signed the agreement with you.

Licences the eight brokers publish

An empty cell means the broker does not state a licence number publicly, not
that it holds none.

What this table does not say

A brokerage group runs several entities, each
under its own licence:

• A UK entity serving UK clients, supervised by the FCA.
• An Australian entity serving Australian clients, supervised by ASIC.
• An offshore entity serving international clients.

Most international clients fall into the third group. The FCA licence displayed
prominently on the home page may not apply to your account at all. See how this plays out at Vantage: five entities, five licences, and only one of them covers most international clients.

Why this matters more than any other criterion

It determines three things:

• Whether your money is segregated from the firm’s working capital.
• Whether any compensation scheme applies if the broker becomes insolvent.
• Where a dispute is resolved and which authority has jurisdiction.

And the part specific to Vietnam, stated plainly: no retail forex derivatives broker is
licensed to operate in Vietnam. In a dispute, Vietnamese authorities have no jurisdiction
over a foreign-registered entity, and no Vietnamese compensation scheme applies.

Three questions instead of a ranking

1. Which entity signed the agreement with me? — read the front of the client
   agreement.
2. Which regulator supervises it? — look the licence number up on the regulator’s
   site, not the broker’s.
3. Is my money segregated? — find the client-money section of the terms.

If you cannot answer all three, you do not know what risk you are carrying — however many licences
the broker lists.

Three measures that apply to any broker

• Do not keep all your capital in the account — hold what covers margin plus a
  buffer.
• Make a small test withdrawal in the first
  month, so you learn the process before there is pressure.
• Withdraw profits regularly rather than letting them accumulate for years.

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.