Best Forex Brokers 2019
Here at Top 10 Forex Brokers, I try my best to assist you to choose the most suitable forex broker for your experience and trading style. I consider several factors while reviewing and ranking forex brokers. In this article, I am going to talk about the most important six of those factors.
First things first, I find no excuse for not to repeat that working with a reliable forex broker comes before anything else in forex trading. You may have found the holy grail and your strategy could be making thousands of bucks every month consistently. However what good is it to be if you selected a vulturous forex broker?
These are the most important six criteria to consider when choosing a forex broker;
Regulation
This should be the first and by far the most important question to ask your forex broker. Compliance with strict standards and safety of your funds come before any other affair in trading in my humble opinion and it is ensured by the strict regulation. Imagine that you have a winning trading strategy under your disposal and you are earning a decent amount of money on forex trading, however consider whether it really matters, if you are not going to be able to withdraw your profit from the broker.
FCA (UK), ASIC (Australia), CFTC (US) and SEC (US) are the regulators which I respect the most and I would comfortably say that any broker that are under the jurisdiction of those regulators are to be trusted. They will ensure that the broker you are trading with is not located in a tropical off-shore island where you are going to be able to reach if anything goes wrong with your account and trades. So regulation, regulation, regulation guys… but of course by a reputable regulator.
The Broker's Past
A company’s history tells a lot about its success and customer satisfaction. You know very well that a fraud company cannot stay in the business for long time. This is particularly true for forex sector. I would recommend you to look for your forex broker to operate in forex business for at least five years. Scams only survive for few years and even less if they are regulated by one of the strict regulators such as FCA, ASIC and CFTC.
Spreads and Commission
Spreads and commissions are the primary criteria for many investors when they choose a forex broker. It makes sense since traders’ goal is to earn money and lower the spread and commission higher the profit for trader. Especially for those traders whose trading strategy is based on scalping and short term trading, lower cost of trading determines the difference between a winning and losing trade. No doubt that this is crucial however it is at third place on my list because, again, how it matters if you get super low spreads from a broker but it is not regulated and you don’t know if you could withdraw your profit.
Deposit and Withdrawal Options
Before you start trading and profiting on your trades, you first should deposit funds into your forex account. And in order to be able to spend your profit, you first must withdraw the funds from your account. Therefore you should ask your forex broker how easy it is to deposit and withdraw funds and what options they offer. The most common two methods for deposit and withdrawal are wire transfer and credit card. However, say you are only willing to deposit money into your account by Neteller, so you have to ask the broker if you can do it by this certain way before even sending your application and submitting your documents. Make sure they offer the methods that suit best to your preferences.
Instruments and Products
Okay, you have been trading forex all the way till now however you have just read a report and are convinced that there is a great buy opportunity on gold. You go through your broker’s instrument list and no, gold is not there. Phew, you have just missed a potential profit dude. I am the same. I am trading forex pairs most of the time but I still would like to have other instruments at hand. Not only precious metals though. Make sure that CFD indices, oil, agricultural and soft commodities are present and ready for trading on your platform.
Trading Platforms
You have been trading with MetaTrader for long time and it is the only way for you to trade. Now you have signed up with a new broker just to see that they are not offering MetaTrader. Ouch, big frustration. Most of the brokers offer MetaTrader as the standard trading tool but it is not rare to see brokers developed their own platform and only providing clients with their unique trading software. If you were planning to use an EA programmed for MetaTrader, you were most likely not going to be able to do it. So it is always a good idea to ask your forex broker up front what trading software they provide.
So based on those six criteria, what are the best forex brokers in 2019? After trying and trading with more than hundred forex brokers, these are the top 5 forex brokers considering and combining regulation, withdrawal and deposit methods, spreads and commissions, trading platforms and brokers overall reputation;
| Broker | Info | Regulator | Next Step |
|---|---|---|---|
 |
Headquarters: USA |
CFTC, NFA, CIMA | |
 |
Headquarters: UK |
CySEC, ASiC, FCA | |
 |
Headquarters: Cyprus |
CySEC, IFSC | |
 |
Headquarters: Cyprus |
CySEC | |
 |
Headquarters: UK |
FCA, CySEC, Seyschelles FSA |
Plus500 Revenue to Fall 40% Following New ESMA Regulations
ESMA effect has made a very strong impact. Even the industry leaders such as Forex brokers and the CFD brokers are at the receiving end of this effect. Plus500 Ltd, a FCA regulated CFD broker that runs online had released a Trading Update for Q3. It stated that since the previous quarter, the revenues witnessed a drastic fall of 40%. So, the current number is $100.1 million. As per records, it is just a third of the Q1 revenues. ESMA’s had a strict cap imposed on the amount of leverage that every broker can provide to the trading customers. Initially, it had 30x for FX pairs on major ones. And Q3 for 2018 took into account the very first two months of the ESMA’s new regulations.
However, one cannot identify the effect of ESMA while checking Plus500’s ARPU and even the average revenue produced per customer. Also, Q3 ARPU was at $1232 the previous year whereas it is $981 now. Further, the cost of gaining a new customer has gone up to a massive $1581 for the company. Infact, in the initial months of the year, the cost was just $677.
Plan for $10 Million Share Buy-Back
Plus500’s price of the share has diminished by 40% after having a £20 peak during August. The company has come-up with a plan to cope-up with the situation. With the authority given to company’s AGM, the plan is to start a $10 million share buyback programme. And the Liberal Capital Limited will run this non-discretionary programme. But there are a few parameters that must be maintained.
Also, Plus500 offers that 8% of total EEA customers can be elected as professional clients to represent an approximate 38% of total Q3 EEA revenues. It should be noted that EU brokers and Plus500 can offer professional clients a higher level of leverage. As the company believes, the current restrictions of EEA will only affect less than half of EEA revenues or 30% of the total revenue.
The Chief Executive Officer, Asaf Elimech quoted,
“Our results for the third quarter continued to show satisfactory levels of trading activity of our Active Customers in comparison to previous years, despite regulatory changes and low market volatility. We continue to focus on our core markets and acquiring high value customers supported by our innovative technological edge and the prospect of potential new licences outside the EEA. We now expect to be ahead of current market expectations for 2018.”
$5.5 Million Fine Imposed on Interactive Brokers by FINRA
It has recently been announced by FINRA that they have decided to fine Interactive Brokers LLC with an amount of $5.5 million for violating the SHO regulations as well as the lack of supervision for a period of three years.
The firms need to deliver the settlement date or take necessary actions to put an end to the "failure to deliver" by borrowing or buying the securities after the completion of a short transaction as per regulation SHO of SEC.
If the firm fails to close the issue of failure to deliver, then they cannot participate in short transactions without making arrangements for procuring the securities.
It has also been prohibited by the regulation SHO to carry out or offer a short sale at a price that is either less or equal to the national best bid if the security of the price has fallen at least by 10 percent in a single day.
It has been found by FINRA that for the period between July 2012 to June 2015, the supervisory systems of Interactive along with its supervisory procedures were not on par with the requirements of Regulation SHO.
Furthermore, the broker LLC also ignored several red flags from its compliance and clearing personnel, FINRA, risk assessments, given in the form of internal audits and warnings.
Failure to Close More Than 2300 Transactions
These warnings clearly showed that its system for Regulation SHO supervision was impractical. Despite knowing the incapability of its supervisory system, Interactive did not take any action up until mid-2015.
Thus, it failed to close more than 2300 fail-to-delivers and carried out short transactions without preparing to procure securities for over 28,000 times. Moreover, Interactive displayed more 4,700 short sale orders in covered securities at a price that was less than the best national bid.
Susan Schroeder, the Executive Vice President of FINRA said
"Firms that are aware of deficiencies in their supervisory systems must promptly remediate them. In this case, the firm internally identified the problems, yet did not revise its supervisory systems for more than three years, creating the potential for negative impact on the markets and investor harm."
Interactive did not admit but also did not deny the charges against them to settle the matter rather they consented to the findings of FINRA.
FINRA is a non-profit organization that works to protect the investors and maintain the integrity of the market. Based in the US and controlled by SEC, FINRA creates rules and regulations apart from enforcing the compliance with the FINRA rules as well as federal laws.
FINRA also protects the integrity of the equity and the options market while maintaining a forum to resolve the disputes of investors, brokerage firms as well as their employees.
CySEC Fines InstaForex and ForexMart Parent for €130000
CySEC has issued a notice recently making everyone aware of their decision to impose a €130,000 fine on the Instant Trading EU Ltd, a regulated CIF broker that operates the InstaForex, InvestCity and ForexMart.
CySEC went out of its way this time to provide a clear explanation by dividing the fine into two different parts unlike what this regulatory organization does in similar cases.
The regulatory organisation fined the company €90,000 for not acting justly, professionally and honestly to work in order to benefit their clients. Furthermore, CySEC has stated that the company has been totally non-compliant while providing trading bonuses or benefits to the clients, using the leverage properly and safeguarding the clients against a negative balance.
The company was also fined €40,000 for not asking the clients to provide all the information required in proper details that show the experience as well as knowledge the clients have in investing money. CySEC stated that complying with this regulation is necessary since it helps a company to understand the products or services that are in the best interest of the clients.
However, the regulatory authority, CySEC also stated in their notice that the company has taken corrective measures after being warned and they do not have any track record of committing similar atrocities in the past.
The complete notice that CySEC issued is given down below:
02 August 2018
CYSEC Board Decision
Announcement date: 02.08.2018; Board decision date: 11.06.2018
Regarding: Instant Trading EU Ltd
Legislation: The Investment Services and Activities and Regulated Markets Law, Directive DI144-2007-02 of 2012
Subject: Total Fine €130.000
The Board of the Cyprus Securities and Exchange Commission (‘CySEC’) would like to inform the public that, at the meeting held on June 11, 2018, it has decided to impose a total administrative fine of €130.000 to CIF Instant Trading EU Ltd (‘the Company’) for non compliance with the following:
- the Investment Services and Activities and Regulated Markets Law of 2007, L.144(I)/2007 (‘the Law’), and
- CySEC Directive DI144-2007-02 of 2012 for the Professional Competence of Investment Firms and the Natural Persons Employed by them (‘Directive’).
In detail, the CySEC imposed an administrative fine:
A. of €90.000 for non-compliance with article 36(1) of the Law, as it did not act fairly, honestly and professionally in accordance with the best interests of its clients.
B. of €40.000 for non-compliance with article 36(1)(d) of the Law and paragraphs 15 and 16 of the Directive, as it failed to ask clients to provide the necessary information regarding their knowledge and experience, to assess whether the investment service or product is appropriate is appropriate for them.
In reaching its decision, the CySEC has taken into consideration the following:
(i) The importance attributed by the legislator to violations of this kind, which is reflected by the maximum administrative sanction provided for violations of article 36(1) of the Law, in article 42(3) of the Law, i.e. €350.000.
(ii) The importance attributed to the need to ensure that the persons subject to the supervision of CySEC comply fully with the provisions of the Law and the relevant Directives.
(iii) The importance attributed to the obligation of the CIFs for acting fairly, honestly and professionally in accordance with the best interests of its clients.
While in particular, the CySEC has taken into consideration the following factors –
1. For the Company’s non-compliance with article 36(1) of the Law,
(i) The importance attributed to protecting the interests of CIFs’ clients.
(ii) The fact that the Company’s non-compliance relates to the use of leverage, to the granting of bonuses/trading benefits to clients and to the clients’ negative balance protection, for which guidance was provided in CySEC Circulars C168 and C192, to ensure compliance with article 36(1) of the Law.
(iii) As moderating factors, the fact that:
– as stated in its representations, the Company has taken corrective actions in relation to the use/offer of leverage, the improvement of its mechanisms for the protection of customers from negative balance as well as the termination of the granting of bonuses/trading benefits to its clients,
– the Company did not commit a similar violation in the past.
2. For the Company’s non-compliance with article 36(1)(d) of the Law and paragraphs 15 and 16 of the Directive,
(i) The importance attributed to the protection of the interests of CIFs’ clients and more specifically the need to collect information on the clients’ experience and knowledge, which enables the CIF to better assess whether an investment service is appropriate for a client.
(ii) As moderating factors, the fact that:
– as stated in its representations, the Company has taken corrective actions and more specifically it has updated the procedure for the assessment of clients’ appropriateness as well as the relevant questionnaire,
– the Company did not commit a similar violation in the past.
IGM Forex License Suspended by CySEC
In a new notice, CySEC, the financial watchdog of Cyprus has notified everyone about their decision to suspend the CIF license for the trading of FX Broker based in Limassol, IGM Forex Ltd. In the notice, the regulating body has stated that they have undertaken the decision to suspend the company was based on the inadequacy that they found in the capital and funds requirements that the IGM Forex has shown.
As per the notice published, it was informed that the CySEC or Cyprus Securities and Exchange Commission has taken the action against the IGM Forex under the violation of rules and regulations by the company stated under section 71(6) (c) of the Τhe Investment Services and Activities and Regulated Markets Law of 2017 (L.87(I)/2017) in coalition with the rules stated in the Section 10(1) of Directive DI87-05 for The Withdrawal and Suspension of Authorisation.
The financial regulating body has taken actions under the light of different suspicions that have been raised against IGM Forex. CySEC has allegedly charged the company under the violation of certain clauses that are mentioned below:
- Article 92(1) of Regulation (EU) 575/2013
- Section 10(1) of The Investment Services and Activities and Regulated Markets Laws of 2007 to 2016 (L.144(I)/2007) and Article 93(1) of Regulation (EU) 575/2013
The allegations that CySEC has brought against the IGM Forex are very serious. If these allegations are true, then it jeopardizes the safety of the investors and clients of the company. Furthermore, it disrupts the integrity of the Forex and securities market completely. CySEC has also provided the company with a deadline of 15 days to clear the allegations brought against them by complying with provisions that are mentioned above.
However, as long as the suspension is in action, IGM Forex has to follow the following regulations under the directives of section 9 of DI87-05:
- The company will not have the permission to offer investment services; carry out any new transaction with any client or individual and promote itself as a Forex broker.
- However, the company is allowed to finish the transactions of the clients or its own initiated before the suspension came into force. Furthermore, IGM will also have to return the funds as well as any other financial tool that belong to the clients.
ESMA Announces the Dates For New Rules on Forex Trading
EU wide regulator ESMA has announced the dates from when it is going to enforce new regulations regarding forex, CFD and binary options trading. I shared two different updates in last few months about the ESMA's decision to lower leverage, ban binary options trading and introduce restrictions on bonus and promotions offered by the forex brokers.
ESMA to Limit Leverage at 30:1, Ban Binary Options
ESMA Proposes to Lower Leverage to 30:1 in Europe
The new rules were formalized by ESMA in late March after a long and thorough consultation period with industry representatives and authorities.
The dates from when new measures and rules will take effect;
July 2, 2018
- Ban on the marketing and provision of sales of binary options to retail investors.
August 1, 2018 –
- Lowering maximum leverage to 30:1 for forex majors, 20:1 for non-major pairs, gold and major world indices, 10:1 for non-gold commodities and non-major equity indices, 2:1 for crypto currencies,
- Introducing negative balance protection on every forex trading account,
- Bringing a standard stop-out level of 50% on every forex trading account,
- Restrictions on bonus and promotions provided by forex brokers to the traders
MiFIR (Markets in Financial Instruments) empowers ESMA to enforce temporary intervention rules on a three monthly basis. This means that ESMA will review and evaluate the outcomes of the new rules prior to the end of three months in order to decide whether to extend them for another three months.
Steven Maijoor, ESMA Chair, explained:
The measures ESMA has taken today are a significant step towards greater investor protection in the EU. The new measures on CFDs will, for the first time, ensure that investors cannot lose more money than they put in, restrict the use of leverage and incentives, and provide understandable risk warnings for investors.
ESMA’s prohibition on the marketing, distribution or sale of binary options to retail investors addresses the significant investor protection concerns caused by the characteristics of this product.
NCAs will monitor the impact of these measures during their application and will assess, with ESMA, what next steps are required.
On an additional note, Cypriot financial watchdog CySEC clarified that new rules including lower leverage and restrictions on promotions would also apply to non-EU citizens following the great volume of inquiries on this issue.
FCA Issues Warning Against Three Binary Options Brokers
UK's financial services watchdog, The Financial Conduct Authority (FCA), has announced warnings against several unregulated binary options brokers and a portfolio management firm. BigOption, Rbinary and VIP Brokers are the binary options brokers that FCA has warned against for providing financial services or products without authorization.
Furthermore, LTX Markets has been targeting clients in the UK and is also conducting financial activities that require regulation without FCA’s authorization.
- BigOption’s website is currently down, so I could not get further information about this company. However, looking at its name, it is safe to say that this is an unregulated binary options broker.
- Rbinary is a binary options broker, also social trading platform with claimed returns up to 80%. There is no information on the website about the company who owns the brand, but according to the Terms and Conditions, the Company is registered in the Marshall Islands.
- VIP Brokers is registered in the Marshall Islands and owned by Wilkinson Development LTD. The broker offers different account types with promised returns between 80% to 90%.I should say that it is common to see that binary options brokers promise high returns, but in reality most of option traders lose their money.
- LTX Markets claims to offer automated portfolio management systems on fixed return contracts based on the clients’ investment objectives and risk sentiment. Supposedly, the company is headquartered in UK and has offices in South America and Switzerland.
I keep saying that investors who are intending to open trading account with a binary options broker, that is registered in offshore regions such as the Marshall Islands, must think twice. The same goes with forex brokers as well. Many of those brokers are simply scams, and even if they are not, the clients have no financial and legal protection if things go sour.
On the other hand, all forex brokers licensed by UK's FCA goes under strict regulation and standards.
Canadian Regional Regulator Issues Warning Against AvaTrade
Canadian regional financial services regulator The Financial and Consumer Affairs Authority of Saskatchewan (FCAA) has issued a warning against the well-known forex broker AvaTrade. Specifically, FCAA has announced that it launched a Temporary Cease Trade Order versus Ava Trade Limited.
The watchdog explained that AvaTrade is operating an unregistered online trading platform for trading forex and CFD under its jurisdiction.
FCAA states that AvaTrade is not a registered and regulated company to prodive trading services in Saskatchewan or other jurisdictions in Canada.
It appears that AvaTrade is the subject of several other warnings issued by regulators of other states in Canada such as Ontario, British Columbia and Quebec. Residents of Canada who have been contacted by AvaTrade are urged to contact FCAA by the regulator.
Announcement from the Directors of FCAA
An investor should always check to see if a company is registered to trade in the jurisdiction that the investor resides, before handing over their money. A company’s registration status can be checked by using the Canadian Securities Administrators’ National Registration Search database at www.aretheyregistered.ca. Just because a company claims to be registered in a foreign country, does not mean they are registered everywhere.
AvaTrade is a broker that I have traded with before and included in my list. This warning from FCAA is a serious stigma on the reliability of AvaTrade. I have updated the Company’s review and rating in paralell to FCAA’s alert.
FCA Issues Warnings Against Three Firms
UK's financial watchdog FCA (Financial Conduct Authority) has released warning against three firms that are unregulated by the FCA but offers financial services to the UK citizens.
New Power Gen Ltd t/a Strategy Markets
Addresses: 3rd Floor, 207 Regent Street, W1B 3HH
51 Marshall Street, Island Suite, Soho, London W1F 9SF
Palm Grove House, P. O. Box 438, Road Town, Tortola, British Virgin Islands
Strategy Corp Ltd, Palm Grove House, P. O. Box 438, Road Town, Tortola, British Virgin Islands
Telephone: 0800 031 5292,0800 031 5293,0800 031 5294,02038138577,07933855528,07599828738
Website: https://strategymarkets.co.uk/
Delta Capital Markets / ADT Group Ltd
Addresses: 86-90 Paul street London, EC2A 4NE
145-157 St John Street, London, England, EC1V 4PW
ADT Group, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960
Axium Corporate 43 The Bowls, Chigwell, Essex IG76ND
Telephone: 08002461782, 02036218153
Email:admin@deltacapitalmarkets.com,s.lockhart@deltacapitalmarkets.com,info@deltacapitalmarkets.com,support@deltacapitalmarket.comAccounts@deltacapitalmarket.com,sales@deltacapitalmarket.com,m.baker@deltacapitalmarket.com,j.stone@deltacapitalmarket.com
Website: https://www.deltacapitalmarkets.com/
The last warning is against a clone firm which is using details of a financial service prodiver regulated by FCA.
Trade Korea (clone of FCA authorised firm)
Website: www.tradekorea.com
I advise attention and caution if you receive promotional email or text message from any of those three firms.
Plus500's License Application Denied By Bulgarian FSC
If you have been in forex thingy for a while, you have probably heard or perhaps traded with this broker; Plus500. It is one of the leading and largest brokers in the industry for trading CFDs, forex, indices, ETFs and commodities. Publicly traded in London Stock Exchange, Plus500's market capitalization value is above $1 billion. They are sponsoring major football clubs, rugby teams and their ads are all over the place on internet.
Such an almighty firm, isn’t it? Well, perhaps not. Plus500 has been denied by Bulgarian Financial Services Commission in its application for providing financial services in the country. The company is already present in Bulgaria where a big portion of its customer support and operations department is located. The reason for denial is unknown so far however it was based on a procedural issue according to representative from the firm.
Just for the sake of record; Plus500 doesn’t need a license to conduct what it is conducting in Bulgaria right now. So its presence in the country will continue for other purposes but won’t be able to provide financial and investment services.