Last December, Libertex announced that it was completely slashing commission, swap and exchange fees to zero on all crypto CFDs available on its platform as part of a special holiday promotion. But it was simply too good to let go since undoubtedly these are possibly the best trading conditions currently available on the market. The response from clients was so overwhelmingly positive that Libertex has decided to continue these trading conditions indefinitely.
The cryptocurrency sector is one of the most exciting areas of trading today, and Libertex is making it infinitely more exciting by eliminating some of the annoying fees that other brokers still charge. Essentially, this means that, with the Libertex platform, if you have €100 in your account, you can use your entire balance to trade crypto CFDs without wasting a big part of it on fees. That’s it! No catch, no fine print! With three different kinds of fees slashed to zero, Libertex lets traders save money that other brokers would normally charge as fees.
Libertex is possibly the only online broker to eliminate these three fees. Going forward, it plans to continue offering 0% swap, commission and exchange fees on all cryptocurrency CFD trades. These include Bitcoin, Ethereum, Litecoin, Stellar, Solana and any other cryptocurrencies on the Libertex platform. These special conditions are available for both new and existing Libertex retail clients (except UK retail clients, where cryptocurrency CFDs are not available).
So, what does it actually cost someone to trade crypto CFDs on Libertex?
The only thing a trader would pay on a crypto CFD trade with Libertex is the spread (the difference between the Ask and Bid prices). In other words, traders can expect to save a substantial amount of money with Libertex when making multiple trades, overnight trades, high-volume trades and more.
Fewer fees, more freedom in trading crypto CFDs
It is only natural for traders to do their best to minimize or avoid fees, but in the fast-moving crypto market, this can restrict their flexibility in responding to trends or cause unnecessary stress. Feedback from crypto CFD traders on Libertex indicated that they need cryptocurrency trading to be faster, more flexible and more friction-free than classic forex trading. By eliminating three different kinds of fees, Libertex continues its mission to make trading accessible for everyone and provide its clients with high-quality assets such as crypto CFDs and more.
Trade for More with Libertex
With over 24 years of financial market experience and more than 40 international awards, including most recently Best Trading Platform (Forex Report, 2021) and Most Trusted Broker of Europe (Ultimate Fintech, 2021), Libertex has been one of the leading platforms combining classic market expertise with cutting-edge technology, designing user-friendly software that makes the market accessible from any device, anywhere, anytime.
Used by everyone from professional traders to complete beginners (who can start with a practice demo account), Libertex features a full range of tools and information in order for its clients to get the most out of the platform.
It only takes a few seconds to register with Libertex and enjoy the potential advantage of these unique crypto CFD trading conditions as well as a full range of stocks, commodities, and forex CFDs. Say goodbye to crypto CFD commissions for good and sign up to trade with Libertex!
Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75.3% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Cryptocurrency instruments are not available to retail clients in the UK.
Available for retail clients on the Libertex Trading Platform.
Part of the Libertex Group, Libertex is a Broker regulated by the Cyprus Securities and Exchange Commission, offering tradable CFDs with underlying assets being commodities, Forex, ETFs, cryptocurrencies and other. Libertex also offers commission-free investments of real stocks.
Over the years, Libertex has received more than 40 prestigious international awards and recognitions, including “The Most Trusted Broker in Europe” (Ultimate Fintech Awards, 2021). Libertex is the Official Trading Partner of Tottenham Hotspur FC bringing the exciting worlds of football and trading together.
Since founded in 1997 the Libertex Group has grown into a diverse group of companies, brokers, dealers, educational and IT-development centers which allow the group to operate globally, serving millions of clients from over 120 countries.
January 2022 – The HF Markets Group has announced today that the HotForex brand is now licensed and regulated by the Capital Markets Authority (CMA) of Kenya through HFM Investments Limited, under license number 155.
A spokesperson for HotForex commented, “This new license marks a new milestone in the steady growth of HotForex, which has become a truly global and multi-regulated brand over the past ten years. It also demonstrates the continued success of the HF Markets Group, made possible by our clients, partners and the dedicated efforts of the HotForex team to offer the safest trading environment possible to millions of traders around the world.”
This latest prestigious license is in addition to existing licenses and regulation from the Financial Sector Conduct Authority (FSCA) of South Africa, the Financial Services Commission (FSC) of Mauritius, the Cyprus Securities and Exchange Commission (CySEC), the Financial Conduct Authority (FCA) in the UK, and the Dubai Financial Services Authority (DFSA).
When you open a HotForex trading account you’re joining the World’s Leader in Online Trading!
HotForex is an internationally acclaimed multi-asset broker of choice to over 2.5 million live accounts worldwide that has earned over 55 coveted industry awards in its ten year history. The company offers a wide variety of account types, innovative products, platforms, tools and educational resources besides outstanding customer service and unparalleled trading conditions to facilitate individuals and institutional customers to trade Forex and CFDs online.
Trading Leveraged Products such as Forex and Derivatives may not be suitable for all investors as they carry a high degree of risk to your capital.
Prior to his new appointment, Chris served as Risk Manager at Finalto’s London HQ. His work helped streamline and update Finalto’s risk management processes, enabling them to provide world-class services and mitigate risk across all key areas of their business. His strategic direction and client focus over the past 4 years has had a significant impact on the growth of Finalto.
“As an Aussie having moved to the UK nearly 20 years ago, I am excited to be heading back home to help grow the Finalto brand and our amazing product portfolio.”
Chris holds over two decades worth of financial experience and has held managerial positions in Operations, Sales and Risk. He brings with him specialist FX and CFD market knowledge and a deep understanding of what clients need from their liquidity and technology provider. Chris will play a pivotal role in servicing our institutional clients as we expand our offering across the APAC region.
Not all success stories are loud, and OneRoyal is a prime example of that. Founded in the US in 2006, the broker saw global expansion and opening offices from Europe to Australia. In 15 years of successful operation, the company did not actively pursue PR and media exposure, opting to focus on providing its clients with premium trading experience instead. Now, the broker is stepping up its visibility. Today, we sat down with OneRoyal founder and Chairman Rayan El Annan to look at the company today, and the vision for success in 2022 and beyond.
From Florida to Australia, Cyprus, Lebanon – how did you end up with such geography?
I launched the company in 2006 in Florida. Regulated by the USA financial authorities (CFTC) and a member of the NFA at the time, it did exceptionally well. In mid-2008, we made a strategic decision to move the “ROYAL-RFXT.COM” brand to the Middle East (while maintaining the Global Support Office in the US). Driven by organic growth of the company and the ambition to expand globally, we acquired our CySec, ASIC, VFSC and FSA licenses. With our Market Research and Training arm based in Cairo, Egypt, we are exceptionally well positioned to service traders worldwide.
What have been the highlights of the year 2021 for OneRoyal?
This year, we uplifted the brand from Royal to OneRoyal, to emphasize that we are THE ONE broker that our clients need. Our ambition is to be “the last broker our clients will ever register with” – simply because the trading experience and the products we provide meet and exceed their expectations. To reflect this ambition, we have updated our logo and are now gearing up towards the launch of the new website and the client areas, with a shortened and streamlined onboarding process.
When it comes to the product offering, we introduced 15 ETFs in May. We also expanded our deposit methods by adding crypto (USDT, BTC, ETH and XRP) to meet the demand of crypto-focused traders. Later in the year, we went further on crypto by adding Dash and Bitcoin Cash to our CFD offering. And recently, we have introduced Bitcoin as an account base currency on the MT4 platform.
What are OneRoyal’s plans for 2022?
2022 feels very special as this is our anniversary year, and we start it by reflecting on our 15 Years of Excellence as we keep going forward with new projects and goals that will propel us to further growth. Our website and refreshed client areas are in the making. We are updating our onboarding flow, so clients could start trading in 60 seconds, while also stepping up our offering for institutional clients. In the coming weeks, we will be moving to the new premises in Limassol, which will be our global hub, and gaining a more prominent exposure on the scene, as well as in the media and industry events.
Does the new HQ mean more hiring in Cyprus?
Yes, we have been actively hiring lately, mostly with the purpose to upgrade our top management team and set the company up for strategic growth. We have hired key players to our C-suite and I personally have faith in our renewed vision and the team’s capabilities of executing it.
What is this renewed vision exactly?
Internally, we have formulated our vision as redefining the relationship between brokers and traders towards stability and trust, while building an environment where it becomes a norm for brokers to give back to their community through supporting education and growth, creating a better future for the next generations. Our future decisions regarding potential partnerships, sponsorships and CSR initiatives will be made to foster this vision.
It makes sense that OneRoyal puts emphasis on stability and trust between brokers and traders. In over 15 years in the market, the company did not have any regulatory controversies and accusations – which is uncommon in the industry known for its bad reputation. What is the secret of that?
I don’t believe there’s any secret. I founded OneRoyal when I was 25, and I have always been determined to build a company that lasts over 100 years. Hence, regulatory compliance has always been among our core values, and we take it very seriously. That said, I do not believe that OneRoyal is unique in that, and being compliant is not a special secret. In fact, there are a lot of honest and reliable players in the industry. It’s unfortunate that there are some “bad apples”, be it companies or individuals, who mislead clients, thus contributing to the industry’s bad reputation. On a personal note, it is vital for me that we do things right, and I will always sacrifice short-term gains, no matter how big, for the long-term stability and future of OneRoyal.
This pandemic has as it were, taken up most of the first half of the year, which effectively leaves us six months to rescue what is left of 2020.
Almost every sphere of economic activity has been shut down, except the world of online trading which continues to thrive. This period has seen all financial markets brimming with opportunities.
Bi-directional markets such as the online forex trading market hold a lot of opportunity at the moment and will hold even greater opportunities after COVID-19 has been contained. For Kenyans, there is a lot of opportunities to get started in forex trading right now. Do not buy into the schools of thought that say the forex market is too risky to invest in at this time. Many financial fortunes were changed for the better in the period immediately trailing the 2008 global financial crisis. These were those who understood market cycles and knew how to play the market both ways by buying when they needed to, and shorting when the time was right.
Is the religion of Kenya in the way of forex trading?
Unlike some other African countries like Morocco, Egypt where live over 98% Muslims who often struggle with the question whether is forex trading halal or haram, Kenya has only about 10% Muslims, so only a slight percentage of Kenya’s citizens have to decide whether forex trading is prohibited by Islam or not. Nearly all the rest of the population (85%) are Christians. This means one simple thing. Religion will not stand in the booming popularity of forex trading in Kenya.
Why was the popularity of FX trading so heavily boosted in Kenya?
The popularity of FX trading was given a boost by the introduction of regulation by the capital markets authority. The entrance of the first local forex provider into the market generated a lot of media buzz. This first brokerage was not a 100% indigenous brokerage, but a subsidiary of a Cyprus-based brokerage carrying a CIF license. A second player has since entered the local market, but they are doing so at a time when offshore brokers have had more of a foothold in Kenya than the local ones.
This article highlights what the rest of 2020 has in store for Kenyans in online forex trading. So what lies ahead?
More Broker Scrutiny
At the heart of the institution of forex authorization and licensing by the Capital Markets Authority in Kenya is regulation. Kenya is coming from an era where many local traders lost their money to fly-by-night operators. Many of these were shadowy companies with unclear regulation or licensing, and worked with local partners, some of who were also doing things on their own without the consent or knowledge of their principals.
For instance, it was not unusual to see an individual claiming to be a representative of an offshore broker, and offering to manage funds for clients without track record or without any form of regulation. Cases of such persons absconding with the money of their clients were rampant. At this time, the Capital Markets Authority was in existence, but only regulated the Kenyan Stock Exchange and brokers offering trading in local stocks.
With traders suffering such mishaps in the past and the CMA stepping up with regulation, Kenyans can be sure that unregulated forex brokers will not have a field day in the country. Even offshore brokers who step into the market know they have to get their licensing sorted out before they come or they will get nowhere.
Quest for Greater Forex Education
With greater forex trading awareness has come the clamour for forex education. Forex brokers now know that forex education is no longer an optional bonus but a necessity for getting and engaging new clients. Competition in providing comprehensive forex education means that Kenyans who want to start online trading will now be able to get access to top quality forex education content that can make a difference for them.
More Robust FX Market Due to COVID-19
The world is at a critical juncture and like it or not, the COVID-19 pandemic has created immense trading opportunities in the financial markets. Many currency pairs are trading in price ranges that have not been witnessed before. To put it in another way, if the EURUSD was giving you a daily trading range of 100 to 200 pips a day. All the forex market is asking is this: do Kenyan forex traders have the skills and strategies to take their own share of the COVID-19 opportunities in the forex market?
COVID-19 looks like it will be with the world for several months ahead. This means that there will be lots of opportunities. Many brokers are already reporting increases in new registrations as offline jobs and opportunities dry up. Online opportunities such as forex trading will continue to be around for a lifetime. Therefore, Kenyans need to use this window of opportunity that the increased volatility in the FX market has brought their way to make money from the market.
Local Brokers Will Run Alongside Foreign Brokers
It is true that CMA has regulated forex trading, but it cannot prevent Kenyans from trading with offshore brokers. So Kenyans will see a situation in 2020 where regulated offshore brokers will operate alongside the two locally-based forex broker brands. So you still have a choice of what brokers to use. Whatever your choice is, ensure the broker is regulated and has a good track record. Considering that the oldest of the local brokers in Kenya is only 2 years old, there are those Kenyans who would still choose experience and track records over location.
These are some of the things that 2020 has in store for Kenyans in online forex trading. Are you ready for them? Hope you are.
Partly, this intense growth was caused by the fact that ESMA enforced new restriction laws on the maximum leverage that EU traders can use (this caused FX brokers to focus on other big markets, like Africa)
An average of over $5.1 trillion is traded daily in the Forex market. Though worldwide, there are major forex trading centres which include London, Tokyo, Paris, Sydney, New York, Zurich, Singapore, and Hong Kong. A Forex trading day starts in Australia and ends in New York. The market stays open for 24 hours a day and five and a half days a week.
There are specific regulations in countries, continents that oversee the trading of Forex. In some countries, FX trading is restricted and banned while in others, it is fully supported. In this post, our focus is on Africa as we’ll be looking at Forex regulation across the continent.
Overview of Forex Trading In Africa
Forex trading is a very competitive activity, and in Africa, it is no different. The market has experienced speedy growth over the last two decades as more Africans are being enlightened on what Forex entails.
Significantly, the last decade has seen the Forex market go from almost unnoticed to becoming one of the most dynamic industries in the content. This can be attributed to the advent of mobile devices and other technologies.
There are about 1.3 million Forex traders in Africa. South Africa and Nigeria lead the way as both countries constitute a large percentage of the total figure.
With this vast amount of forex traders, it is expected that government financial regulatory bodies will be interested in monitoring trading activities in individual countries.
Forex-Friendly African Countries
A lot of African countries are Forex-friendly, but there are minor restrictions from the government. Forex can be traded in Nigeria, South Africa, Egypt, Kenya, Namibia, Ivory Coast, and many other African countries.
Whereas Forex trading cannot be said to be legalized in these countries, it also does not break the law. Before a Forex broker can offer Forex trading services to a country’s citizen, it is mostly mandatory to acquire a trading license.
Forex-Prohibited African Countries
Currently, a complete Forex ban is not placed on any country in Africa, unlike world countries like North Korea and Israel. As stated earlier, there are minor restrictions from the government in some countries. These restrictions do not prohibit the trade of Forex but are imposed to prevent fraudulent and scam activities.
Some of these restrictions are on the maximum trading amount and the maximum amount you can have in your Forex account. These are similar to Forex restrictions imposed in countries like China and Russia. Furthermore, Forex trading with non-licensed Forex brokers is prohibited in some African countries. Likewise, you can only trade Forex for yourself and not for anyone else (identification is mandatory for most Forex brokers).
Forex trading is usually not welcomed in countries governed with strict sharia laws. As a result, countries like Algeria, Benin, Burkina Faso, Egypt, etc., may not be the best to engage in Forex trading.
Let’s consider how Forex trading is regulated in some major African countries:
Forex Regulation In South Africa
In South Africa, various regulatory trading rules are put in place to minimize Forex trading risks. These regulations are imposed by the South African Financial Sector Conduct Authority (FSCA), formerly known as the Financial Services Board (FSB). The FSCA is the body responsible for monitoring and controlling all financial activities in the country. It is the most vigorous Forex market regulation in Africa.
The FSCA regulatory policies are in line with what is obtainable from regulatory bodies overseas. Notably, all OTC derivative brokers must report all trades in a bid to organize CFDs. Through the FSCA, Forex brokers can relate with each other without resulting in conflict.
According to topforexbrokers.co.za, the FSCA license incorporates some immense benefits like that FX brokers regulated by the FSCA treat their customer in good faith and that they help them with financial education and financial literacy. Not to mention that if anything goes south, a South African trader who is trading with FSCA regulated broker can go to FSCA if they think they have been scammed by their broker or mistreated.
Forex Regulation In Kenya
In Kenya, the Capital Markets Authority (CMA) regulates all financial activities, including foreign exchange trading. Before a Forex broker can do business in Kenya, they must be registered and licensed by the CMA.
Forex was previously unregulated in Kenya. Before 2016, lots of Kenyans were trading with unregulated brokers, and there were too many reports of fraudulent activities. As a result, the Kenyan government authorized the CMA to regulate Forex trading activities in the Finance Act 2016. The principal aim of the regulation is to make the market transparent and protect investors’ funds.
The CMA drew regulatory leads from international regulatory bodies like the Australian Securities and Investment Commission (ASIC) and the United Kingdom’s Financial Conduct Authority (FCA).
Forex Regulation In Nigeria
Forex trading in Nigeria is still unregulated despite the market being one of the most active ones in the continent. However, it is perceived that the country’s apex bank is working with the Securities Exchange Commission to commence Forex trade regulation.
Despite the absence of regulation in the country, the government does not consider Forex trading illegal. There are local Forex brokers who register just like other businesses and carry out foreign exchange activities as usual. Most Forex traders in Nigeria make use of foreign Forex brokers rather than the local ones due to this lack of regulation. The trading risk is totally on the trader, so they assume the foreign brokers are more trustworthy.
Banking policies do have effects on Forex trading in Nigeria. Some Nigerian banks may prevent customers from using their electronic cards to make payments or withdraw from foreign exchange platforms. Presently, there are imposed restrictions on the amount of foreign currency a Nigerian can spend outside the country. These are individual policies that could be eliminated if the Nigerian government properly legalizes Forex trading.
How To Select The Best Forex Broker For Africa
Due to the risks involved in Forex trading, it is vital to be cautious when deciding on the best Forex broker to invest in Africa.
Firstly, you should check for the broker license. If Forex trading is regulated in your country, check to see the Forex brokers licensed by the regulatory body. For a country like Nigeria, where the market is not restricted, consider foreign brokers who are licensed by global licensing authorities.
The next thing to do is to check out the trading platforms offered by these brokers. Check for their deposit bonuses, ratings, minimum deposit, and payment options before making a decision. For a practical trading experience, a Forex demo account should be featured where you can try your hands before going live. Do not invest real money if you haven’t fully understood how the platform works.
How To Stay Safe While Trading Forex
You should avoid any unlicensed Forex broker in Africa. The amount of Forex scams in African countries is on the high side, and it has resulted in grave losses for the victims. By going with a well-licensed broker, this risk is almost eliminated, and you can trade more assuredly.
Additionally, you should be cautious when making a substantial investment when you don’t fully understand the Forex market. Likewise, you should control your emotions and don’t spend all your money on Forex trading.
Conclusion – The Future Of Forex In Africa
Interest in Forex will undoubtedly continue to rise in the coming years. The sensitization level is currently high as Forex trading is advertised on newspapers, TVs, radios, websites, etc.
There are equally Forex seminars and programs to create awareness. More overseas Forex brokers are also picking interest in offering their services to African countries. Consequently, better regulatory policies will be imposed in countries that lack them so that aspiring traders can trade safely.
Forex trading can be an exciting and lucrative activity, but it can also be tough, especially for beginners. Newcomers underestimate the important of financial education, tend to have unrealistic expectations, and struggle to control their emotions, pushing them to act irrationally and impair their overall performance.
What is the Forex market?
The Foreign Exchange market, also called the Forex or the FX market, is an over-the-counter market where the world’s money is exchanged. Many players trade the Forex market, such as institutional investors, central banks, multinationals, and commercial banks, among others.
As a retail trader, you can access this market with a Forex and CFD broker and make money by buying or selling currency pairs. Currencies are always quoted in pairs – for instance, in the EUR/USD currency pair, the EUR is the “base” currency, while the USD is the “quoted” currency. The quoted currency is always the equivalent of one base currency. If the EUR/USD exchange rate is worth 1.1222, then you will get $1.1222 for €1.
In our example, we can see that the EUR/USD has 4 decimals. This is typical of most currency pairs, except those that involve the JPY, which only display 2 decimals. When a currency pair moves up or down, the change is measured in “Pips”, which is a one-digit movement in the last decimal of a currency pair. When the EUR/USD moves from $1.1222 to $1.1223, the EUR/USD has increased by one “Pip”.
When you look at a currency pair quotation on your broker’s platform, you will see two prices: a selling price on the left (bid price), and a buying price on the right (ask price). The difference between both prices is called the “spread”. This “spread” is pocketed by the broker, and is one of the main ways in which they make money.
The Bank for International Settlements declared in its last triennial survey that the daily average trading volume of the Forex market reached more than 5 trillion US Dollars. It also shows that, due to this huge volume, the Forex market is the most liquid market in the world. Liquidity refers to how easy it is for traders to open and close their trading positions without affecting the price of the underlying asset. Liquidity is a good indication of how active a market is.
The concept of liquidity also works hand-in-hand with volatility, which measures the way in which market prices change. Volatility is something to be welcomed, as it is volatility that gives traders the opportunity to make profits, especially for short-term traders like scalpers and day traders.
What are the different trading styles?
As a Forex trader, there are different trading methods you can use, with the main styles being:
Day trading and scalping are two of the most aggressive and active trading styles. In both cases, all trading positions will be closed before the end of the trading session. Where these 2 styles differ is in trade frequency – scalping is about taking advantage of very small price changes, often buying and selling within a few seconds or minutes, while day traders may hold a position for up to several hours. While day trading and scalping are very short-term trading methods, swing trading is longer-term, with positions held up to several weeks.
Depending on the trading style you choose, you will use different types of orders. For instance, “market” orders will be used by scalpers more so than by swing traders, as these orders offer the best available price for you to enter or exit the market instantly.
For day trading or swing trading, “limit entry” orders will be more useful, are they allow traders to enter the market at a pre-determined price (“buy limit” orders are for when you want to open a “long” position, and “sell limit” if you want to open a “short” position).
As Forex trading is often offered with leverage, potential profits are magnified, along with potential losses. For this reason, it’s important to use stop-loss orders to limit your losses if the market goes against you. One of the best ways to mitigate your risk is to trade with the trend.
How important is the trend in Forex trading?
The trend is at the heart of one of the most popular techniques for trading the Forex markets – technical analysis. This strategy follows 3 assumptions: prices discount everything, history tends to repeat itself, and prices move in trends.
Therefore, when a given currency pair exchange rate moves, the market trends. While most traders think that prices can only go up or down, Charles Dow’s theory asserts that there are in fact 3 trends in the market: up, down and “sideways”.
According to Dow, you need to analysis highs and lows to be able to determine a trend. An uptrend is formed by higher highs and higher lows, while a downward trend is formed by lower highs and lower lowers. When neither the “bulls” (buying investors) nor the “bears” (selling investors) have control of the market, prices evolve within a lateral consolidation, also called a “range”.
Dow’s theory shows that each trend is formed by 3 other trends: a “primary”, a “secondary” and a “minor” trend. A primary trend usually lasts more
than a year and describes a bullish or a bearish market. Within the primary trend, the secondary trend usually goes against the main trend – it represents a corrective movement, or a “pullback”, lasting between 3 weeks and 3 months. Finally, a minor trend represents the noise of a market within the secondary trend, usually lasting less than 3 weeks.
How can candlestick analysis can help you fine-tune your entry and exit timing?
Candlestick analysis is a Japanese type of chart analysis that goes back to the 18th century. It is still one of the most popular ways to read charts today. Candlesticks are used to make better trading decisions by analyzing prices through the “body” and “wicks” of candles to decide when and where to enter or exit the markets.
A bullish candle usually has a white or green body, while a bearish candle will usually be black or red. Candles describe market participant psychology through their wicks (also called “shadows”), which show the volatility and the intensity of the movement through the highest and lowest level reached. The longer a candle, the more intense the buying/selling pressure. Conversely, the shorter the candlestick, the more indecisive the market.
Candlestick analysis is quite an effective way to analyze the markets, as it helps traders spot great trading opportunities through the visualization of “continuation”, “indecision” and “reversal” patterns in the charts.
The FX market is quite popular among newcomers, and has never been easier to access. If you use leverage and margin trading wisely, you can make a lot of money trading currencies. Learning the basics of Forex trading isn’t overly complicated. Deciding what kind of trader you are, based on your personality, and building your trading strategy accordingly, however, is a different story.
The more you know about Forex and trading, the better you will trade. So, be patient, dedicated, and committed to keep learning about trading and improving your strategy. Eventually, you will develop the skills to be profitable in Forex trading over the long-term.
The Forex market is the world’s largest financial market with a turnover in excess of around $4 trillion a day. Despite its huge size, this market has no central exchange for Forex traders to conduct their transactions. Instead, Forex traders must conduct their trading activities through an intermediary, the Forex broker. This shows the importance of the broker’s role in the trading process. When it comes to choosing a broker, traders have literally thousands of Forex brokers to choose from on the internet. But the real question is how can you be certain that the broker you have chosen is the right fit for your trading needs.
To help you in your broker selection process, we have prepared a guide with a list of key factors that you have to look at when choosing a broker.
The first thing that you should look at when selecting a broker is to see if the broker is regulated by a competent regulatory agency(read more about Forex and CFD broker regulations). By dealing with a regulated broker, you can have the assurance that the broker has met the operating standards imposed by the regulatory body. Some of these standard regulatory requirements include having adequate capitalization and maintaining segregated accounts in order to protect the clients’ funds. Additionally regulation offers fund protection should the firm become insolvent and ensures the broker is upholding rigorous standards as a financial service provider.
Countries that have financial regulatory agencies that are backed with strict regulatory enforcement include:
As the trading platform is your gateway to the market, you want to ensure that the trading platform that you are using can be relied upon. Most brokers will offer traders a selection of trading platforms to choose from. Most of the time, the trading platforms are provided by third party trading solutions providers such as MetaQuotes Software. There are also some brokers who have taken to developing their own proprietary trading platforms in an attempt to differentiate themselves from other brokers in the industry. Often times, these proprietary platforms are the best platforms to trade with as they are specifically designed by the broker’s client base.
Nevertheless, a good broker should be able to provide a good selection of platforms. This is because some traders prefer to trade from the desktop computer and some traders prefer to trade from their smartphones. It should be noted that the most common trading platform that you will find among the different brokers in the industry is the MetaTrader 4 platform. It is estimated that at least 85% of brokers in the industry uses the MetaTrader 4 platform. So this means there is a very strong possibility that this is one of the platforms that you will be using.
Look at the features which the trading platforms have to offer. Do they come with:
Comprehensive charting package
Wide range of technical indicators
One click trading on the trading platform
Risk management tools such as stop loss order and trailing stops.
While all these may seem trivial initially, they will later play a crucial part in ensuring that you will get to enjoy a seamless and productive trading experience.
But when it comes to platform selection, it is really a matter of personal choice. Most of these platforms will have the same basic features. The best way for you to find out which platform is right for you is to try them out with the demo account provided by the broker. For those brokers that do not provide a demo account, they may not be worth considering.
Commissions & Spreads
This market unlike other traditional financial markets mostly operates on spreads rather than commissions. This is the reason why most brokers advertise their services as being commission free.
So how do brokers make money?
Simply, they earn by charging traders a spread. The spread is the difference between the buying price and selling price. For example if the Bid & Ask price for the EUR/USD currency pair is 1.0875/1.0878, this means the spread is 3 pips.
As a Forex trader, you will come across 3 kinds of trading cost structure charged by a broker:
Fixed spread – where the spread is not changing and you know the spread amount before you trade.
Floating spread – this spread is variable and always moving depending on the market volatility.
Commission fee – this is calculated as a percentage of the brokers spread. You should be aware of the amount payable before you trade.
Generally for traders looking for certainty with their trading costs, fixed spreads will be the preferred choice. Traders who are looking to pay a smaller spread would prefer floating spreads. Ultimately as to which is better will depend on your specific trading needs.
The kind of spreads that you will receive depend to a large extent on the kind of business model the broker is operating on.
Broker’s Business Model
In the course of your search for a broker, you will come across terms like “STP”, “ECN”, “NDD” and “Market Maker”. All these terms are in fact used to describe the business model which the broker is operating by. So what do they all mean?
There are two major types of broker – Dealing Desk and Non Dealing Desk.
Forex dealer or Market Maker processes their clients trading instructions through a dealing desk within their company. A dealing desk broker takes the other side of the trade to you, meaning when you open a position like the EUR/USD the trade will be executed by the broker and they are then exposed to that trade.
A Non-Dealing Desk (NDD) broker passes the trade straight through to a third party. There are two kinds of NDD broker (ECN and STP). They are both essentially the conduit between you the trader and the market maker or dealer.
With the first type (ECN) when you press “Buy” on your trading platform, your trade orders will be processed on the broker’s computer trading system automatically and transmitted through the Electronic Communications Network (ECN) without a dealing desk (This is where the term “Non Dealing Desk” (NDD) comes from).
With the second type of NDD broker, upon receiving your trade orders they will pass the trade orders directly to another party to be executed by the market maker’s dealing desk. In this instance, the broker is known as a Straight Through Processing (STP) broker.
Both the Forex ECN and STP brokers are intermediaries to several dealing desks or market makers in the global Forex market. Market makers or dealers will transmit their pricing to the ECN or third party liquidity provider together with the volume which the quote is valid for. The ECN/STP will in turn distribute the pricing to traders/market makers linked to the system. It should be noted that the ECN/STP does not execute trades but rather acts as the conduit for transmitting the trade orders from the trader to the dealing desk where the trader took the price from.
Why is this important?
The business model of the broker is important as this will affect the kind of spreads that you will receive and whether the spread will be fixed or variable.
Forex Broker for Beginners
For beginner traders, look for brokers with the following qualities:
Comprehensive trading education resources – many brokers supply a suite of education materials to help push traders into mastering their skills. These usually include webinars, videos, courses, guides and articles.
Unlimited access to the demo account for practice trades – most if not all Forex brokers supply demo-trading accounts to their clients. This is particularly useful if you are new to the world of Forex trading or if you’d like to test-drive a broker’s platform before you trade for real.
User friendly trading platform – there are a whole host of trading platforms on the market, some more complicated than others. As a beginner trader you will not need a complicated platform with features like EA’s and complex trading strategies. That comes later, but now you should be looking for a platform that is fast and simple to grasp.
For professional traders, their trading needs differ significantly from those of a beginner trader. Generally, professional traders prefer brokers which can provide them with:
Comprehensive trading tools – as a professional trader you will now need a variety of tools including commission calculator, economic calendar and of course complex live charts in order to implement trading strategies.
High leverage – not for the faint hearted, professionals will seek to use leverage in order to multiply their capital. Leverage increases the risk and equally increases the reward.
Low spreads – if you trade a lot you want to ensure that your spreads aren’t eating away at your capital. It’s important to check the spreads payable before you select a broker, usually the greater the account type you take the lower are your spreads.
Forex Broker for Day Trading
Generally for a day trader, most brokers will be able to meet their trading needs. However given the shorter time period with day traders are trading with, it is best that the broker is able to provide a diverse range of instruments for the day trader to scout for trading opportunities. These can include a signal service, tools like an economic calendar, updating market news and also earnings reports. As you will probably be placing more short term trades make sure that you are aware of the spreads before you trade.
Forex Broker for Scalping
Scalpers are traders who hold their market positions for an extremely short period. While they only hold a market position a short period of time, the frequency of their trades is higher than the average trader. Their objective is only to make a small profit on all the trades that they make spread across a large number of trades. Note that not all brokers allow scalping. As such if you intend to trade as a scalper, you should always check with the broker that you intend to sign up if they allow scalping.
The majority of the forex brokers in the industry offer traders a selection of trading accounts to cater for different categories of traders.
Micro Account – The smallest type of trading account is the Micro trading account where one trading lot is equivalent to 1000 units of the instrument traded.
Mini Account – The next type of trading account higher up the hierarchy is the Mini account where one lot represents 10,000 units.
Standard Account – The standard account is where one lot is equivalent to 100,000 units.
With the Micro and Mini account, only a low minimum initial investment is required to let you start trading. With the standard account, although the minimum investment may vary from broker to broker, generally you will need a higher amount of trading capital. Given the varying minimum investment for each type of trading account, you should select the trading account that is commensurate with your investment capital.
Most beginner traders tend to forget to factor in customer service when making their choice of the broker to sign up with. They may not realize the importance customer service plays in their overall trading experience. With customer service, it is not whether you will ever need their assistance but rather a question of when you will need their assistance. Because regardless of how experienced or knowledgeable a trader might be, there will always come a time when assistance from customer service is required. When that time comes, you want to be able to get in touch with the support team without any difficulties. So it is important to check if the broker that you intend to sign up with is able to provide you with reliable customer support.
Check to see if there are multiple ways of contacting customer support. Most brokers will provide their clients with several ways such as email, live chat and telephone for their clients to get in touch with customer support. In short, you don’t want to be in a position where you have to spend countless nights worrying about what your broker is going to do with your problem.
In an industry as competitive as the online forex trading industry, some brokers will try to distinguish themselves from other brokers, by offering additional value added services such as free market analysis, real time news feeds and trading signals. Most of these value added services are provided free of charge but there are some brokers which may require you to deposit a minimum amount before you can have access to these services.
Questions to Ask the Broker
If you have any general questions regarding brokers we can usually advise and recommend, however for more specific information you can read our broker reviews for deep insight. Our video reviews cover many aspects of the trading cycle. Please note, it is important that if you have any doubts about a broker’s product offerings or service, by asking the right questions you can clear up any ambiguity that you might have before they develop into an issue later after you sign up.
The kind of questions that you should ask include:
How the broker maintains the safety of your funds
The broker’s regulatory status
The range of instruments that is available for trading
Their business model
Their customer service hours
Their deposit and withdrawal process and whether there any fees involved
Whether there are any conditions attached to the value added services provided
Check our broker filter tool >>> FX Empire is perfectly placed to help our readers choose reliable CFD brokers to work with. We have compiled this resource, which looks at all the key factors a trader should consider before selecting a broker to work with. We hope you find it useful.
We are here to help with that! Check out our list above and choose the most suitable broker for you.
Should I Pick a Regulated Broker?
Yes, you should try to pick a regulated broker to work with. This ensures recourse in the event of a dispute or should your broker face insolvency. Remember by using a regulated broker you will also have access to an investor compensation fund, which insure your deposit up to a certain amount.
What Else Should I Look at When Selecting a Broker?
You should look at the range of platforms on offer and even ideally test-drive the platform you may wish to use. Take a look at the additional resources being offered by that broker eg. Signal service, educational tools, copy trading. Finally remember to find out about spreads, and account types before you place a deposit.
As noted above, there are many factors that you have to consider when selecting your broker. Nevertheless with the help of this guide that we have provided, you should be able to see which broker is better suited to your needs. To further facilitate your search, we have also conducted in-depth reviews and vetted each of the brokers in our recommended list to ensure they meet up the right standards. Once you have found the right broker to work with, you can focus more on your trading activities and trade more confidently thereby increasing your chances of success trading the market.
One of the biggest risks when using Forex brokers that aren’t under regulatory supervision is that they don’t have to conform to any established standards, and so unethical – or even illegal – behavior cannot be ruled out. Worse, should something happen, there is often no way to take legal action against them.
Forex broker regulations are thus essential – they ensure that you’re trading with a broker that adheres to standard business norms, acts in your best interests, and offers some manner of financial protection.
Selecting the right broker starts by checking that it is truly licensed, regulated and authorized where you live. In addition to a broker’s regulatory status, you need to know which regulatory body it belongs to, as they do not all follow the same kind of regulations or offer the same type of financial protection.
Regulators around the world have tightened regulations to protect traders in recent years, with increased oversight from regulatory bodies such as the SEC in the US, the FSA in the UK and the CySEC in Europe. Typically, Forex brokers are required to deal with top-tier financial institutions and liquidity providers, as well as to keep their client funds in separate accounts. FX brokers also need to meet certain other criteria, such as capital and fiscal requirements.
Comissão do Mercado de Valores Mobiliários (CMVM) in Portugal,
Malta Financial Services Authority (MFSA) in Malta.
Members of the European Union, under the supervision of the MiFID directive – which we talk about later – are allowed to “passport” an authorization received from a European regulatory body, to be allowed to operate legally within the European Union (EU) as well as within the European Economic Area (EEA).
One of the most attractive regions in Europe to set up a forex company is Cyprus, due to its advantageous fiscal and tax structure.
So, if a financial company decides to set up shop in Cyprus, it will be registered, licensed, authorized and operate under the Cyprus Securities and Exchanged Commission (CySEC), which monitors the financial markets with the support of the European regulatory authorities and the European Commission to protect traders.
But this company would also be able to legally offer its financial services in other countries in the EU and the EEA, and it will be registered in every local European regulatory body.
To be a CySEC Forex broker, as of April 2019 a financial firm must follow certain rules, such as*:
An initial share capital of at least €200,000,
At least €750,000 in operating capital,
Submit regular financial statements, as well as yearly audit reports through certified independent third-party auditors,
Ensure the protection of clients funds by holding them in segregated accounts, and using top tier 1 banks and quality liquidity providers,
Adhere to the Investor Compensation Fund (ICF), which means that in case of bankruptcy, each client can recover up to €20,000.
To verify the authenticity of a CySEC regulated broker, always look for the 5 digit CySEC License Number (CIF) on the broker’s website:
Then verify the license on the CySEC website and make sure that the domain on CySEC website is the broker’s one:
Warn their clients about risks involved and categorize them (retail investors vs. professional investors),
Display their prices,
And act honestly towards their customers.
However, transparency in the financial markets did not improve following the establishment of MiFID, with the 2007-2008 financial crisis highlighting the lack of liquidity, settlement and delivery defaults, as well as the circumvention of the transparency principle through highly secret platforms, known as “dark pools”.
In light of these issues, the European Commission considered a revision of this regulation. MiFID II, which went into effect last year, thus aimed to address the grey areas in fast-growing OTC markets, particularly for derivative products. The direction also wants to work for better investor protection by ensuring that consumers have a clear understanding of the financial products in which they invest.
For instance, it is now necessary for a broker to assess a future client’s knowledge and risk profile before doing business with them. It is, therefore, a question of selling the right financial product to the right customer. To do this, a broker usually asks future clients a few questions about their personal and financial situations, but also about their knowledge of the financial markets and trading.
Brokers must also comply with procedures to be sure they know their clients and where the money used for trading comes from – Know Your Customer (KYC) and Anti-money laundering (AML) procedures.
To sum up, this new directive is supposed to enhance the transparency of regulated platforms, as well as of the financial markets, improving trader protection through better business conduct.
The European Securities and Markets Authority (ESMA)
Because of high leverage and margin trading, retail investors have lost a lot of money over the years on the Forex market trading CFDs.
A leverage limit of 30:1 for major currency pairs, 20:1 for non-major currency pairs, and 2:1 for cryptocurrencies,
50% margin closeout rule,
Negative balance protection,
Restriction about the incentives offered by brokers to trade CFDs,
Standardization of a risk warning showing the average retail investor’s percentage of losses on CFDs accounts.
On March 27th 2019, the ESMA decided to renew these restrictions on CFDs for another 3 months from May 1st, 2019.
As the UK is still in the European Union until at least April 12th, this means that UK firms must comply with ESMA’s decisions and measures until then. However, the FCA Forex regulation could change, as it declared that it “expects to consult on whether to apply these measures on a permanent basis to UK firms providing CFDs to retail clients.”
The ESMA is constantly publishing updates linked to the Brexit situation and the recognition of UK central counterparties (CCPs) like LCH Limited, ICE Clear Europe Limited and LME Clear Limited, and Central Securities Depository (CSD) like Euroclear UK and Ireland Limited.
In the UK
According to the BIS Triennial Central Bank Survey 2016, the UK hosts the most important sales desk in the world, via its trading hub in London. It alone processes 36.9% of global OTC Forex turnover.
In order to prevent broker scams, financial malpractice or other types of fraud affecting traders, there are 2 important financial regulatory bodies in the UK, the FCA and the PRA.
To be able to undertake financial services activities in the UK, a broker needs to be authorized by the Financial Conduct Authority (FCA). This national regulatory body ensures consumer protection while guaranteeing the integrity of the financial markets in the UK
The Prudential Regulation Authority (PRA), which belongs to the Bank of England, helps in developing ethical and professional standards to protect the financial firms it is responsible for, so that in the case of a failing financial firm, there is no real impact to the financial markets or the taxpayers.
To be an FCA Forex broker, a broker should adhere to strict guidelines, such as:
Having at least £1,000,000 in operating capital,
Submitting audit reports and financial statements,
Ensuring the protection of client financial funds with the Financial Services Compensation Scheme (FSCS). This scheme is about protecting clients in case of bankruptcy of insolvency. If an investment firm failed between January 2010 and Mar 31st 2019, a client can ask for £50,000. If it failed after April 1st, you could be compensated up to £85,000.
In the USA
With 19.5% of global OTC FX turnover, the United States is the world’s 2nd most important sales desk. To regulate the Forex markets, and other derivative and OTC markets, there are 2 main regulatory bodies, the NFA and the CFTC, who work together.
The National Futures Association (NFA) helps investors to be more protected. The NFA also works to ensure its members respect their regulatory responsibilities for better market integrity, fighting scams and fraud through best financial practices.
The NFA also works with the Commodity Futures Trading Commission (CFTC). Together, they fight systemic risk, and ensure traders of the quality and reliability of Forex firms regulated by them.
In 2010, the CFTC issued regulations. Among those, the leverage used by retail trades was limited to:
1:50 for major currency pairs,
and 1:20 for all other pairs.
To be an NFA and CFTC FX broker, a broker must follow the below rules:
Follow safe and transparent best market practices:
hire knowledgeable and professional staff,
use real facts and numbers in advertising and promotional materials without misleading traders,
submit reports and financial statements that are later on published on the NFA website,
follow the FIFO rule (first in, first out),
never open positions against its clients,
never allow hedging for traders,
offer a leverage effect of 50:1 maximum,
Keep client funds in segregated accounts,
Have at least $20,000,000 in operating capital.
The Australian Securities & Investments Commission (ASIC) is the main regulatory body supervising the securities and investment market in Australia. It works with various regulators and organisations in protecting consumers and investors.
For instance, ASIC works with the Australian Prudential Regulations Authority (APRA), which supervises financial institutions to maintain the safety of financial institutions.
To be able to conduct financial service activities in Australia, brokers are required to have an Australian Financial Services (AFS) licence. As an ASIC Forex broker, certain criteria must be followed:
At least AUD 1,000,000 in operating capital,
A representative office in Australia,
Must comply with the organizational competence obligation in s912A(1)(e) of the Corporations Act 2001 (Corporations Act),
Adhere to a professional indemnity (PI) insurance cover,
Total financial transparency, with the submission of periodic audit reports,
Work with tier-1 banks, keeping client funds in segregated accounts.
In South Africa
Regulation in the financial sector in South Africa was maintained by the Financial Service Board (FSB) but it is now in the hands of the Financial Sector Conduct Authority (FSCA). The core mission of these regulatory bodies is to protect investors from losing money through scams and fraud thanks to a safer, more transparent and reputable trading environment.
The FSCA is quite new. It was created in April 2018, as “the start of a new, more holistic and intensive approach to regulating the conduct of financial institutions operating in South Africa – focusing on how they treat financial customers and on how they support the efficiency and integrity of the financial markets”.
The Forex market is one of the most volatile markets in the world. This highly leveraged market is also an unregulated market, with no real international regulatory body that monitors currency trading world-wide.
However, we’ve seen that there are national regulatory authorities that are working on protecting Forex investors. In addition, a Foreign Exchange Working Group (FXWG) was created in 2015 to provide global good practices for the FX market. In May 2017, this group published an FX Global Code to provide a set of guidelines to promote market integrity and protect traders against large losses, scams or other financial manipulation.
It is therefore essential that before investing real money on the Forex market with a specific broker, you check its regulated status.
In Europe, for instance, you can make sure the broker you want to make business with is regulated and authorized to provide investment services by an EU regulator on the ESMA website. In addition, each country’s regulatory body keeps a record of all the firms it regulates.
The ESMA also keeps a list of companies (or persons) that offer (or are suspected to offer) services without proper authorization. More details about these companies/persons can be found on the websites of the regulators. There is also the International Organization of Securities Commissions (IOSCO) website, which ggathers alerts and warnings from the IOSCO’s members in its “Investor Alerts Portal”.
Choosing a broker that is regulated in one place is good, but it’s always best to pick one that is regulated in several countries. For instance, Tickmill is registered in three different places – firstly, as a Securities Dealer by the Seychelles Financial Services Authority (with the FCA via Tickmill Ltd), secondly, by the UK FCA via Tickmill UK Ltd, and thirdly, by the CySEC as a CIF limited company, via Tickmill Europe Ltd.