Brokers

One of the most important aspects of a trader’s plan is where to do business. There are many FX brokerages out there and each has its advantages and disadvantages. Until there becomes a centralized marketplace, traders are left to try to “decipher the code” of what makes one brokerage better than the next.

What we have attempted to do with these reviews is define the most important qualities that affect trading. When we receive reviews and/or complaints, by and large these are driven by one bad experience with a broker which may or may not be indicative of their overall performance.

That said, the criteria to review these brokers are as follows: reliability, platform, execution model, spreads, customer service, and overall value.

Website: www.fxcm.com | What do you think?

As one of the largest retail currency brokerages out there, FXCM offers “something for everyone”. Offering everything from micro ($50 min) to active trader (+$25K) accounts under a no-dealing desk model, clients both big and small can have access to some of the tightest spreads in the business. However, some traders claim that their customer service could be “less hurried”. Their platform is basic and reliable, and they also allow for trading with MT4. When trading with “the biggest kid on the block”, it can be easy to “get lost in the shuffle”. Which is just fine by some, who “get tired of annoying sales calls” at other brokerages. Overall, the combination of size, scope, and support has caused one rival broker to admit, “they are a finely-tuned machine”.

Website: www.dukascopy.com | What do you think?

Unfortunately for the average retail currency trader, Dukascopy is more geared toward the institutional-sized trader. Account minimums start at $5000 US, however at one time that minimum was $50,000 which coincidentally is the “preferred minimum” starting balance. As such, some critics feel “unappreciated” as “50K makes you a small fish in a big pond”. Dukascopy is a non-dealing desk model which is tied into Swiss FX Marketplace and is not currently registered with any regulatory authority although they have made application to receive a Swiss Banking license. As the non-dealing desk model is preferable, spreads are quite competitive though detractors complain that there “may not be adequate volume at different levels” which can affect executions. They do receive a commission on trades so this needs to be factored in to any comparison of spreads. All in all, Dukascopy is great for those who like to “fly solo” or have “more money than God”. N.B.: they do not currently offer MT4.

Website: www.forex.com | What do you think?

“The only one who ‘gains’ by trading with Gain is Gain itself”, quipped one frustrated customer. However, overall the consensus is that this outfit is “no scam”. While they do still employ the dealing-desk model, bringing the ire of those who don’t realize that dealing desks have come a long way since being known as bucket shops, the usual complaints (slippage, shading, re-quoting) exist. Nevertheless, they are regulated by all of the major bodies and are in good standing. Since the addition of MT4, traders are happier than “just having to rely” on the basic platform, while others seem content with the no-frills versions. Customer service is above average, causing one trader to offer, “I had a very pleasant experience with the rep, even though they wouldn’t give me my money back”. No major connectivity issues reported.

Website: www.oanda.com | What do you think?

We’ve always known Oanda to be a quality brokerage, but were surprised at the number of complaints about the reliability of their platform causing one irate customer to exclaim, “their platform goes down more than a….” Well you get the idea. The only other consistent complaint was about the widening of spreads during news events. Oanda’s policy is pretty clear regarding these events so make sure you are fully aware ahead of time so that the “resultant carnage isn’t a complete surprise”. This is probably due in part to their non-dealing desk model and their commitment to offer the same rates to everyone, eliciting the response that “you can’t be everything to everyone, try as you may”. All of the appropriate regulatory registrations are in place and overall customers seem happy.

One thing for certain when undertaking a task like rating brokers…. there are a lot of angry people out there!!! Seriously, all of these brokers are reputable and each have their pluses and minuses, so be sure to conduct your own due diligence when trying to determine which broker is right for you.

For the sake of full disclosure, forexnews.com is owned by FX EDU, LLC, an IB for FXCM.