Rating of Forex Brokers' Trading Accounts

Some Forex brokers offer a wide choice of account types, another provides one package with numerous setup options. One of the fundamental moments is a variety of account types. It is important the company to offer flexible trading conditions with acceptable sizes of spread and leverage corresponding to the trader needs with the different level of knowledge and experience.

That is why GuruTrade in collaboration with a team of experts developed the Rating of Forex trading accounts which increases the searching efficiency of the best trading conditions on the basis of impartial comparison of their main characteristics.

Conditions and Parameters of the Forex Trading Accounts Rating Calculation

Forming the Rating of Forex accounts we used the complex principle, considering 14 key trading parameters of the client account.

1. The average spread on EURUSD (pips)

Each trader looks for the trading account with the tighter spread. The average spread value of such popular currency pair as EURUSD is an important indicator of optimum trading account type search:

  • From 0,00001 to 0,99999 = 100 points
  • From 1,00000 to 1,99999 = 50 points
  • From 2,00000 to 2,99999 = 20 points
  • From 3 pips above = 0 points

Large average spread on EURUSD substantially reduces attractivity of the chosen account type, the average size of an indicator can guarantee to the trader stable working conditions on it, the smallest average level of spread will allow to obtain the largest profit.

2. The minimum spread on EURUSD (pips)

The indicator of a minimum spread level determines the lower level of the range of spread change for this account type:

  • 0 pips spread = 100 points
  • From 0,00001 to 0,99999 = 70 points
  • From 1,00000 to 1,99999 = 20 points
  • From 2,00000 to 2,99999 = 10 points
  • From 3 pips above = 0 points

Minimum possible spread level allows the trader to estimate a potential benefit from his tightening at some moments of the trading session. Buying or selling a currency with wide spread, the trader loses directly a profit share, concluding the bargain on obviously the worst price. In case of the low spread which is coming nearer to the minimum sizes, these losses will be reduced.

3. Number of trading platforms

There is an opinion that the success on Forex depends on the chosen software, and the convenience of its use, it is only a matter of time and habits. But if the broker offers several types of trading platforms, it gives to the trader additional opportunities for maneuver testing a new strategy or increasing its quality:

  • Each platform = 10 points

It is worth noticing that at different stages of professional development traders need various types of the software, therefore availability at the broker of several types of trading terminals would be an asset.

4. WebTrader availability

WebTrader is the trading platform available to use on any device and operating systems without installation of the additional software:

  • WebTrader availability = 50 points

WebTrader is one of the most modern types of trading platforms, which allow to start trading in the shortest possible time, without wasting time on installation and adjustment of the special software. To start trading, you will need the device with Internet access. The web trading platform possesses all functions and tools necessary to guarantee high-quality and effective Forex trading from any Internet browser.

5. Mobile terminal availability

The mobile trading terminal allows trading in the international exchange market directly from your mobile device:

  • Mobile terminal availability = 40 points

The rhythm of modern life dictates the rules. Now, almost all services and applications are available on smart phones and mobile devices. Forex market trading isn't an exception - thanks to the mobile terminal you get access to a fully-featured trading platform with indicators and quotes on your mobile gadget.

6. The minimum account size (USD)

By now the starting Forex account size (the minimum deposit) considerably decreased in comparison with the last decade. Today, many brokers provide an option of opening the trading account with the initial amount of only 1 to 5 US dollars:

  • From 0 to 99,99 = 50 points
  • From 100 to 499,99 = 40 points
  • From 500 to 999,99 = 30 points
  • From 1 000 to 9 999,99 = 20 points
  • It is higher than 10 000 USD = 10 points

The low starting amount allows traders with the minimum finance costs to get access to all complex of the services provided by the broker and to estimate in practice the level of trading conditions and their quality.

7. The commission per 1 lot (one way) (USD)

For some rendered services by the broker a certain payment in the form of the commissions can be charged from clients. These fees compensate to brokerage company part of its costs for development of services and allow expanding trade opportunities for clients:

  • No commission = 50 points
  • From 0,01 to 1,99 = 40 points
  • From 2,00 to 2,99 = 20 points
  • From 3,00 to 4,99 = 5 points
  • It is higher than 5 USD = 0 points

The amount of the charged fee significantly influences the size of the profit got by the trader. The broker should provide an accurate and clear explanation of rule charge-off commission and its size in each case or a situation. This point is extremely important for the trader and his trading plans.

8. Stop Out level (%)

The Stop Out level allows closing compulsorily transactions of the client, preventing the balance entering a negative zone:

  • From 0 to 10% = 20 points
  • From 11 to 25% = 15 points
  • From 26 to 50% = 10 points
  • From 51 to 100% = 5 points

To exclude the situations when a number of the traders' losses exceed the size of means on his account, broker companies establish critical border in the form of Stop Out limit, achieving which unprofitable orders on the account are compulsorily closed at the current market price. Thus, the positive balance of the trading account remains, preventing the owner from paying to the broker additional compensation. The Stop Out size is calculated on the current level of Means (Equity) of the trading account, including not only available funds of the deposit, but also all open orders with the unrecorded financial result (so-called “floating” profits and losses).

9. Scalping

The scalping is the progressive trading strategy which is very popular among traders:

  • Allowed = 50 points
  • Limited = 20 points
  • Forbidden = 0 points

The scalping strategy basis consists of making numerous short-term trading activities in which the insignificant size of the profit is compensated by numerous transactions and as a result, the quite good income. The possibility of scalping is an important factor of brokers estimation because this style of trade is enjoyed by many traders.

10. Trading via API

API connection gives to the traders the opportunity to use broker's functionality through the service package expanded in comparison with a standard:

  • Possibility of API connection = 50 points
  • No API connection = 0 points

API connection is performed in the execution of special customer requirements, providing them access to high liquidity with preserving all other trading parameters, including the speed of order execution.

11. Browser trading platform

It is the web application created in Java or Flash code, for conducting trading which guarantees a stable connection to the Network and any Internet browser:

  • Available = 25 points
  • Unavailable = 0 points

The trader does not always, has an opportunity to be constantly at home, at the computer. In such cases, Forex work can be performed from browser trading platform from any mobile device, the laptop or the tablet computer having an exit on the Internet.

12. Number of currency pairs

Currency pairs are the main trading instrument in the foreign exchange market. They can be divided into three primary groups: majors, cross-rates, and exotic currency pairs. The width of a currency tool choice, available to trade, determines the range of the opportunities opening in front of each trader:

  • Up to 30 = 10 points
  • From 30 to 60 = 15 points
  • From 61 to 100 = 20 points
  • More than 100 = 25 points

The number of available tools influences the quality of currency pair choice, most compatible to a trading strategy, and also helps to react most effectively to the developing market situation by the transition from one trading instrument to another.

13. Account currencies

When the trader opens the account he faces a question, in which currency to open it. A classical choice of traders majority is the real dollar account, however, there are other options:

  • Each currency = 5 points

The more basic account currencies the broker offers, the more advantages get the client of the company who reduce the losses by converting deposit/withdraw funds. The optimum choice of basic currency can also affect positively the effectiveness of the trading strategy used by the trader.

14. CFD, metals

Trading instruments aren't limited only to currency pairs, in addition to currencies, the trader can make trading activities with CFD contracts and metals. Tools of the CFD group represent the contracts for a difference, allowing earning both on the increasemnt, and on the depreciation of a given asset. The metals presented by gold and silver are trading instruments with high liquidity:

  • Forex = 0 points
  • Gold, silver = 2 points
  • Other trading instruments = 5 points for every

Each trader aims to create the most profitable and effective trading strategy. A guarantee of stable results in the exchange market is trading diversification through the use of various financial instruments where each additional tool gives to the trader new opportunity of earning.