What are the best Forex brokers? We have made an analysis and try to show you on our broker reviews website which FX brokers are the most reputable, serious ones and which ones are just scammers. After all, nobody wants to trade with a FX broker that is a well-known scamming company. We will first show you the most common Forex scams and then present you a list with some of the most reputable Forex brokers.
Hint: If you don’t want to read the whole article: the best reputable FX broker in our test is AvaTrade.
Scam and Fraud by Forex Brokers
The typical cases of scam or fraud by Forex brokers are:
Withdrawal of money is not possible: you have deposited money, completed a few trades successfully and now want to withdraw some of the money earned. This money could buy you a new watch, a car or just a fine dinner with wife or a close friend. Unfortunately, while depositing money at that broker was no problem, the withdrawal of your funds seems to be impossible. And your inquiries remain without reply as the customer service suddenly stops answering them. Too bad that you traded at a scam FX broker and have been ripped off.
Bonus deleted: you decided to deposit $1,000 instead of the planned $600 in order to get a higher signup-bonus and start trading. As soon as you want to withdraw some of the money won, the bonus has disappeared. Your inquiries at the customer service department are replied with shady arguments as to why they cancelled your bonus. However, not every case about cancelled bonuses is a scam. Our advice is to read the bonus terms first before you make a deposit. It’s often the case that you must have completed a certain number of trades until you are eligible to get the bonus. By making a withdrawal before completely clearing the bonus, you may void the entire bonus. It is also possible that there was a time limit of for example 60 days to unlock the bonus offer. Thus, it may have been just a misunderstanding and not a rip off through your FX broker.
High spread: there are cases of traders who reported too high spreads at their Forex brokers. While the spread offered might be just 2 pips on EUR / USD, traders are charged a higher spread. Often, this is not a scam by the FX broker: most Forex brokers offer different account types, such as silver, gold and platinum accounts. In order to benefit from favorable spreads, you need to be at least a gold or platinum account holder, for example. So you have to make a high initial deposit in order to be able to profit from the low spreads. Our recommendation is to read the T & C (Terms and Conditions) of your FX broker carefully before making a deposit.
Poor rates for traders: this is a very unfair practice of Forex brokers, because it is difficult to detect. Imagine that your broker offers foreign currencies at a more expensive rate, and that the broker will buy currencies at a cheaper rate than the market price. Even if the difference between the market price and the rate of your broker is only 1 pip, this increases your costs on each trade and reduces your winnings. Such frauds are fortunately rare.
Reputable, Serious Brokers Withoug Scam
So what are the most reputable Forex brokers? And which ones should you avoid? We made an attempt to spot rogue brokers and thus created a list with the most reputable brokers. The list does not include all brokers, but shows you some of the FX brokers that can be recommended for online FX trading.
So how did we create that list of the most reputable brokers? We used the search engine Google. Even though the research was done on Google.de, we think that the results are also relevant for traders from other countries in the world. First, we made a search for the brand name of each FX Broker and counted the number of results in German. For example, the search for “Finexo” led to 12,800 hits. Then we have searched for the company name plus the terms “fraud, ripoff, scam or criminal charges”. In the example of Finexo this led to 144 hits. We could thus calculate a ratio: How many web pages mention scam, and how many pages in total mention that FX broker? The lower the percentage of sites that mentioned scam, fraud or rip-offs, the more serious and reliable that FX broker must be. For Finexo, this gave the low value of 1.1%. Only around one out of hundred German websites that mention Finexo also mentions words like fraud or scam on its page. Of course, this is only a simplification of reality. If someone writes in a forum: “AvaTrade is not a rip-off”, then this would be counted as a criticism of AvaTrade. Nevertheless, we believe that the results of this survey are a good indicator of which FX brokers are serious, reliable companies.
Results Reputable FX Broker
In the following diagram, you can see the ratios of “scam search results” to “all results”:
We have deliberately chosen not to mention the worst three brokers by name – because of the limitations of the analysis mentioned above. The middle three brokers (LiteForex, Forex4You, FXOpen) were significantly more often mentioned together with the terms “scam”, “rip-off” or “fraud” than the best brokers.
Our top 3 list of the most reputable Forex broker is therefore:
1st place: AvaTrade
2nd place: Finexo
3rd place: InstaForex
We have linked to our broker review pages of the three best brokers. Our winner in the list of the most reputable FX brokers is thus AvaTrade. The probably biggest broker in this comparison (AvaTrade scored more than twice as many search results as the second largest broker) seems also to be the most serious broker.
If you want to start Forex trading, then AvaTrade is certainly a very good choice. You can also first open a free demo account to gain some experience without risking your own money.