When choosing a broker, you need to consider a whole range of criteria, which we will explain in detail here. Because there is no general broker recommendation and even multiple Forex test winners do not fit every investment strategy.

Trading offer

There are many different forex brokers to choose from for foreign exchange trading. Some specialise in forex pairs, others offer other CFDs and underlyings such as shares, ETFs, commodities, indices or bonds.

However, you cannot necessarily conclude the quality of an FX broker from the mass offered. Some trading platforms can offer the best conditions and a lot of additional information due to their specialisation, while others convince with their broad spectrum and the possibility of risk diversification.

Costs

Favourable conditions are mandatory if you want to maximise your profits. This is because many beginners in Forex trading underestimate how high the deductions can be on a trade.

Not every price model is suitable for every investor: Broker A is particularly favourable for very active traders, while Broker B offers attractive prices especially for occasional traders. Here you have to find out exactly which fees are critical for you and compare them with each other.

1) Basic fee

In Forex trading, custody account fees are rather unusual and are charged, if at all, by custodian banks.

All FX providers operate at mt5 download on the internet and have a very lean company structure. They pass on these cost advantages to their clients, which is why no custody fees are charged.

2) Spreads and other trading costs

The spreads are the main source of income for Forex brokers, which is why many other costs such as custody fees or other trading fees are usually omitted.

For the most common currency pairs, the spread should not exceed 3 pips. Heavily traded markets such as USD/GBP are sometimes offered at less than 1 pip, but can cost twice as much with another provider at the same time.

currency exchange

Pips are also relatively low during peak trading hours, especially when many exchanges are open at the same time.

3) Overnight financing

If you hold a position in your securities account until the next trading day or over the weekend, you will incur financing costs. These are also known as roll-overs.

Usually the payment amount is based on the difference between the currency interest rates. In addition, there is an internally defined surcharge, which is approximately 2.5% of the trading volume.

4) Deposit and withdrawal fees

Deposits are always free of charge unless a foreign currency is deposited. Otherwise, a conversion fee is always charged, which can be 25 EUR or more per deposit and deposited currency.

Withdrawal fees are more common and can significantly reduce profits. But there are also Forex brokers that do not charge withdrawal fees.

5) Inactivity fees

As with any CFD broker, forex inactivity fees apply once you have not logged into your account for a year or more.

The amount varies greatly between FX providers, usually monthly amounts between 10 and 25 EUR. These are deducted from the existing capital until there is no more coverage. In this case, the Forex account is usually closed completely.