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- Over 5000 tradable instruments
- Awarded Trader Pro platform
- Trusted by more than 100 000 traders
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Welcome at Trade-Test.com
In a world that brings visitors objective comparison of brokers for trading Forex, CFD and equity binary options. Extensive reviews will reveal the strengths and weaknesses of known brokers giving the traders the know how so that they themselves can decide which broker is best suited for them.
Regularly updated ranking of the best online brokers serves as a quick guidepost for visitors who want to quickly choose the best-rated broker.
Beginner traders will appreciate the list of free demo accounts , suitable for risk-free testing of forex trading or trading binary options. Everyone can, thanks to test accounts, test whether trading on the financial markets is appropriate for them.
With no risk and with real money you can trade with a number of brokers who are offering so called no deposit bonus, only for a short online registration.
To orient yourself in the exciting world of online trading and with the selection of the right broker this list can help:
7 steps towards profitable trading
1) To trade binary options or forex and CFD?
A frequent question of new traders is often whether it is better to start their trading career with binary options or via the traditional route of trading directly forex or CFD stocks and commodities. The differences between trading binary options and forex/CFD will be explained later.
This is a new financial derivate, which begun to be offered by the brokers around the year 2010. The main advantage of binary options is their simplicity and short duration of trades, so called Expiry Times: from 30 seconds to several days.
For a trader to start trading with binary options, they only need to have their own opinion on the movement of market prices of underlying assets. Who thinks the price will go up, buys so called CALL option, respectively „HIGH“. Who guesses the market will go down, buys the option of the type PUT, resp. „LOW“.
After the expiration time of the option has passed, which can be anywhere from 30 seconds all the way to a few days, the trade will be evaluated. If the trader guessed correctly, he will be credited with profit from 70% to 500% of their investment. Unsuccessful trade ends with the loss of the initial investment, which can range from one dollar to few hundred dollars.
Forex and CFD
Compared to binary options, trading forex and CFD (Contract for Difference) is relatively more complicated, due to the fact that there is no set time that occurs to evaluate the trade. Also there is no fixed amount that can be invested and the amount of profit or loss is not limited.
Entry to trade on Forex and CFD is generally the same as for binary options - either a trader buys, which speculates on the increase in prices, or sell, which speculates on the price decline. With how the price develops on the market the trader either profits or loses. It depends on the trader how long he stays with the trade – for some it can be profitable to stay with the trade just a few seconds, while other might prefer longterm investments, where dividends or interest are collected.
Demo account will make the decision easier
Who is not completely decided whether it is the better option to begin their trading with binary options or forex and CFD it will be of great benefit to try trading with so called trial demo accounts, with both forex / CFD brokers and binary options brokers.
Our article binary options demo account summarizes brokers with the best trial accounts, which are also completely free. Companies which provide this demo account without the need to deposit any money are clearly labeled.
Who wants the start building their trading skills on real markets with complex brokers will welcome the option of opening forex demo account for free.
A great alternative to starting to trade with real money without risking your own is to register with a broker offering so called no deposit bonus.
2) How much money to invest
Novice traders are often haunted by the question how much money to invest into their trading. The first rule is not to invest more than it is possible to lose. It is important to realize that trading is risky and there is always the possibility that the invested capital will be lost.
Every trader can afford to invest a different amount – for some it is alright to deposit 50 000 USD (over a million Kč), while someone else will feel comfortable depositing just 1 000 USD. If a trader managed a larger capital than they could afford or possibly afford to lose, the amount of stress they would be under would negatively influence their results.
Success in trading is often not seen on the very first day and it is therefore appropriate to comply with at least the basic rules regarding the amount of investment. It is advisable to follow at least the basic money management so that the investor will not lose their money before he is on the markets successful long-term.
A good rule of thumb for beginner traders is not to risk in a single trade more than 2% of your money. If a trader deposited for example 10 000 USD, a reasonable amount of his own money to invest in a single trade is 200 USD. If the deposit is lower, such as 1 000 USD, the same rule of 2 % would translate into risking 20 USD of own capital in a single trade.
Investors, which begin trading with too low of a deposit, for example just 100 dollars, have almost no chance of sticking to money management. Almost no forex broker will allow to open a position for just 2 dollars, the minimum is usually 5-10 dollars (the „better “situation is with binary options iq option allows opening positions from 1 dollar). Trader with deposit of 100 dollars is risking 5-10% of his deposit with a single trade and such exposure significantly increases the risk that a trader loses his capital only due to a chance.
3) Choosing an appropriate broker
For a long time Trade-Test.com has been focused on helping traders find the best suited broker and warned against fraudulent companies.
The foundation of objective reviews are detailed tests of trading platforms, analyses of legal background of companies, quality of licences of broker, sizes of spreads or commissions, opinions of other traders and our own experience with brokers.
Reviews (opinions) are assembled in the highest possible quality and objectively evaluate important aspects of individual brokerage companies. The opportunity to express one’s opinions in the accompanying discussions provide a comprehensive view of the particular company and adds experiences of other traders.
Provided below is a list of recommended brokers, with which we have excellent experiences. The choice of any one of them will not be a bad choice, since these companies are paying their clients, have valid licences, quality and fast trade platforms and have overall great experiences.
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What to focus on when choosing a broker
The foundation of successful market trading is the selection of suitable, quality broker. During our evaluations at Trade-Test.com we focus mainly on these parameters:
- Quality of licence and the reputation of the broker
- Speed, clarity and control of the trading platform
- Number of trading instruments available
- Spread or payout ratio
- Quality of Costumer and Language Support
- Payment options for deposit and withdrawal
- Offer of educational materials
- Processing and speed of the Website
- Size of the company or number of branches
- Welcome bonuses and no deposit bonuses
- Discussions about brokers elsewhere on the Internet
- A number of other smaller details that shape the overall impression
Important is to open an account with a broker, which meets all the requirements that the trader expects, such as, having all the instruments with which the trader wants to work.
With the selection of a suitable broker one also needs to consider the trading style. For high-frequency trading EUR / USD, it is crucial to choose a broker with spread below 1 pip, while with share trading is equally as important to find a broker with a wide range of stocks and appropriate financial leverage.
4) Trade forex, commodities or stocks?
Everyone is a specialist in something else, and especially beginner traders should try trading with various trade instruments such as forex, commodities, stocks, bonds, emission allowances or virtual currency Bitcoin and find a market or instrument that suits them the most.
Brokers such as ETX Capital, Plus500 or XTrade offer thousands of underlying assets and if a trader wants to find out more about various markets, opening an account with any of these companies will give him this option.
Forex, or trading with foreign currencies, is particularly suitable for a macro economically minded traders and traders who like action. Forex in itself reflects the performance of the entire national economy, trade relations with other countries, the decision of central banks, governments, etc. At the same time foreign currencies offer high volatility as they change frequently throughout the day, so they are suitable for scalping strategies.
Who decides for forex, it is advisable, to consider, whether to trade in the form of binary option or directly on the interbank market with forex brokers.
Binary options offer, with individual trades limited profit potential, which is the case of EUR / USD around 80-92%, in which case the cost of speculation in the form of binary options seems to be relatively high.
Trading on the interbank market, or in the form of CFD, allows the forex market to achieve much higher profits and is more advantageous. With spread 1 pip on EUR / USD it comes about 3x more advantageous, than the form of binary options trading (assuming short-term speculation with a target profit / loss of 20 pips, with higher desired gains binary options are even more expensive).
Commodity trading has its own specifics – seasonality is manifested, price is highly sensitive to world conflicts or demand from major economies, and weather also plays its role in the creation of the prices, mainly affecting the prices of agricultural commodities. Whoever enjoys watching global developments and reading in between the lines might find trading commodities the right choice.
Good CFD brokers offer among their commodities, other than the classic crude oil and precious metals, also wheat, coffee, pork halves, orange juice, cotton etc. At brokers with binary options commodities are not that broadly represented and usually offer only gold and crude oil.
Trading stocks is what usually comes to mind when one thinks of terms such as „speculation on financial markets”, “investing”, “online trading”, “markets”, “trader” etc. Even public that is not interested in trading and investing knows that on the markets stocks are traded .
Today, there are basically two ways to trade stocks. Either to physically buy them with classic equity brokers, which is associated with high fees for exchanges, depositories and brokers (1-5% of the shares) or you can use a modern form speculation with shares in the form of CFD (Contract for Difference), where fees are often based on hundredths or tenths of one percent of the share price.
Trading stocks in the form of CFD is offered today by many big brokers, including most of the brokers evaluated at Trade-Test.com. CFD are financial derivate representing modern and effective way of trading the underlying assets , so not only with stocks. The principle of CFD trading is a contract between the client and the broker, under which both parties equalize the difference in price of the underlying asset when opening and closing the deal.
In practice, this means that the client trades CFD on selected shares at the same price, which is at the moment on the relevant stock exchange. Profit and loss corresponds to the development on the stock market, so there is virtually no difference whether a trader is trading with shares directly or through a CFD. The main difference is that most CFD brokers do not charge a direct fee for CFD trading and only profit from the spread, i.e. the difference between buying and selling price of shares. Equity CFD also pay dividends, resp. dividend compensation of the same amount how much the dividend was for the respective share.
The main difference between classic share and CFD on the share remains that with CFD there is no voting right and also that for that CFD warrants the broker with which the clients trade. With this is tied the obligation of the brokers to have the proper licences and to provide guarantees in the form of mandatory deposit insurance of their clients up to 20 000 EUR or £ 50 000, according to the country where the broker is based.
5) Importance of Licences
While selecting a suitable broker it is important to also think about a possibility of an unforeseen event , and the broker, which was considered top of the line is now in major trouble. The past has proven that even the biggest companies can go bankrupt and it is therefore necessary to keep this risk in mind.
Main option for how to lower the possible consequences stemming from the downfall of a broker to almost none is to deal only with licensed brokers .
Most brokers today obtain their licence from Cyprus‘ CySEC, this is a transferable license within the European Union and its holder is also the participant in the fund to compensate investors , where the clients have theirs deposits insured 100% up to 20 000 EUR (500 000 Kč).
Tighter regulation and higher deposit insurance offers a license from the British Office Financial Conduct Authority (FCA). Broker with the licence from FCA is based (or has a separate sister company) in Great Britain. Fund to compensate investors in FCA, which each broker licensed by the FCA is a member of, guarantees clients of a given broker, that in the event of bankruptcy their deposits will be returned 100% up to 50 000 pounds (approx. 1.7 M Kč).
In terms of deposit insurance and the eventual settlement of disputes is advantageous to trade with a broker licensed by the FCA, but it is still better to trade with a broker licensed by CySEC, than with a broker without a license or with a license from dubious (usually offshore ) state. It cannot be said that a broker without a license or with a license from an offshore state is bad or a scam, but, at least it means that in a case of a problem it will be difficult for a client to find someone to turn to and he would most likely lose his money.
In our reviews of brokers we put great importance on the quality of regulation and so even the highest placed brokers, such as ETX Capital have quality licence from FCA and guarantee insurance of deposits up to £ 50 000.
6) Be aware of scams
Internet in 2016 is literally riddled with various scams that lure on fairy tale wealth in the world of forex, CFD and binary options.
With forex / CFD brokers the scammers most often use the miracles promising trading automats , most often the so called Expert Advisor (EA), which are computer algorithms written for most common trading platform in the world – Meta Trader. Profitable EA do exist, but are not usually free to sell, or cost a tremendous amount of money. All websites where someone talks about how they have made a lot of money using a certain EA, taking pictures with their cars and checks, are always a scam.
Even more scams lurk on the traders on the Internet by trading binary options. The actual financial derivative of binary options certainly has its advantages, particularly the ease of use, but it is also the reason why binary options are so popular in the hands of fraudsters.
Binary options scam
Most scams on binary options in 2016 have the same form - professionally prepared video about someone who has profited using the "special software" that predicts which way the markets will move. Everything that the naive client must do is to download or buy the software and open an account with a broker, by which the scammer get his commission.
The software either trades by itself for the client or it sends „tips “that the client follows. The fact that program outputs are worthless , is perhaps not even necessary to mention. The user of such software loses his money because for each trade he pays the binary options broker a commission hidden in the lower payout ratio.
Dangerous business strategy martingale
Scammers sometimes set off to hunt for novices armed with a variety of trading strategies that are "guaranteed to work." One representative for all is probably the most widespread martingale strategy.
Martingale was initially a casino strategy "how to beat roulette", but today it finds its application wherever somebody promises unrealistic results. In martingale approach the idea is that a certain amount is invested in the beginning and if the investment is unsuccessful, a new trade is established with double the initial investment. If this is unsuccessful again, a new trade with double the previous amount is set up and this is continued until the investment is profitable.
The problem is that although there is a relatively low probability to get, for example, 7 losses in a row (the chance is 1 in 128, i.e. less than 1%), the statistics are relentless and even this event occurs and the investor must then invest 128 times the original amount , i.e. $ 1,280 if you started with 10 dollars. Sooner or later a series that is too long that the investor no longer has the money for another round will come and will end with a fatal loss of the entire account.
7) The importance of education
The world of online trading is not just about being able to make the right choices and have good judgment, but also about constant education. To be successful on the markets means to keep up with the newest approaches to trading and also watching the world around you.
Trade-Test.com always preferred brokers that made an effort to educate their clients. For a broker profitable trader is the most profitable. Today, fortunately, most brokers offer decent education for their clients, at least through various e-books, educational articles and videos and the better ones even organise webinars, and from time to time live seminars where they meet with clients face to face.
A good education is a fundamental pillar for achieving success, but equally important is to have courage. Some traders get to the stage where they feel they still do not know everything, constantly studying, trading to the maximum on the demo account and they never get to the actual trading.
Demo trading is great for understanding the principals of how markets work, to get familiar with the trading platform, back test and try new strategies. But the results achieved on the demo account will most likely not be similar to the real results the trader would achieve with real money because one important factor is missing and that is the psychological factor of the trader.
During live trading emotions do manifest such as fear and greed and if the trader is not sufficiently prepared for them he will start to commit a number of costly mistakes. The only effective wat to protect oneself against the effects of your own emotions is to start trading with real money.
The first deposit of novice traders should be low, but sufficiently large so that the basic money management of the 2% could be applied. Any possible loss is good to take as some sort of tuition and know, that it is better to take the first losses on a small account and then start to earn with a larger account than to start with a big account and lose the whole thing soon after because of the lack of experiences.
Go for it
It is good to take trading with humour and also to think about the fact that the one who does not try, gains nothing. Our site is here for all who love online trading and want to choose a quality broker based on reviews, experiences and opinions of other traders.
Whoever is looking for the best broker, with whom they want to start their trading career or are coming from another broker, list of best brokers neatly lists tested brokers and makes the choice of the right broker easy.
We wish you many successes.