Forex Broker Comparison

Forex also offers private investors the opportunity to participate in foreign exchange trading. The option to multiply your bet is quite realistic. As an investor, you should also be aware that Forex trading involves a high level of risk and, in extreme cases, a total loss is possible.

An important aspect of Forex trading is the selection of a suitable broker. Many brokers in German-speaking countries have now established themselves. There are many criteria that should be considered. What are the fees and spreads? Which trading platform is offered? The trading platform should be clear and easy to use. Metatraders are available for automated trading (Metatrader 4 and Metatrader 5), with the Metatrader 5 becoming more and more popular. The Metatraders have been around for many years and are more suitable for the advanced Forex trader. What we also attach great importance to is the support of a broker. Ideally, support should be competent and fast, and available around the clock.

On our portal we describe the best-known brokers and compare their services and prices. You also have the opportunity to rate the individual brokers and share your experiences. If you have previous experience with a broker, please leave a review and help other traders who are still looking for a good broker make their choice.

Shares or securities are traded on a regular stock exchange, with private investors usually hoping for rising prices in order to be able to realize profits. On the Forex, on the other hand, you can also benefit from a falling course, the only art is to correctly assess the future course. Trading is not with stocks but with currency pairs and CFDs. For example, you take the euro and the dollar, compare them with each other and then you get a rate of e.g. 1.3920. If the euro or the dollar changes its value, the level of the exchange rate of this currency pair also changes. You can go long (bet on a rising price) or short (bet on a falling price) on any price. Turnover on the Forex is now far higher than on other stock markets. In addition, the Forex is considered a very transparent and fair market

Basically, Forex offers the opportunity to speculate on the exchange rate between two currencies, or commodities, cryptos or indices can be traded. The aim of a trader is to make a profit when the price of a currency pair or CFD moves in the assumed direction. Stock market news or political events can often be used to deduce the direction in which a course can develop. With a turnover volume of over 4 trillion dollars (US dollars), Forex is the world's largest market and thus opens up numerous opportunities to generate lucrative profits.

Not only can you benefit from falling prices on the Forex, it is also possible to open an account with little capital. The required starting capital is less than 100 euros for some brokers. A broker is the link between the investor and the stock exchange. A broker executes the order for the investor and provides the required trading platform with some tools free of charge. There is a difference of a few points (pips) between the purchase price and the selling price, depending on the currency pair 2 or 3 pips. This difference (spread) is, so to speak, the broker's fees or profit. A free demo account is also provided by the brokers. With this account you can practice Forex on real terms and with real rates. Such an account is available for a few weeks, and it is only play money. This is a good way to get a feel for the fast Forex market and gain some initial experience. Before opening a real money account on Forex, it is recommended to familiarize yourself with the demo account on the market.

The basis of the Forex market is that currency pairs can be bought and sold. You can speculate on both rising prices and falling prices. The aim is to make profits by buying and selling correctly. A trade in foreign exchange works in the same way as a trade on other exchanges. If you have already gained experience on other exchanges, switching to Forex is usually not difficult.

Trading example:

A broker sells 2 mini lots (1 mini lot = 10,000) of the EUR/USD currency pair at a rate of 1.65378 (stake: 20,000 euros). 2 months later he closed the position again with a profit of 4308.4 pips, which means a profit of $4308.

Foreign currencies are always quoted in pairs. The price of a currency pair is always formed from two currencies, with EUR/USD being the most well-known pair. In this example, the EURO would be the base currency and the US dollar would be the reference currency. The basis for trades is always the base currency. When buying EUR/USD, the euro is actually being sold and the US dollar is being sold. Now, assuming that the euro appreciates against the dollar, you would buy the EUR/USD currency pair. If the EUR/USD exchange rate were 1.43245, one euro would be worth 1.43245 dollars. In our example, after buying EUR/USD, all you have to do is wait until the euro increases in value against the dollar and then sell your position again at a profit.

The most important quotations at a glance:

• EUR/USD (Euro US-Dollar)
• USD/JPY (US-Dollar Yen)
• GBP/USD (British Pound US-Dollar)

Whether you buy or sell always depends on the development of the price, or whether you assume that a price will rise or fall. If you expect a falling rate, you would sell the respective currency pair. The same applies to a rising price. Then you would buy.

The spread, bid and ask price

Like other foreign exchange markets, Forex has a bid and ask price. The difference between bid and ask is called the spread. Bid and Ask represent the buying price and the selling price. You buy an asset at the ask price and sell an asset at the bid price. The range in between is actually to be seen as the fees for Forex trading. To keep the fees low you should compare different brokers. The spreads can definitely differ. The spread should always be as low as possible. For different instruments, the percentage of the spread is also different. E.g. with cryptocurrencies the spread is higher than with currency pairs.

What is the Margin?

The margin can be seen as a kind of insurance that protects the trader against losses that would exceed his balance. The margin also allows the trader to move significantly more volume than he actually uses. The margin is to be deposited for the period of a trade and is normally 0.5% of the sales volume. Margin can differ a bit depending on the instrument and one should always check this with their broker. For example, margin can hedge trades against excessive falls. A trade is automatically closed before an account can go negative. This is called the so-called margin call.

Trading Volume

The daily trading volume of Forex is well over 3 trillion dollars. This is due to the number of huge trades executed daily. Most sales are made in London. The Forex trading volume is much higher than the turnover made on the stock exchanges of a country. One reason for this high turnover is that many large banks and institutional investors operate on the Forex.

With modern technology and with computers and the Internet, it is relatively easy to make trades at any time and over large distances. The trading platforms (software) used and made available by most brokers are an excellent tool for this.

Opening Hours

You can trade on Forex 24 hours a day. Even on public holidays, trades can easily be made via other countries. The normal stock exchange is bound to the usual trading hours from 8 a.m. to 5 p.m. There is no trading on public holidays and weekends. The companies in a country and the trading instruments that can be used are closely related.

Forex, on the other hand, is not bound by opening hours or country-specific time zones and the products traded there can be converted into cash almost immediately. There is always a Forex exchange open somewhere in the world and there is always a trade going on somewhere.

Analysis and trading signals

One thing that Forex and trading in shares have in common is that a trading platform is usually used for trading and the trades are processed by so-called brokers. In order to make the right decision to buy or sell, it is important to analyze the market carefully. Fundamental analysis and technical analysis are used. You should also read and analyze the news about the markets carefully. In the case of the stock exchange, it can also be helpful to provide detailed information about the respective company, its balance sheet and future prospects. There are service providers who have specialized in analyzing individual companies. The Forex broker is independent of these indicators and can make its own analysis with the help of chart technology and news. This offers the Forex trader a little more freedom without necessarily depending on the opinion or help of a third party.

There is also a program (Metatrader) and a programming language (MQL) for Forex that can trade fully automatically according to the investor's specifications. You can set and configure certain constellations or chart patterns according to which you want to trade. This offers the advantage that a program can, for example, recognize buy signals much faster than evaluating the charts "by hand". An order can then be executed extremely precisely according to mathematical calculations and in a matter of seconds. We would be happy to help you set up an automatic trading program.

Annoyed already with automatic trading systems

Automatic trading programs are now also available to you for trading on the Forex. These buy or sell strictly according to the rules that you have previously set. In this way you can practically rule out human emotions, where wrong decisions are often made, and you protect your deposit balance and, above all, your nerves.

Set your own rules and chart patterns for when the autotrader should buy or sell. This can save you a lot of time on analysis and to a certain extent takes the decision off your hands when it is worth making a trade. You don't necessarily have to develop your trading system yourself. There are numerous providers who offer this service or ready-made autotrader. You can recognize good providers by the fact that their success or the strategy of the autotrader can be proven on the charts of recent years.

The trend strategy

Attempts are made to recognize the current trend in the market. This can also be seen from so-called trend channels, in which direction the market is heading in the medium term or moves in the long term. An evaluation of the charts over a longer period of time is often helpful here in order to be able to determine the current trend.

The trend breaking strategy

It is also about determining the current trend of the market. However, one does not follow the trend of the market, but tries to recognize an imminent change in the trend through various technical indicators. If you suspect an imminent change in the trend or mood, you buy the corresponding stocks in good time. When a change in trend occurs, it is often done by a major, short-term slide in one direction. This relatively large difference in price is tried to be taken in the short term before the market moves further in the expected direction, but with much smaller fluctuations.

Daytrading/Swingtrading

This type of trading is very short term. It focuses on the price movements of a value within one or more days. These short-term market movements often run counter to the long-term trend. The profit of a trade is not particularly high here. By making many small profits/trades and taking the daily price fluctuations with you, you can also achieve considerable profits.