Similar to stock trading, you need a broker account to be able to trade particular securities. For example, you need a stock trading account to trade stock. You need a Forex Trading account to trade Forex.
There are many Forex brokers available in the market. Some could be very famous and for some, others might not have heard of it at all. All Forex brokers will have broker’s risk even the most reputable one. No matter how famous the brokers are, there is always a chance of winding down for various reasons. For example, Lehman Brothers, the fourth-largest investment bank in the United States (behind Goldman Sachs, Morgan Stanley, and Merrill Lynch), with about 25,000 employees worldwide, was founded in 1850 and filed for bankruptcy in 2008. You must believe that anything is possible in this world.
However, if you want to perform trading, this is the risk you have to take, you just need to ensure you have a good approach to handle and mitigate the risk. You won’t stop driving because you worry about accidents. You should also not stop trading because you worry about your broker’s winding down.
To manage the broker’s risk, our approach is to have strict selection criteria to select our broker and also diversification.
The following are the strict selection criteria that we used to assess our broker.
- The broker must have a long enough history, at least 10 years and above.
- We tested ourselves to ensure no issues on deposit and withdrawal.
- We assess the trading condition of the broker to ensure they are competitive compared with other broker’s offers.
- We will only recommend the broker that we are using ourselves.
- We recommend brokers that can work well with our Expert Advisor.
- We look for brokers that provide a unique competitive advantage.
As of now, we have 5 recommended Forex Brokers, with each having its unique competitive advantage.
- FBS – our most recommended broker. It provides a swap-free account for Malaysian and it provides accounts with leverage up to 1:2000. Very fast withdrawal. We normally receive the funds in the bank within hours after we send in a withdrawal request. They also work closely with us to provide extra benefits to our clients. We have just organized a 2023 Year End Lucky Draw with them.
- FPMarkets – Reputable Forex Brokers from Australia. It can provide leverage of 1:500 for accounts with large capital.
- IC Markets – Reputable Brokers that are famous for their best trading conditions. Their spread is very low and can support up to 1:1000 leverage. They provide a long list of deposit options including PayPal and Crypto.
- XM – XM provides leverage up to 1:500 for Crypto Trading, which is very rare in the market. They also provide 1:500 leverage for Stock Indices CFD, which is higher than other brokers. We are working on a new project to enable Crypto trading on XM. In addition to that, they also offer a Swap-free account for Malaysians and free VPS if you trade more than 3 lots per month.
- Ox Securities – Mainly for US/Canada clients who are looking for Brokers with 1:500 leverage. We are currently testing to deposit and withdraw through Wise and will update our clients once it is successful.
Detailed Comparison for Brokers
| Brokers | FBS | FPMarkets | IC Markets | XM | Ox Securities |
| Spread | EURUSD 10-13 pts AUDCAD 28-30pts | EURUSD 10-13 pts AUDCAD 8-12 pts | EURUSD 8pts AUDCAD 10-11pts | EURUSD 19-20pts AUDCAD 35-38pts | EURUSD 10-13pts AUDCAD 21-23pts |
| Leverage | Support up to 1:2000 for balance less than USD2000 | Support up to 1:500 | Support Up to 1:1000 | Support up to 1:500 for Crypto and Indices CFD | Support up to 1:500 |
| Free VPS | Deposit $450+ Monthly trading 3 lots | Deposit $1000 Monthly Trading 10 lots | Monthly Trading 15 lots | Monthly Trading 3 lots | No Free VPS |
| Deposit Options | Support local bank such as Maybank, Public bank, RHB, FPX, TNG, and Crypto such as USDT | Support Bitcoin, Interac, SaferPay, PayTrust | Support Major Deposits such as FPX, Google Pay, and Crypto. Also support Paypal. | Support local banks such as Maybank, Public banks, RHB, FPX, TNG, and Crypto such as USDT | Support WorldPay, Finmo, Fasapay, DragonPay. |
| Swap Free | Swap free for Malaysian and other Islamic countries | No | No | Swap free for Malaysian and other Islamic countries | No |
| The reason we pick them | High leverage of 1:2000, Free VPS, Very Fast Withdrawal (less than 2 hours to receive funds in the Bank). Swap free account, and Cents Account , which allow customers to start with a smaller amount. | Reputable and it is an Australian Firm | Best Trading condition with a very low spread on EURUSD and AUDCAD. We also like it can be deposited using Paypal. | Crypto and Indices CFD provides leverage of up to 1:500 and its copy trading platform. We currently have a project to implement Crypto trading there and are working on moving Indices Master to trade there. | Mainly for US/Canada customers but we currently have a project to test deposit and withdrawal through Wise. In this case, we can keep the USD after withdrawal. |
Spread Comparison for Brokers
The following are the spread screenshots that we took at almost the same time for you to compare their spread and how it looks like. Of course, spread changes from time to time.
FBS
FPMarkets
IC Markets
XM
Ox Securities
Lastly, some tips to reduce your broker risk.
- Diversify – Once you are comfortable with one broker, start to assess another broker and open a secondary broker account or even a third one if you don’t mind.
- Control your capital in one broker – On and off withdraw your profit to your bank. Don’t put all your eggs in one broker.
Other than broker risk, you should also always consider the trading condition and what the broker offers. Some brokers offer better trading conditions for certain instruments. For example, IC Markets offer a better spread for AUDCAD, and XM offers higher leverage for Crypto. In short, you should consider all factors that could maximize your profit in trading.
Hope this helps all of you to manage your broker’s risk and pick a broker that best suits to your needs. Happy Trading!