THE BIG TRADING COMPARISON
Welcome to Broker-Review.co.uk
We are an independent review and comparison site for online financial trading products. On our pages we cover Forex trading and CFD trading extensively. We explain how these popular trading instruments work, how and where they are traded. In addition, we provide helpful tips and information to help you develop your trading knowledge. We have thoroughly examined and tested all well-known regulated brokers on the market today so you can avoid the scammers in the industry. Through our structured and transparent comparison tables, beginner traders as well as experienced traders can find the right broker for them.
What is Forex trading?
The Forex or foreign exchange market is the most important and largest financial market in the world. The average daily turnover is over 4 trillion US dollars. Forex trading happens between trading participants themselves. The various trading participants carry out exchange transactions covering numerous different international currencies. Because of its relative simplicity and huge market liquidity (which means there’s more opportunity for profit), Forex trading is hugely popular. Traders buy and sell currencies from a particular country against the currencies of another country. All Forex transactions are always in the form of currency pairs. Key currency pairs include the Dollar (USD) against the Euro (EUR), the Dollar against the Japanese Yen (JPY) and the Euro against the British Pound (GBP).
Currency pairs are divided into majors and minors. Among the majors are primarily the above mentioned currency couples, while among the minors you have the more exotic currency pairs. Forex beginners should initially restrict themselves to trading the major pairs because there is more liquidity and the spreads are usually lower making each trade cheaper. The price of a particular currency is always dependent on the supply and demand in the market and is heavily influenced by economic and political news but most importantly by interest rate adjustments of a central bank. At its core, Forex traders have two choices to make. They either go long (buy) or go short (sell). In other words, they bet on whether the price of a currency pair is going up (long) or down (short). Compared to traditional trading instruments, Forex trading can generate returns not only with rising prices but also with falling ones. The trader will make a profit if the price of a currency pair goes over its buying price or goes under its selling price . This is just one of the many advantages of Forex over traditional financial instruments.
With Forex trading, market participants are not bound by any fixed operating hours and can trade almost around the clock (except on Saturdays, Forex trading is possible every day of the week). The Forex market is very liquid because of its size and function so larger price gaps between buy and sell price do not occur as much as they do with more traditional securities. The well-known currency pairs are characterized by a high degree of volatility which then also leads to more major price movements in a shorter period of time. This is why Forex traders are usually able to generate healthy profits or losses in a short period of time due to the continuous availability of buyers and sellers as well as price movements. In general, the potential returns (profits) with Forex trading are much higher than with traditional trades due price fluctuations and available margin. Forex trading is also suitable for investors of all sizes because of the available trading volume. Beginners with low starting capital as well as professional traders with a million-dollar account balances can get their money’s worth.
What is CFD trading?
In addition to binary options and Forex trading, CFD trading is also one of the most popular trading types in the world today. CFDs (Contracts for Difference) are differential transactions and also differ significantly from traditional financial instruments. While traders in the traditional sense acquire real assets and securities (like commodities), CFD traders speculate on the price direction of these different assets without actually owning them. This is also called derivative trading. It saves the traders the cost of having to get a depot to hold the assets that were bought. The most important underlying assets are commodities, equities, indices and currencies. In general, CFDs offer retailer traders a number of advantages compared to traditional trading instruments. The trade itself is relatively simple to execute and is suitable for beginners as well as experienced traders. The traders can go in on increasing prices (long) or on falling prices (short). Since trading does not happen in the official financial stock markets, but directly between a provider (broker) and the trader, it is possible to execute trades at any time. CFD trading is carried out exclusively through a trading platform of a broker. Depending on the broker, the traders can use desktop applications like MT4/MT5, trade directly oin their browser or even trade with their mobile devices (like the MT4 mobile app for Android and iOS).
Financial leverage is one of the most important characteristics of CFD trading that is crucial to understand. By having high leverage available to you (e.g. 400:1), very high profits can be achieved with trading on relatively small bets. This is of course also accompanied by a greater potential risk of losses. The prices on broker platforms for CFDs assets are based 1: 1 on the real rates of their respective economic goods. For example, if the price of Apple stock goes up 1%, then the price of the corresponding CFD share will also rise 1%. The traders purchase the CFDs of stocks, commodities or currencies at the current rate. If the price of the underlying economic good increases and the trader went long, then the trader could sell their CFD contracts for a profit. On the other hand, the traders could also rely on falling prices. If this happens, they also receive a profitable return on their investment. In general, fees and commissions for CFD trades are significantly lower than those of traditional trading. In addition, much higher profits, but also losses, are possible in a short period of time. The minimum starting capital needed to place a CFD trade is much lower (can go as low as $100) which makes trading the financial markets accessible for beginner traders as well.
What are binary options?
Binary options are also referred to as digital options. These financial instruments are traded online and have been quite popular although regulators have started clamping down on them a lot recently, outright banning them in some countries. As the term “binary” indicates, only 2 scenarios can occur when trading options. Either the price at maturity goes over or under the entry price. So when a trader opens a binary option trade, he bets on the price at maturity to be either higher (buy) or lower (sell) than his entry price. Once the trader makes the right decision, he gets an attractive return. The return depends on the broker and is usually between 81 percent and 89 percent. If the trader was wrong, he loses his entire bet. Thanks to loss insurance systems provided by many brokers, a loss can be somewhat mitigated by for example exiting the trade sooner avoiding a complete loss of the investment. Compared to traditional financial instruments, binary options do have a few advantages and are also suitable for beginners although they are very high risk and akin to gambling.
With conventional options, traders receive the assets on the expiry date. In the case of binary options, traders only rely on the price direction of an asset. Binary options are traded on the underlying stocks, commodities, currencies and indices. While classic options are traded directly on the financial markets, binary options are traded OTC (over-the-counter). Only one broker and one trader are involved in the transaction. The trader is given access to a trading platform through a broker where the options can easily be traded. Traders do not need a huge investment to start and they don’t need much time. With just a few clicks, the traders can buy a call or put option instantly. The shortest duration of an option is 1 minute which can be quite a thrill but is also the most volatile.
How to find the right broker?
Forex and CFDs are much more popular than traditional financial instruments. They only have a few basic requirements to get started and are also suitable for beginners. Trading for most retail customers takes place exclusively with a broker who either provide access to the markets through MT4/5 or their own software. Before starting, it’s important to choose the right broker. There are many to choose from and a lot of buzzwords used which is where we come in.
Broker for Binary Options
Due to the great popularity of binary options, there are now numerous brokers. These differ in different points from each other. When looking for a suitable broker, some criteria must be considered. Most beginners find it difficult because of the large selection and they often do not know what to look for. Minimum deposit and minimum trading are definitely among the most important criteria when choosing a broker. With most providers, already 100 euros for a deposit are sufficient. The lowest possible minimum payment is particularly advantageous for beginners and also for traders with lower capital.
The minimum trading volume per trade varies greatly from provider to supplier. Under this amount, the trader can not trade binary options. Depending on the broker, this amount is between 10 and 25 euros. As with the minimum payment, the minimum trading volume should be as low as possible. The number of trading types and commodities must also be taken into account when choosing a broker.
The trading platform of the broker plays a particularly important role. This should be clear and easy to use. In addition, the vendor should provide its customers with various trading resources, such as webinars, e-books or instructions. Brokers with fast and responsive customer support are also beneficial. These important tools are particularly beneficial for beginners. Most brokers attract new customers with bonus offers and VIP programs. These two factors are not as important as the other criteria, but they should also be included in the decision-making process.
Without a suitable Forex provider trading on the foreign exchange market is not possible. As Forex trading is also one of the most popular trading types in the world today, new Forex brokers are constantly being added. While experienced traders usually know what to look for when choosing a broker, newcomers usually find the decision much more difficult. No trader should choose directly for the first vendor. First, the most important criteria must be considered. Providers working with the so-called “Market Maker Model” are particularly suitable for Forex beginners. Most traders pay attention to the lowest possible trading costs and these are mainly determined by spreads.
For the most popular pairs of currencies, the minimum spread is between 0.8 and 1. The minimum deposit and the leverage ratio should be taken into account when choosing a broker. Many brokers require only 50 euros as a minimum deposit. The higher the leverage ratio, the less money the traders need to use from their own pocket. With a leverage ratio of 1: 100 a trader with only 100 euro own capital can trade a total of 10,000 euros.
The trading platform of the broker plays an important role in the decision-making process. The trading platform has to be easy to use, clearly arranged and provided with many useful functions. Many brokers offer a demo account to potential customers. This allows a free trade without risk and is therefore particularly interesting for beginners. By the large mass of brokers a strong fight for new customers burned. That’s why traders benefit from bonuses and extras for many brokers. For example, you receive a financial bonus when you make a deposit or receive improved conditions from a high trading volume.
Traders can also choose from a wide range of different providers when trading with the popular CFDs. In the meantime, there are more than 100 CFD brokers. In order to find a suitable and serious broker in this enormous mass, the most important decision-making criteria have to be considered. The impeccable seriousness of the provider is most important. Serious brokers have their seat within the European Union at one of the established financial centers. They are regularly checked by a strict supervisory authority (eg FSA or BaFin) and are permanently regulated by them. Customers do not have to worry about their capital with serious brokers, because this is protected by a deposit guarantee against loss. The level of spreads and commissions and the selection of different underlying assets should be examined next. A large selection of many different underlying assets is advantageous for each trader.
However, the level of spreads should always be within a normal range. Many beginners value a free demo account and the lowest possible minimum payment. Traders can quickly draw conclusions about the outsourcing of a broker. This makes a professional as well as transparent impression. The trading platform of the CFD broker must meet the requirements of the trader and must be clear and easy to use. Traders who like to trade on the go prefer brokers with mobile trading apps.
Individual provider comparison for binary options, forex and CFDs
On our website, traders not only find a lot of helpful information and explanations, but also a broker comparison for binary options, forex and CFDs. We have thoroughly tested all current brokers and examined them with regard to the most important decision-making criteria. Traders can sort our broker comparison according to their own wishes and key decision criteria. Within a very short time each dealer will find a suitable supplier with our current broker comparison.