How to choose a forex broker.

Two brokers can show you the same EUR/USD chart and still leave you with different results. One may charge more for the same trade. Another may hold on to your money when you ask for it back.

Before you deposit, run four checks in this order: the licence, the cost of a trade, the quality of order execution and the way withdrawals work. If a broker fails the licence check, you can skip the other three.

Does the broker hold a licence you can verify?

Start on the broker's legal page or website footer. It should name the company, the regulator and a licence or registration number. If any of these is missing, stop there.

A regulator is the government body that authorises financial firms in a country and can fine or shut them down. A licensed broker has to follow its rules on client money, advertising and complaints.

Next, open the regulator's website by typing its address yourself, and search its public register for that number. Scam sites sometimes copy a real firm's name and number, which some regulators call a clone firm.

The register entry should match what the broker shows you on the company name, the licence number and the website address.

One brand often runs several companies, each licensed in a different country. Your client agreement names the company that holds your account, and that company's licence sets your protections, so read it before you sign.

Those protections differ from one regulator to another. Some require client money to sit in separate bank accounts, run compensation schemes or limit retail leverage, and others ask for much less.

The licence check lesson walks through a register search step by step, and the red flags lesson lists the warning signs of an unsafe firm.

What does one trade really cost?

Your cost per trade has up to three parts. The spread is the gap between the buy and sell price, and commission is a fee per lot on some accounts.

Swap is interest charged or paid when you hold a position past the daily rollover. It only matters if you keep trades open overnight.

A low spread can come with a commission, so add them together. Here are two illustrative accounts, not any real broker, trading EUR/USD in a US dollar account, where one pip on one standard lot is worth $10.

1. Account A has a 1.2 pip spread and no commission. One round trip on 1 lot costs 1.2 × $10 = $12.00.
2. Account B has a 0.2 pip spread, which costs 0.2 × $10 = $2.00 per lot.
3. Account B also charges $7.00 commission per lot for the round trip, so its total is $2.00 + $7.00 = $9.00.
4. At 0.10 lot both costs shrink tenfold: $1.20 on A and $0.90 on B.
5. Over 40 round trips of 0.10 lot in a month, A costs 40 × $1.20 = $48.00 and B costs 40 × $0.90 = $36.00.

If you open an account through an introducing broker, a rebate paid by the broker can return part of this cost per lot, as the Exness broker page explains.

Compare spreads at the hours you actually trade. They often widen around major news and in quiet hours, so the advertised minimum can be far from what you pay.

The spread comparison shows measured figures, and the cost of one trade lesson adds swap to the sum.

How well does the broker fill your orders?

Say you click buy on 1 lot of EUR/USD at an ask of 1.10000 and the fill comes back at 1.10003. Execution is about how close the price you get is to the price you clicked.

That gap is 0.00003, or 0.3 pip, and on 1 lot it costs 0.3 × $10 = $3.00. The difference is called slippage, and it can also go in your favour.

When the market moves during your order, a fair process passes on better prices as well as worse ones. The broker's order execution policy should describe how fills are handled.

Check the contract specification too. It usually lists the execution type, the minimum distance for stop and limit orders and the trading hours for each instrument.

A demo account is a useful first look, although demo fills can be smoother than live ones. A few small live trades, logged with the price you clicked and the price you got, tell you more.

The execution quality lesson shows what to record and how to read the results.

Can you get your money out when you want it?

Read the payments page before you deposit. It should list the withdrawal methods, any fees and how long a request usually takes.

Regulated brokers verify your identity and address, often before you can trade or withdraw. Send those documents when you open the account, so a later payout is not held up by paperwork.

Brokers often return money to the card or account you deposited from, up to the amount you paid in. If you plan to withdraw to a different method, ask how that works first.

Then test the process with a small amount. For example, deposit $200, request a $50 withdrawal, and note how many days it takes and how much arrives after fees.

Read any bonus terms as well, because some bonuses add conditions before you can withdraw. Being asked for an extra payment or a tax to release your own money is a common sign of a scam.

Do the account rules fit how you trade?

A broker can pass every check above and still suit you badly. Look at the account type you would actually open.

• The margin call and stop out levels, which differ between brokers and decide when your trades are closed for you.
• The smallest trade size, often 0.01 lot, which matters on a small account.
• The account currency. Depositing euros into a US dollar account means a conversion on the way in and on the way out.
• The platform, the instruments listed and the hours support is available.

Higher leverage on offer does not make trades cheaper. It lets you open larger positions on the same deposit, which makes losses larger too.

A checklist to fill in for each broker

Each check has a document or page where the answer sits.

Fill in one row for each broker you consider, so you compare the same items side by side.