Forex broker checklist

CySEC-regulated brokers must be ICF members — up to €20,000 per client if the broker defaults. FCA-regulated brokers offer FSCS protection up to £85,000. Confirm the broker states this explicitly and that your account type qualifies.

ESMA rules require EU-regulated brokers to offer negative balance protection to retail clients. Your losses cannot exceed your deposit. Confirm this applies to your specific account type before funding.

ESMA requires brokers to publish the percentage of retail accounts that lose money on CFDs. This must appear near the top of their website and on all marketing. A broker that buries or omits this figure may not be EU-compliant.

MiFID II requires EU brokers to publish quarterly RTS 27 (execution venue quality) and annual RTS 28 (top execution venues) reports. These show whether the broker genuinely seeks best execution. Check for a link on their regulatory/legal pages.

Search the broker's name on the FCA/CySEC warning list and Action Fraud. Also check if they appear on ESMA's or any EU national regulator's warning lists. A recent fine does not automatically disqualify a broker, but undisclosed fines should raise concern.

If you hold positions overnight, swap fees apply. These vary significantly between brokers and can eat into profits on longer-term trades. Check the swap rates for your target pairs in the broker's contract specifications. Use our swap fee comparison.

Read the full fee schedule — not just the homepage summary. Look for: inactivity fees (charged after 30–90 days of no trading), currency conversion fees on deposits/withdrawals, and minimum withdrawal amounts. These can be significant for smaller accounts.

Raw/ECN accounts typically offer tighter spreads with a commission per standard lot. A fair rate is $3–$7 per lot per side. Above $10 per lot usually makes a raw account more expensive than a standard account for most traders.

Slippage is the difference between your requested price and the executed price. Chronic negative slippage (execution always worse than requested) is a red flag for a dealing desk model. Ask the broker for their average slippage data or check community forums.

Some brokers advertise "bonus" funds that require high trading volumes before withdrawal. These can trap capital. If a broker heavily promotes bonuses, verify whether the underlying spread cost is competitive without the bonus factored in.

These are the industry-standard platforms with the widest range of indicators, EAs, and third-party tools. Proprietary platforms are not necessarily worse — but they carry higher dependency on the broker's own technology and cannot be migrated if you switch broker.

Download the mobile app and open a demo account before depositing. Test the order entry, chart functionality, and stop-loss placement. A poor mobile experience will limit your ability to manage open trades away from your desk.

A demo account lets you test execution quality, platform stability, and spread consistency with no real money at risk. Brokers that limit demo accounts to 30 days or reduce demo functionality may be discouraging proper pre-deposit evaluation.

If you use or plan to use automated trading strategies, confirm the broker permits EAs on their live accounts without restriction. Some brokers prohibit scalping, grid, or high-frequency EAs in their terms.

A Straight Through Processing (STP) or Electronic Communications Network (ECN) model means your trades are passed directly to liquidity providers without manual intervention. A dealing desk (market maker) model has an inherent conflict of interest — the broker profits when you lose. Ask directly if unclear. Don't just take a broker's word for it — verify real execution latency yourself with free tools before funding an account.

Start with the minimum if testing a broker for the first time, regardless of what you intend to deposit long-term. Many legitimate brokers offer zero or low minimum deposits. High minimum deposits (€500+) as a first requirement can indicate predatory practices.

Most brokers require funds to be returned to the same source they were deposited from (anti-money laundering rules). Verify this before depositing — e.g. if you deposited via bank transfer, confirm bank transfer withdrawal is available without extra fees.

ESMA-mandated leverage caps for retail clients: 30:1 on major FX pairs · 20:1 on minor FX and gold · 10:1 on commodity CFDs · 5:1 on individual equity CFDs · 2:1 on crypto. If a broker offers higher leverage to EU retail clients without professional reclassification, they may be non-compliant.

ESMA requires brokers to assess whether CFD trading is appropriate for you based on knowledge and experience. You should be asked about your trading background during sign-up. A broker that skips this step and lets you fund immediately may not meet MiFID II requirements.

The broker must have a GDPR-compliant privacy policy that states what data they collect, how long they retain it, and your right to request deletion. Brokers that do not disclose their data controller information (usually required to be a registered EU entity) should be treated with caution.