FX BROKERS
Retail FX World:
Key Attributes of the 2010 Best FX Brokers
Te retail FX industry is reaching puberty and it has brought a few million people to trading Forex over the past 10-12 years. But in the vast geographic and digital expanse where retail FX trading takes place, a key question arises regarding the 100+ brokers that control this marketplace.
What makes an FX broker better than others? Te answer to this question opens the door to a host of opinions. But an informed person looks for coherent, comprehensive answers, not anecdotes and hear-say. Last summer, Forex Datasource announced results of a 2-year study identifying the best brokers in the retail FX arena. To reflect changes since then, the 2010 FX Traders’ Choice Awards will be announced during the second half of July in special partnership with
IBTimes.com, the large global news leader. As a special preview for FX Trader Magazine, this article based on the data used to generate the 2010 awards identifies the key attributes that FX traders look for in brokers.
10 FX TRADER MAGAZINE July - September 2010
Before we get to the findings we should establish just how credible they might be. Properly constructed surveys take snapshots of opinion using random sampling methods. If the sampling is random and controlled, a relatively small number of people can reveal accurately the behavior of a large crowd. For example, In the United States we rely on political polls that reveal the sentiment of 100+ million voters by randomly sampling 1500 people.
For the 2010 FX Traders’ Choice Awards, we obtained more than 1000 valid responses over the May 2009 – May 2010 period. Tese entries came from 111 countries thanks to the wide reach of IBTimes. com. In addition, we set up steps to further limit vote rigging. But when it comes to the following question we asked our respondents, there was no
Execution Platform Spreads Service
Deal Desk Other
Regulation
obvious incentive for voters to want to rig anything: “What is the most important characteristic of a FX Broker?” Te options were: spreads, execution, platform, dealing-desk/no-dealing- desk, regulation, service, or other. What the results of this table reveal is that there are four attributes that are most important for FX traders: trade execution, trading platform, spreads, and customer service. Together they account for 78% of all votes, with an average of close to 20%. Execution refers to whether a trade is executed in a straightforward manner, without requotes or slippage. Te
% Total Most Voted Broker
22% 22% 17% 17% 8% 8% 6%
Interactive Brokers DBFX
Alpari UK FXCM Oanda FXDD
PFG Best Source:
ForexDatasource.com, 2010
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