Kar Yong
Since I started trading the foreign exchange (FX) market back in 2012, I‘ve used a good number of brokers and witnessed many what we’ll call “fly by night” brokers where they eventually close down or turn out to be a scam.
In this article, I‘ll be sharing with you some of my experiences with the brokers that I’ve personally used in hope that itll benefit you in understanding how you can choose the right broker that fits you too.
A quick disclaimer, Im not promoting or suggesting you to use any of the brokers mentioned in this article, nor am I requested by these brokers to share my experience. Everything shared here is solely based on my personal experience with these brokers.
The very first broker that I used in 2012 was eToro. Back then, I was using eToro to copy other traders on the platform and actively traded the FX market as well. But Ive stopped using eToro to trade FX since 2014.
Over the years eToro has evolved as a broker and today it‘s more stocks centric compared to being a FX broker, while remaining one of the top platforms for social and copy trading. Today, I’m using eToro mainly as one of my stocks portfolio and also leveraging on their copy trading platform to allow fellow investors to follow my portfolio.
Here are some of the strengths of eToro as a broker –
● The interface is very user friendly, even if youre very new to the financial market.
● The social trading element of eToro is great, where youll be able to connect and interact with fellow traders and investors on the platform.
● It provides various thematic portfolios where you can easily invest.
● eToro provides 0% commission on stocks and they do factor in dividends if youre into dividend investing like me as well.
● eToro does not charge a rollover fee or swap for positions that are non-leveraged.
Here are some reasons why eToro may not be the best broker for you –
● The spreads are significantly higher on eToro as compared to other brokers.
● If youre looking to trade short term or scalp the market, you may find it very difficult to trade on eToro due to the spread.
● eToro charges a $5 fee as well as a currency conversion fee for your withdrawal and there is a minimum $30 withdrawal amount.
In 2015, I came across Tradesto, shared by one of my trading friends back in Singapore. I was trading with Tradesto for about one year and decided to stop using them as my broker in 2016. And just recently in 2020, many of the university undergraduates in Malaysia faced problems withdrawing their funds from Tradesto after getting in without much knowledge of the FX trading and broker industry.
During my one year trading with Tradesto, I realised that there were occasions where the broker manipulated the pricing of the market and failed to execute my orders properly. Luckily, I was still able to withdraw all my funds back in 2016 before the whole saga took place in 2020.
If youre new to the FX market and broker industry, make sure you equip yourself with the right knowledge first, and protect yourself before investing huge amounts of money into the broker and financial market.
The very same year, in 2015, I also came across another broker – Brightwin Securities. This was a broker that was introduced to me by one of my business mentors back in Singapore as well. Till date, this is one of the brokers that Ive been using since then.
The one thing that Im very comfortable and confident with Brightwin is the safety of funds. Throughout my years of trading with them, there is no issue of any funding or withdrawal.
Here are some of the strengths of Brightwin as a broker –
● Proper funding and withdrawal processes.
● The segregated bank for Brightwin is HSBC bank in Hong Kong which one can verify from the withdrawal transaction that the funds does come from Brightwin segregated account at HSBC Hong Kong.
● Competitive spreads for FX, with an average of 0.8 to 1.1 pips for EUR/USD.
● There is no markup in spreads or commissions as Brightwin does not engage in aggressive marketing or IB.
● This provides a very fair trading environment for fellow traders.
Here are some reasons why Brightwin may not be the best broker for you –
● The swap for Brightwin is slightly higher compared to the industry average, so if youre looking for long term positions, it may not be the best broker.
● Brightwin doesn‘t provide leverage more than x100, so if you’re looking to take higher risk trades and utilising most of your margin, it may not be the best broker.
Other than these brokers mentioned above, Im currently also using OctaFX and FXPrimus for my FX trading, Interactive Brokers for my stocks portfolio, and Binance for my crypto portfolio.
Some other brokers that Ive used in the past but no longer use include HotForex and InstaForex.
The broker industry today is very competitive such that many brokers are currently having very similar features. Hence brokers are also using higher leverage and/or deposit bonuses to attract clients. While its nice to have higher leverage with additional credit bonuses in your trading account, you want to prioritise the safety aspect of your funds and what you need for your trading first.
In summary, there is no such thing as the best broker in the market. Always do your own due diligence, and go with a broker that you are comfortable and confident with.
