Market maker
The broker quotes its own prices and may take the other side of client trades. Spreads are often fixed, no separate commission. Suitable for some retail traders, but model creates a structural counterparty position.
Forex Brokers · Independent Editorial
How to evaluate a forex broker — without falling for the marketing.
Choosing a forex broker is a regulatory and risk decision before it is a trading decision. This page explains what to actually check — regulation, account types, spreads vs commission, platforms and funding — and gives you a checklist that works for any broker, not just XM.
Regulator-first
No "best broker" hype
Risk explained
Definition
What a forex broker actually does.
A forex broker is a regulated financial firm that gives retail clients access to the currency market through leveraged products. The broker provides quotes, executes orders, holds client funds and reports to a regulator. That last part — regulator-level supervision — is the entire point.
An "unregulated" broker is, in practice, an unaccountable counterparty. It is one of the few decisions in retail trading that is genuinely binary: regulated or stay away.
What the broker provides
- Account onboarding and KYC.
- Trading platform access (often MT4 / MT5).
- Quotes, execution and order routing.
- Leverage up to regulator-defined caps.
- Deposit and withdrawal processing.
- Risk disclosures and statements.
What the broker does not provide
- Personal financial advice.
- Profit guarantees (any "guarantee" is a red flag).
- Substitute for your local regulation or tax rules.
Execution models
Market maker, STP, ECN — what's the practical difference?
The execution model shapes spreads, commissions, slippage profile and potential conflict of interest. None of the three is inherently "better"; they fit different types of trader.
STP (Straight Through Processing)
Orders are routed to liquidity providers without manual intervention. Spreads are typically variable. Common for retail-friendly account types.
ECN (Electronic Communication Network)
Aggregates pricing from multiple banks and institutions. Tightest spreads, with a commission per lot. Suited to active and cost-sensitive traders.
In practice, many brokers blend models across account types. Always read the live account specifications, not the marketing landing page.
Common account types
Micro, Standard and low-spread accounts — practical comparison.
Most international forex brokers structure accounts in roughly the same three tiers. Names differ but the trade-offs are similar.
| Account type | Contract size | Typical pricing | Best suited for |
|---|---|---|---|
| Micro | Smaller (e.g. 1,000 units per lot) | Spread-only, often slightly wider | First live accounts, position sizing practice |
| Standard | Standard (e.g. 100,000 units per lot) | Spread-only, mid-range | Experienced retail, all-purpose trading |
| Low-spread / Zero / ECN | Standard | Tight spread + commission per lot | Active traders, cost-sensitive strategies |
Account specifications and minimum deposits depend on the entity that serves your jurisdiction. Always confirm on the broker's official website.
Pre-deposit checklist
Twelve checks before you fund any forex broker.
If a broker fails on the first three, the rest do not matter. Use this list before you press "deposit" — including with brokers we cover positively elsewhere on this site.
1 · Regulated entity
Which legal entity will hold your funds, and which regulator authorises it? Look up the entity directly on the regulator's public register.
2 · Country acceptance
Confirm the broker accepts clients from your country and that the entity is appropriate for your jurisdiction.
3 · Segregated client funds
Client money should be held separately from broker operating funds. This is standard at regulated brokers — its absence is a red flag.
4 · Negative balance protection
In your jurisdiction, is your maximum loss capped at your deposited capital? In some regions this protection is mandatory; elsewhere it is optional.
5 · Compensation scheme
If applicable in your region, what coverage applies if the broker fails? Confirm the actual scheme and the limits on the regulator's site.
6 · Trading conditions
Live spreads, commission, swap, slippage profile during news. The platform tells you the truth; the marketing page tells you what they want to be true.
7 · Platform & tools
MT4, MT5, web, mobile, copy-trading add-ons. Test the platform on demo before deciding.
8 · Funding methods
Cards, bank transfers, e-wallets, processing times, currency conversion costs. Check whether the same method works for both deposit and withdrawal.
9 · Withdrawal record
Look for repeated, recent, specific complaints about withdrawal delays — not just a single bad review. Regulator complaint records can be more useful than affiliate review sites.
10 · Customer support
Does support respond, in your language, with substantive answers — or with copy-paste? Test before you deposit, not after.
11 · Education quality
Education is a "nice to have", not a substitute for risk management. Be wary of any "academy" promising specific returns.
12 · Tone of marketing
If the marketing emphasises lifestyle, profits and guarantees rather than risk, regulation and conditions, treat that as data — about the broker, not about trading.
Red flags
Patterns that should end the conversation.
These are the signals that should make you stop, regardless of how attractive the bonus or the spread looks.
Stop and walk away if…
- The broker cannot tell you which legal entity will hold your funds.
- The "regulator" they cite does not list them on its public register.
- Marketing claims "no risk", "guaranteed returns", or "guaranteed signals".
- Withdrawals are conditional on an unrealistic trading volume bonus.
- Support refuses to put answers in writing.
- The broker pressures you with a deadline ("today only" deposit bonus).
Reasons to keep evaluating
- Clear, named entity and verified regulator.
- Plain-English risk disclosures that come before the CTA.
- KYC verification required — yes, this is a good sign.
- Consistent answers across support, website and platform.
- A real demo account that mirrors the live conditions.
- An honest comparison page that admits the broker's limits.
FAQ
Common questions about forex brokers
What is a forex broker?
A forex broker is a regulated financial firm that gives retail clients access to currency markets, typically via CFD or spot-style products on platforms like MetaTrader 4 or MetaTrader 5. The broker provides quotes, executes orders, holds client funds and applies leverage according to the rules of its regulator and the country of the client.
How do I choose a regulated forex broker?
Verify which entity will hold your funds, which regulator authorises that entity, what protections exist (segregated funds, compensation schemes, negative balance protection where applicable), what trading conditions are offered, and how transparent the broker is about costs and risk.
What is the difference between an STP, ECN and market-maker broker?
Market makers internalise client trades. STP brokers route orders to liquidity providers without intervention. ECN brokers connect clients to a network of banks and institutions, usually with tighter spreads and a commission per lot.
Are forex brokers safe?
Regulated forex brokers operate under capital, conduct and reporting rules designed to protect retail clients, but no broker eliminates trading risk. Even with a fully regulated broker, leveraged forex and CFD trading can result in significant or total loss of deposited funds.
What is the minimum deposit at most forex brokers?
Minimum deposits vary widely. Many international brokers offer Micro-style accounts with low entry deposits; ECN-style accounts often require larger minimums. Always confirm the latest minimum on the broker's official site for your jurisdiction.
Does Forex Trading Point cover multiple brokers?
This site focuses editorially on XM. The frameworks on this page are general and apply to any broker, but our deep-dive content is the XM review and the XM account opening guide.
Apply the checklist
If a broker passes the checklist, the next step is the account guide.
Once you have decided that a regulated broker fits your jurisdiction and goals, the practical step is the account opening process. Our XM account guide is one example of how that process should look — clear, document-driven and risk-first.
Independent editorial
Risk shown first
No income claims
Open the XM account guide
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