What makes a Forex broker safe is to be regulated; however, it’s not enough for being among the safest Forex brokers. The safest forex brokers are the ones under the watch of the most reputable top-tier regulatory bodies.

The Safest Forex Brokers

I searched hundreds of forex brokers to find not only the safest brokers but also the ones that have the best trading conditions. Here’s a list of the safest Forex brokers in the industry:

• HYCM
• IC Markets
• FP Markets
• FX Open
• FXCM
• IG
• AxiTrader
• Admiral Markets
• HotForex

Those brokers are not only the safest ones but they’re also the best ones in other aspects such as low spread, commission, and favorable swap rates.

Before we talk about those fees, let’s see the difference between regulations and why some regulatory bodies are more reliable than others.

See Comparison Table

How to Find a Reliable and Safe Forex Broker?

For finding a reliable safe forex broker the first thing you should notice is to see if the broker is regulated and if so, which regulatory body has regulated it.

There are some differences between regulators. Some of them have looser criteria and as a result, a forex broker can be regulated very easily. Most of these types of regulatory bodies are located in unknown or lesser-known islands known as tax havens.

Almost any forex broker can register in those jurisdictions with the fewest requirements possible.

The most popular islands that forex brokers open their brokerage firms there are British Virgin Islands (regulation: BVI), Cayman Islands (CIMA), and Seychelles (FSA).

 With that said, being regulated by them doesn’t necessarily make a forex broker unreliable, you should look into the broker meticulously though and consider other factors such as the age of the broker. We’ll talk about that later in this article but now let’s see which regulatory bodies are the most reliable ones.

As a rule of thumb, regulators from developed countries have more strict requirements and forex brokers must go through a tough process and provide strong financial competence to be eligible for such regulations.

Some of the most popular regulators in this category include:

• United Kingdom – Financial Conduct Authority (FCA)
• United States- National Futures Association (NFA)
• Australia – Australian Securities and Investments Commission (ASIC)
• Canada- The Investment Industry Regulatory Organization of Canada (IIROC)

For a more complete version, check out this post.

All in all, check to see if the broker you want to pick has a license in your country. The best options for you are the forex brokers that have a license from the authority in your own country.

Why Regulations Make Forex Brokers Safe?

When forex brokers apply for a license, regulatory bodies ask them to provide some financial necessities such as holding an amount in operating capital or opening a segregated account to keep their clients’ money in. The regulatory bodies allocate an amount as compensation in case a broker becomes insolvent.

Let’s take a closer look at each of those requirements and see how they can protect traders against brokers.

Minimum Capital Requirements

One of the financial requirements that forex brokers need to meet is to pay up an amount as minimum capital. This amount varies between different regulators. In more reliable regulatory bodies brokers must have much more as their initial capital while this amount is lower in tier 2 or 3 regulators.

For example, if you apply for the BVI regulation from British Virgin Islands, the amount you need as minimum capital is between $100000 and $250000 depending on what BVI authorities decide. On the other hand, if you decide to apply for an FCA license, you need to deposit €730,000 and the minimum capital for ASIC is $1000000.

As you can see, more reputable regulators have stricter conditions for the minimum capital and ask forex brokers to show a more robust financial situation in the first place.

Segregation of Client Fund

When brokers apply for a license from a regulatory body such as FCA, ASIC, NFA, or any reputable regulator, they’re required to open a bank account and keep their clients’ funds in it. This account is separated from the brokers’ own account and must be registered with the regulators so they can’t use it for their operational expenses.

By doing that, the money of brokers’ clients is safe if there’s a problem in brokers’ financial situations such as insolvency. In other words, if a regulated forex broker goes bankrupt; its clients’ funds remain intact.

Negative Balance Protection

Top-tier regulators require Forex brokers to prove negative balance protection to their clients. “Ok, what does it mean? “, you may ask.

According to FCA, negative balance protection is a “protection that guarantees a client cannot lose more than the total funds in their trading account.”

Well, since almost all retail traders use leverage, technically you can not only lose your entire money but you can also lose the money you’ve borrowed from your broker (leverage). Regulators ask brokers not to allow the money in clients’ accounts to drop below their own funds. In other words, clients can’t lose more than the amount of money that is in their accounts.

All the forex brokers licensed by tier-1 regulatory bodies must provide negative balance protections to retail traders.

Audit and Report

Another aspect of a strong regulation is that it makes forex brokers provide a healthier financial environment for their clients through regular audit and reports.

Tier-1 regulatory bodies such as FCA ask forex brokers to provide daily reports on their capitals. They also audit the brokers annually as well as quarterly. Plus, forex brokers under their watch must provide monthly financial statements precisely based on accounting principles.

All that guarantees the financial situation of brokers and decreases the risk to a great extent.

Safe Forex Brokers Fees

Although the first thing that we need to check when looking for a safe broker is regulation, we want to have a broker that provides the best conditions in terms of fees such as spreads, commission, and swap rates.

When searching for the safest forex brokers, I came across some brokers that have strong regulations, like the ones on our list, but their fees aren’t favorable, at least in all conditions. For example, there are some brokers that seem to have low fees but the low fees are only for very large accounts such as above one million dollars. Those brokers provide low fees to the clients that either have very large accounts or are in the category of high-frequency traders which means they trade more than 1000 lots per month.

There are some brokers in our list that also have such conditions but their conditions for smaller accounts are good as well.

I eliminated those forex brokers that seem to have low fees but they don’t offer such a thing in reality, and kept the ones that not only have strong licenses but they also have the best and lowest fees in the industry.

You can find a sample of the spread, commission, and swap rates of the forex brokers in our list.

Brokers	long swap	short swap	average swap	spread	commission	spread + commission
IC Markets	-0.57	-0.04	-0.3	0.1	0.7	0.8
HYCM	-0.41	-0.24	-0.32	0.4	0.4	0.8
FP Markets	-0.40	0.04	-0.22	0.24	0.6	0.64
FXOpen	-0.43	0.04	-0.23	0.22	0.6	0.82
FXCM	0.42	-0.89	-0.23	0.5	0.4	0.9
IG	-0.83	0.5	-0.18	0.84	0	0.84
AxiTrader	-0.36	0.09	-0.13	0.12	0.7	0.82
Admiral Markets	-0.68	-0.07	-0.37	0.2	0.6	0.8
HotForex	-0.50	-0.07	-0.28	0.3	0.6	0.9

• You can sort out the brokers based on the factor that is important for you by clicking on its heading.
• The average swap is the combination of both long (buy positions) and short (sell positions) and it’s what you receive on average in general. The closer to 0 the better.
• Spreads and commissions are in pip and are related to the ECN or Raw spread type of accounts of the brokers. You may see different numbers if you open other types of accounts in the brokers.

Forex Brokers Establishment Date

One of the factors that doesn’t necessarily make a broker safe or unsafe but can be taken into account is the foundation date of a broker. Normally, forex brokers that have been around for quite some time have established a reputation in the industry thus they don’t do something to besmirch that picture.

Moreover, it shows that they know the ins and outs of the industry and have been able to run and manage their business for many years so it’s very unlikely that they ruin what they’ve built.

That’s why brokers that have been running for more than 10 years are more reliable than the ones that were founded 2 or 3 years ago.

The Safest Forex Brokers Comparison Table

In the following table, you can see the information that we talked about in the article such as regulation as well as a review of each broker that can help you pick the forex broker suitable for you.