Broker Selection

BarroMetrics Views: Broker Selection

One of the most important functions we have as traders is finding a broker that we can rely on and feel confident in: that we won’t lose our hard-earned if they close.

For retail traders, there are only two jurisdictions I like: Singapore and Switzerland.

  • Singapore because MAS has a sterling track record. In the collapse of MF Global (2011) and Refco (2005), not a single Singapore client lost money.
  • Switzerland because the Government guarantees deposits up to 100,000.00 CHF. The drawback in Switzerland is the only licensed broker I know of is Dukascopy. I’m told, by my students and friends, that small accounts experience unacceptable slippage on stop orders.

I am not commenting on London’s FCA registrations because I have no experience with them. In the US and Australia, clients of failing brokers have lost some or all of their deposits. It’s true that in these situations, the brokers had failed to place funds in segregated accounts, in breach of regulations (e.g. MF Global), but the net result is the clients lost money.

Here is a link to an excellent article by Forex Peace Army on the subject:

http://www.forexpeacearmy.com/community/threads/how-to-select-a-forex-broker.2333/

Leave a Reply

Your email address will not be published. Required fields are marked *