When it comes to successful trading, choosing the right forex broker is absolutely crucial – in fact, it’s the second most important factor after your trading strategies and execution. Don’t believe us? Just ask Justin Grossbard, CEO at CompareForexBrokers. In this eye-opening interview with TechBullion, he shares his first-hand experience and expert insights on how finding the perfect broker can make all the difference in your trading journey. So if you’re serious about maximizing your profits and minimizing risks, keep reading – we’ve got all the tips you need right here in this exclusive interview with CompareForexBrokers.com.
Please tell us about yourself and your background in the forex trading industry?
I’m a person who, since university, where I studied finance, has always been obsessed with finding value. From finding the cheapest flights and hotels to credit cards, it’s something I spend more time on than most individuals. I was exposed to forex trading in 2011, and it became clear that I couldn’t compare the brokers offering currency trading. This led to me (and my business partner Noam) creating the first Google sheet with every broker, their fees, and eventually the business.
What is CompareForexBrokers and what unique solutions do you provide?
Our website compares the brokers that offer forex trading and/or CFD trading. What makes us different is that we update broker information each month and then have our own exclusive testing to complement this data. So, for example, each month, we compare the average published spreads and commissions from all the major forex brokers and update our site. Then, we test them using Expert Advisors (EAs) to verify if each provider’s published data is accurate (in some cases, it was not!).
We have also tested many other areas, from the broker execution speeds (which impacts slippage), forex VPS performance, account opening ease and how often each broker has zero spreads. We also have some exclusive calculators, including one that allows traders to calculate brokerage on different forex trades.
Could you give us an overview and market size of the global forex trading market and why a comparison platform like CompareForexBrokers is important in this age?
There was $7.5 trillion traded a day on average last year. Over 90% of this is speculators, and while a large proportion remains institutional traders, the retail trader component remains significant. The key is that there is no one best forex broker for all these traders. Different traders are in different locations, limiting the brokers regulated in their region. Then, there are different types of trading, with some brokers more suitable than others. As more types of traders arise (e.g. social trading), a comparison platform becomes more critical.
How does the broker search and broker review work on CompareForexBrokers, how are these measured and what are the benefits for traders?
We have eight criteria by which we measure each broker, from fees and trading platform to customer service. Each criterion has ten elements we measure or test, leading to a report card. Team members open demo and live accounts, which are required for some of these criteria. At the same time, others, such as ‘Trust’, are publicly available, from regulation and market cap to past regulatory breaches.
The key is understanding how these factors impact different types of traders and what factors they find important. For example, a copy trader may discover the most crucial factor to be the trading platform, while an algorithmic trader may find execution speed the most essential.
On forex trading platforms, how do you compare forex trading platforms and which platforms would you recommend as the best trading platforms?
Popularity is one of the most important factors when it comes to trading platforms. Traders generally become sticky to the same software after they become used to it. This is why MT4 remains the most traded despite several platforms having significantly better design, charting and features. If you choose a popular trading platform, it makes it easier to switch forex brokers long-term. It also means the trading community is larger.
From a personal perspective, I like TradingView based on their charting package and the ability to trade directly from them. eToro’s platform remains the best for copy trading, while cTrader is one of the best for algorithmic trading if you know how to code.
Since the COVID pandemic and the following high cost of living, many have resulted in online trading and other digital means of livelihood. Which countries are more open and profitable for a forex trading business?
Regulators have become the biggest barrier to trading forex. Past bad actors in the industry (and traders) have led EU, UK and Australian regulators to force restrictive regulation, which many consider too restrictive. For example, in Australia, ASIC-regulated retail traders leverage from 500:1 to 30:1. Personally, I felt 500:1 to be too high for inexperienced traders, but 30:1 can make it difficult to trade instruments like major currency pairs, which move a fraction of a percent most days.
Are there any technological innovations to lookout for in forex trading?
There are two main elements to answer this question. The first is the trading platform technology, which has really evolved over the past year. AI trading is a big part of it, with machine learning being incorporated by trading platforms to allow smarter algorithmic trading based on news events, trends and other macroeconomic factors. Then there is the brokers’ server technology, which has cut the execution speed of trading. VPS technology has also added an extra layer to get this execution speed down regardless of the trader’s location.
Do you have any advice for Institutions and Individuals who have the funds, but do not have time and knowledge to trade forex, any solution to recommend and how it works?
The best way to start is trading with a demo account. Most brokers offer a demo account for free with no need to make a deposit first. Then, if you choose a broker regulated by a ‘tier 1’ regulator such as ASIC (Australia) or the FCA (UK), there is negative balance protection. This means you can’t lose more than your deposit, so if you only put in $100 of funds, you can’t lose more than that amount. I would advise depositing a small amount initially with this safeguard in place.
What are you currently working on at CompareForexBrokers and what is next on your roadmap?
We are working on more calculators to help traders understand the impact of fees, trading types and trading strategies. We are also working on more videos and educational series as we recognise that many visitors don’t just want a document to read. Finally, we have recently introduced an Australian-made chatbot based on our website knowledgebase to assist in helping traders with questions.
From your wealth of experience, what should traders look for in a brokers and do you have more tips for our readers today?
Start by making sure your broker is regulated. Many have heard of bad broker stories, almost always from unregulated brokers. If their fees or features are too good to be true, they usually are. Next, look at the fees followed by the trading platform, customer service and trading experience, such as speeds.
My biggest tip overall is to trade with virtual funds before real funds. A demo account is a way to test our forex trading, or many prefer prop trading, which is more like a competition. The winners of their qualifying stages get funds provided by the prop firm with profits then split between the two parties. If the trader loses real funds, though, the prop trading firm is the only one that loses money.