Compare the Best Online Brokers in 2021
WeCompareOnlineBrokers.com is designed & committed to helping everyday traders (you!) find the best possible online broker for your trading needs.
This is no easy task – we all have different requirements, preferences, and thoughts on what makes a great broker. We have simply tried to narrow down your search efforts by providing you with an array of broker reviews, broker comparison tables and general information so that you can make the final decision.
Finally, it is important to note that all brokers listed on this website are fully regulated.
Best Online Brokers Comparison – Top 5:
|Broker||Official Site||Max. Leverage||Regulations||No of Cryptos||Bitcoin Spread||Review|
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Risk Warning: CFD and FX trading is not suitable for all investors. CFDs/ FX are leveraged trading products and carry a high level of risk. You do not own or have rights in the underlying assets. Please note, the information on this website is for general informational purposes and does not consider your personal objectives, financial situation or needs. We encourage you to seek independent advice.
How Do You Sort the Good Online Brokers from the Bad?
The list of online brokers that you could open an account with is endless and would takes days to get through. So how do you find a good online broker and what are the key ingredients so you can differentiate the good brokers from the bad?
Please use the below checklist to help you narrow your search for a suitable online broker.
An honest and reputable broker will always be regulated by at least one top-tier authority around the world.
Look for brokers that are regulated by the ASIC in Australia, the FCA in the UK, MAS in Singapore, CySec in Cyprus, the FMA in NZ, plus a few others. These licences are not cheap or easy to obtain and show that the broker has a proven track record with the regulator. Never trade with an unregulated broker, otherwise your money is at serious risk.
Look for a broker that is upfront and honest about their trading costs. Trading costs should be listed on their website but feel free to contact their support team and ask for examples. If they cannot give you a straightforward answer or apply unexpected charges, they might not be the best broker for you.
Trading costs usually take the form in commission, spreads, and overnight financing/ swap charges. The lower these costs, the lower your overall trading costs will be and the greater potential there is to turn a profit.
Always ensure that your broker of choice offers the trading instruments that you wish to trade. For instance, if you want to trade cryptocurrency, make sure that your broker offers crypto before opening an account.
The customer support team provided by the broker is essentially the ‘face of the company’ and will be a good indicator of how the company conducts its business.
If the support team are rude or obnoxious in their approach, or provide incorrect answers, then that is obviously a very bad sign of things to come. Look for a support team that answers your queries in a polite, friendly, knowledgeable, and timely manner. Make sure that they also offer 24/5 support as you will be surprised when you will need them.
Go with an online broker that offers a platform that you are already familiar with, or if you are a newbie, find a platform that you find aesthetically pleasing and that has low trading costs. Most traders will be familiar with platforms like MT4 or cTrader but remember that many brokers offer a proprietary platform and some of them are very good.
What is an Online Broker?
An online broker provides a trader with a trading account, payment gateway and a trading platform so that traders can speculate on the price movement of the world’s financial markets.
In years gone by, this was not possible as investing in global markets was typically reserved for banks, large financial institutions, and high net worth investors. They would have called their broker via phone to place trades and to manage their trades for them. The internet changed all of this and today anyone over the age of 18, that has access to the internet can apply for online trading account.
It is crucial to point out that, whilst the global financial markets are easily accessible these days, they should not be taken for granted and can be extremely risky. Please only ever trade with money you can afford to lose. Please be careful!
What is Online Trading?
Online trading is the act of buying and selling an asset like gold or a stock for instance, using an online broker’s trading platform.
An online trading platform functions as your own personal broker, executing your trades as per your instructions. As the online trading portal is acting as your broker, you will be charged brokerage fees such as the spread, commission, and overnight financing.
To start online trading, you would need to open a trading account with an online broker. Some recommended online brokers are listed on this page and all are regulated by Tier-one Government bodies.
Which Markets Can I Trade Using an Online Broker?
Most brokers will offer a vast array of global financial markets to trade, and it is unlikely you will ever be short of products to trade (some brokers offer over 30,000!)
Look for a well-rounded broker that offers most of the following assets:
- Indices or an Index: these measure a stock market or subset of a stock exchange. Some of the most popular indices are the Wall St 30, US500, German 30, UK100 and Japan 225.
- Commodities: like gold, oil, silver, wheat, Nickel, and coffee, to name a few.
- Forex: minor and major currency pairs like EUR/USD, USD/JPY, AUD/US, plus more.
- Equities: some brokers will offer thousands of global stocks on their trading platform – stocks from Europe, America, Australia, and plenty more.
- Cryptocurrency: trade Bitcoin, Ripple, Dash, Ethereum and more with your online broker.
- Bonds: some online brokers will list a few bonds for you to trade, like the BOBL or BUND.
- ETFs: a handful of online brokers will offer ETFs like the Vanguard FTSE 100 UCTIS ETF, the iShares Core S&P 500 ETF, as well as others.
Is My Online Broker Safe?
Before you open an online trading account, you need to make sure that the online broker you are going to be trading with is legitimate, safe, and reputable.
You have probably heard some horror stories online or on TV, about a broker ripping off its clients. It is true – it can and does happen – but by taking a few simple steps, you can separate the good from the bad, and trade with a broker that does not steal your money.
Please note, there are plenty of great brokers out there; here is how you find one:
- Reviews. Take the time to conduct some research and read a bunch of online reviews. Do not always believe what you read but look for an overall rating. If a broker has a long list of negative reviews over a decent period, it is probably best to avoid them. Use your common sense.
- Regulation. Always ensure that your online broker is fully regulated with at least one Tier-1 regulator like ASIC, FCA, MAS etc. If a broker is not regulated at all, please avoid them at all costs. If they are regulated but only hold one licence in say, Vanuatu or the British Virgin Islands for instance, we would urge you to avoid them too, no matter what they offer. Look for brokers that hold a licence in the UK, Australia, Singapore, Japan, South Africa etc.
- Years of operating. Try and find out how long a broker has been in operation for as that also tells a story. Not to say that every new broker is going to rip you off but trading with a broker who has been in business for at least 2-3 years is probably wise.
- Ownership. Who owns the online broker you are going to start trading with? Is there a company behind them, are they listed on a stock exchange? Do some research to find out who they are and what their plans are.
- Customer Support. Always call and speak with a broker’s support team before opening an account as this tells a very deep story about who they are and how they treat clients. Look for a broker that offers 24/5 support across email, phone, and live chat as a bare minimum.
- Encryption. Safe and honest online brokers typically rely on encryption technology to protect sensitive information, like your personal details. This means that when you login to your trading account, no one else will be able to see any of the information.
Some Benefits of Online Trading:
- Leverage/ Margin. Trading using leverage (or margin) is one of the major benefits of online trading. Utilising leverage means you only need to deposit a small amount of cash to gain access to larger trade amounts as you are’ borrowing’ the rest from the online broker.
- Profit. You can make money from online trading, but most people do not. You will need to remain very focused, be disciplined and fortunate to turn a profit, but it is possible.
- Trade Global Markets. Access and trade markets from all over the world – all you need is a decent internet connection and to be over the age of 18! Years ago, this was not possible as trading global markets was reserved for large financial institutions and rich individuals.
- Buy and Sell. With online trading (using CFDs), you can buy a market as well as sell it. Traditional investing only allowed you to buy a product – online trading allows you to sell an asset if you think its value is going to decline.
Some Risks of Online Trading
- Losses. The biggest and most obvious risk with online trading is that you may lose some or all your money. You need to be certain that online trading is for you and that you can afford to lose the money you deposit on your account.
- Complexity. Online trading is a complex trading vehicle and should not be taken lightly. Do plenty of research and spend hours on a test demo account before proceeding to a live account.
- Emotional. Online trading can be extremely stressful, make no joke about it. It can affect your mental state and may lead you to make silly decisions in the heat of the moment.
- Lack of Experience. The simple fact is most people do not know what they are doing when trading and that leads to losses. Take your time and invest hours trading on a demo account so you are confident you know what you are doing.