Best broker: our comparison of the best tools to invest online

Online trading is an activity that brings together an ever-growing community for a variety of reasons, even if they all revolve around a common idea: the dream of large financial profits obtained quickly and easily. A broker trading is the material opportunity that creates a bridge between the reality of many traders – a fantasized ignorance of stock market investments – and the financial markets with their plethora of financial instruments. But is one broker trading as good as another? Do they all offer the same services and investment guarantees? Are certain points of vigilance essential to minimise the chances of running into a scam? What makes a broker the best online broker?

In our broker comparison we will try to detail the fundamental points that allow us to identify a broker objectively. We will also give you a few tips to help you choose a trading platform that suits you in terms of your skill level, your assets and your investment strategy.

What is a broker?

Before embarking on a technical explanation, it seems to us quite important to refocus the debate on the main notion of this comparative: what is a broker?

An online broker, or online dealer, is an intermediary that allows investors to buy and sell financial products on various stock exchanges around the world. In return for easy access and a user-friendly interface for placing orders in real time, a broker is remunerated mainly through brokerage fees, mostly in the form of commissions (or spread)

The comparison that we are going to propose to you concerns by default a particular category of broker. Namely the CFD broker. The essence of this intermediary lies in the concept that it operates on the notion of Contract For Difference (or Contract for Difference). In a nutshell, it is a particular type of trading that allows traders to speculate on a variety of assets – stocks, currencies, commodities, etc. – and to trade in a variety of currencies. – in a nutshell, it is a special type of trading that allows traders to speculate on a variety of assets – stocks, currencies, commodities, etc. – simply on upward or downward trends in their stock market prices. A CFD broker does not physically buy the products. It is what is known as a Market Maker. It mirrors the financial markets in real time.

An online broker uses specialised software to offer clients an interface and infrastructure optimised for web trading. MetaTrader – with its various versions: MetaTrader 4, MetaTrader 5, MetaTrader WebTrader and MetaTrader Supreme Edition – is currently the leading provider of online trading interfaces on the market. The software is both flexible and expert thanks to its range of online trading oriented tools: dynamic charts, automatic trading robot, technical analysis, personalised profile for efficient portfolio management.

The frame is now in place. We know what we are looking for. Let’s move on to the next step: the criteria to pay attention to when choosing the best English broker.

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How to select the best broker in UK?

There are a very large number of elements that are important in the choice of a trading broker. We have put together the most exhaustive possible list of components that we believe are relevant and that are favoured by a large majority of traders’ expectations. We will explain point by point why it is necessary to dwell on them before creating a trader account.

A regulated broker

In our opinion, this is the first guarantee to be ensured. Is my broker regulated? If it is, it means that it has received certification from the financial market regulatory authorities. Either by geographical area, as with CySEC, which supervises a large part of the European zone, or by country, as with the Autorité des Marchés Financiers, or AMF, which controls and regulates every broker in UK

Although it is essential that the broker you are trading with is regulated, this does not protect you 100% from possible dishonest traders. For example, a number of experts tend to point the finger at Cyprus-based brokers, therefore regulated by CySEC, because Cypriot laws are more flexible than English rules. If you live in UK and want to cover yourself as much as possible, always favour a English broker who has obtained AMF certification.

A reliable and efficient interface

The investors found on CFD brokers are mostly composed of novice traders eager to make profits. They will therefore naturally move towards a trading platform favouring short-term investment strategies such as scalping. It is therefore mandatory for convincing results to rely on reactive, dynamic and particularly reliable IT tools.

Take a few minutes to find out about the software that manages the trader interface – client area, order placement, charting, advanced analysis, etc. – can be a reasonable approach. At the moment we can list 2 major software packages

  • the MetaTrader suite which is widely represented among CFD brokers
  • ProRealTime, which is making a name for itself in the online stock market offered by commercial banks

If neither of these two infrastructures appear during your search, chances are that your trades are not very secure. Trading platforms home are never the preferred solution. Unless, perhaps, you are the designer and are sure of your coding and predictive algorithm.

The speed of execution of your orders is essential to maximise your chances of winning. Even more about short-term money management. The trading platform must reflect the reality of prices. A parallel check on a stock exchange agency (Reuters for example) is reassuring. It must also react to the quarter turn so that you can place your order at the price you are asking for.

A little extra tip. Any website that wants to be the best forex broker, for example, offers a high-performance mobile application that offers the same capabilities as the browser version. Under Android or iOS, all mobile devices should ideally be concerned.

Trading fees

Being profitable in online trading does not depend solely on the accuracy of one’s stock market investments. Trading costs have an important place in the performance balance sheet of its asset portfolio. There are two types of fees: brokerage fees and management fees.

Brokerage fees include all the charges made by the broker for managing your positions:

  • spreads or commissions which are calculated in pip. They correspond to a percentage of remuneration taken from the difference between the purchase price at the opening of the position and the sale price at its closing. An attractive broker focuses its spreads on forex and short term investments, and does not take anything on long positions
  • costs related to your strategic choices such as overnight or overnight fees when a position remains open from one session to the next

The management fee covers everything else. Everything related to the management of your trader account and your portfolio of financial instruments:

  • any charges for deposits or withdrawals. Favour brokers who pay fees on inbound and outbound transactions
  • currency exchange charges which can sometimes be as high as 3%
  • inactivity charges when a portfolio remains stationary for a certain period of time. Often 90 days with a fixed withdrawal from the remaining capital in the account

Investment strategies supported

We are not all similar investors. Our stress resistance, ambitions, knowledge and financial goals are different. This is why there are almost as many investment strategies as there are traders. Therefore, when looking for the best broker, we must make sure we know what opportunities are available to us.

Some online brokers allow short-term investments such as the scalping (forex broker) or the day trading which concerns traders who consult and manage their portfolios on a daily basis. Others ban these practices to provide an environment where the swing trading is central, i.e. medium to long term positions as with an equity CFD broker.

Security of funds

This is an element that concerns the reliability of a trading platform. In both UK and the UK, the AMF and the FCA require investors’ funds to be guaranteed by an independent bank in order to be certified. This is called fund segregation. In other words, if the broker were to go bankrupt, investors are guaranteed to recover all or part of their capital. This is often a minimum value with a maximum ceiling. This is a guarantee of seriousness that should not be overlooked.

For example, XTB has set up a segregation of funds in partnership with the BNP Paribas bank with a maximum envelope per trader of €22k.

The type of trading account

We do not all have the same level of stock market trading skills. As a result, we do not all have the same needs in terms of analytical tools or access to specific products. A multiple choice of trading account is a point to be taken into account.

The demo account is a positive signal sent by a broker as it allows you to test your trading platform, in real conditions and free of charge. It is an excellent opportunity to confront oneself, especially for beginners, with the reality of the trading markets, the real potential of an investment portfolio and the tools to achieve one’s objectives.

A CFD broker can have different levels of access:

  • starting with analysis and a limited quantity of financial instruments that meet the basic needs of traders with limited skills
  • possibly an intermediary account to extend the catalogue, the possibilities of actions and analyses at the same time
  • a Pro or Premium account with adjusted rates on brokerage and management operations, and other advantages such as a personalised manager

The management tools to be taken into account also concern the leverage effect that can be customised or not and the type of instruments available: currency pairs, equities, commodities, stock market indices, currency crypto, ETFs. The wider the choice, the more you can move towards a precise personalisation of your portfolio; or opt for a particular type of broker oriented forex or crypto currencies for example.

Training and support

We consider that the best broker must provide quality pedagogical and technical follow-up. Ideally, a beginner trader should have at his disposal a set of training materials that will help him to understand the world of finance as applied to the financial markets. We have already mentioned the pivot represented by the demo account. These materials can be based on different formats such as live trading, webinars, tutorials, expert blog articles, general FAQs and stock market news explained. As it progresses, new modules are made available to improve trading performance. Support should be progressive, even when the investor is experienced or even professional.

Customer service also plays an important role, as trades are carried out in financial centres around the world with wide time ranges. Advisors must be expert, attentive and available in several languages. For example, a 24/7 live chat, e-mail and telephone customer service is a good example of this.

Cost-effectiveness and accessibility

The last criterion is slightly more anecdotal. It turns out that many analysts tend to encourage traders to play it safe by protecting their capital by never investing more than 5% of their funds per position. Therefore, get closer to a broker with minimum order thresholds that stick to this limit.

Find out as much as possible about the financial results of the broker you are interested in. We remind you that nearly 70% of portfolios go bankrupt because online trading is a risky financial activity. Favour CFD brokers with minimum returns of 75%. The higher and more realistic this return is, the more interesting profits can be made with an adapted strategy.

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Our broker comparison

After having established this exhaustive list of central criteria to determine the best English broker, here is our list of the 3 most competitive brokers on the market today: eToro, IQ Option, BDSwiss. We are going to present you their main characteristics.

eToro

The main advantages

  • social trading and its copy trading tools: CopyTrader and Copy Portfolio
  • low brokerage fees
  • training course

eToro has often been held up as an example among CFD brokers for years. It is one of the oldest all-public online brokers. It is recognised as being particularly suitable for novice traders due to its progressive training path. eToro is the pioneer and leader in social trading. The broker has developed technological tools in line with FinTech to allow the greatest number of people to benefit from the performance of the Top Popular Investors via CopyTrader, which automatically clones the strategies of selected traders, and Copy Portfolio, which pools the whole with a news feed and a sharing space

The catalogue of financial instruments is rather extensive – forex, crypto currencies, shares and stock indices – with rather limited costs.

IQ Option

The main advantages :

  • the automatic trading robot
  • the quality of customer service
  • minimum deposit at 10€

IQ Option is certainly the most surprising online broker since its launch in 2014. It is one of those financial players that is boosting the sector with constant FinTech innovations aimed at making online trading as easy as possible for all types of traders. Excellent training materials are offered as users’ careers evolve. Customer service support is surely the best at present with technical means that match the ambitions displayed: live chat, telephone platform with impressive performances. Trading fees are quite reasonable. As are the entry fees at only €10 minimum deposit. IQ Option is the online broker adapted to all budgets.

You have to add its trademark: IQ Bot. It is an optimised version of an automatic trading robot that enables hundreds of stock market operations to be carried out autonomously with a yield of over 80% success. For $100 of initial bet, it’s a bet that pays off quickly.

BDSwiss

The main advantages

  • position opening from 5€
  • efficient customer service
  • reliability and financial security

BDSwiss is what could be called a model of rationality. The CFD broker has one of the highest scores with a return of 85%. It has become a favourite in many European countries such as Germany, Austria and a large part of Scandinavia with Norway and Sweden. BDSwiss, since 2012, brings together both the strength of a large international financial holding company with all the guarantees of capital security, and the dynamism of a start up using FinTech tools very well adapted to its core target.

The Swiss broker offers premium support with world-renowned and award-winning customer service. It is also appreciated for its affordable brokerage fees and very low order placement. It is possible to carry out transactions from €5. The number of markets and financial products is in the upper middle of the market.

To complete our broker comparison

A few more names are worth mentioning in order to cover the sector exhaustively:

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