It is imperative that when using a forex robot you choose a good forex broker to run it on. The difference between good results and bad results from trading with a forex robot can be down to the choice of broker that you make. On this page we will look at some of the key points to consider when looking for the best forex broker and also recommend a forex broker for trading forex robots that we have first-hand positive experience with.
Why does it matter what forex broker I use?
It matters greatly what forex broker you use for a variety of different factors worth considering. For instance, some forex brokers are what is called a “market maker” which basically means they take the opposite side of the trade to you. Now, as you can imagine it is not a good situation to have your forex robot trading against the very broker you are trading with. In this instance it would be in the interest of the forex broker to win which already puts your forex robot at a disadvantage. Now, compare that to an ECN forex broker that will not interfere with your trading or trade against you but instead send your order through to the liquidity providers to ensure that your trade gets executed at the best possible price. In this instance it is in the ECN forex broker’s interest that they give you the best possible trading conditions as it means you will be a happy client and continue to trade through them. Thus we can conclude that an ECN forex broker is by far the better choice.
What should I look for in a forex broker?
Well we have already covered the fact that you should be using an ECN forex broker as paramount importance and alongside this you should also ensure that your forex broker is regulated. When you are trading with a forex broker that is regulated you have reassurances that your trading funds are safe. Regulations are in place to ensure that forex brokers act professionally and do not rip off clients. This gives you great peace of mind which is very important considering you are trusting the forex broker with your investment. That being said there are many regulated forex brokers to choose from so there is no need to even consider using a forex broker that is not regulated. It is just not worth the risk. Any serious forex broker would have taken the time and effort to become regulated if they are in it for the long run.
What forex broker conditions should I look out for?
Apart from using a regulated ECN forex broker there are other factors that will affect your forex robots results which are very important to consider. The main things are the forex brokers spreads and slippage. Now for best forex robot results you want the lowest spreads possible and minimal slippage. Each time you trade, you have to pay your forex broker the spread so of course if the spread is smaller then so are your trading costs and spreads can also affect the results of forex robots – specifically scalpers. If a forex robot only makes a couple of pips in each trade then of course you do not want the spread eating too much into profits. In fact in some extreme instances some forex robots require very low spreads to produce any good results. You will find that the major currency pairs such as the EURUSD & GBPUSD have the lowest spreads due to the amount of liquidity (demand) for them. More exotic pairs will have wider spreads and this can make it harder to profit trading them although some forex robots that happen to trade exotic currency pairs do so with a suitable strategy to compensate for the wider spreads. Slippage is also a big factor. Slippage is basically the difference between the price you wanted to enter your trade at versus the actual price your forex broker executed it. Some non-ECN brokers will do tactics to increase slippage in order to give you an unfavourable entry price and to give them a head start. An ECN forex broker on the other hand will have minimal slippage and use good liquidity providers to ensure that your trade gets executed at the best price possible – ideally, the price you entered at.
Will the forex robot work on my forex broker?
OK, so you know now that you need a regulated ECN forex broker with low spreads and minimal slippage. You may also want to check that the forex robot you are using will be compatible. In most instances your forex broker will provide the MetaTrader 4 trading platform (mt4) where you will run your forex robot on as most are developed for mt4. This is the first thing to check your broker provides which 99.9% of the time they will. Next, check if the forex robot requires hedging as some brokers will not allow this. Other than that if you stick to the key factors mentioned above you should be using a good forex broker.
What else should I consider when choosing a forex broker?
The other things to consider when choosing a forex broker is the minimum deposit required, the methods of deposit/withdrawal, leverage offered and if they accept clients in your jurisdiction.
A regulated ECN forex broker that has low spreads, minimal slippage, good selection of liquidity providers, many methods of account transfers, accept small deposit accounts and overall can be considered one of the best forex robot brokers is FxOpen. Head on over to them and get started on a forex demo or real account for the best possible trading conditions for your forex robot.