The short answer
Choose a broker on regulation first, cost second. A broker holding a licence from a top-tier regulator — the FCA (UK), ASIC (Australia), MAS (Singapore) or similar — that keeps client funds segregated from its own is the baseline; nothing else matters if you cannot get your money back. After that, compare all-in costs (spread plus commission), execution quality, and how easily withdrawals actually work. Treat unregulated offshore brokers offering huge leverage as a red flag, not a bargain.
Regulation comes first
Everything else is irrelevant if the broker can lose or withhold your money. Start by confirming the broker is authorised by a top-tier regulator — the FCA, ASIC, MAS, or an equivalent — and verify the licence on the regulator's own website, not just the broker's marketing.
Full guide: MAS-regulated brokers, explained (and how to verify one)
Strong regulation brings real protections: segregated client funds (your money held separately from the firm's), capital requirements, and dispute processes. A tier-1 licence is the single best filter you have.
The real costs
Once regulation checks out, compare the all-in cost of trading: the spread plus any commission. A raw-spread account with commission can be cheaper than a wide zero-commission spread — do the arithmetic on the pairs you will actually trade, not the headline EUR/USD number.
Watch for the quieter costs too: overnight swap charges, inactivity fees, and withdrawal fees. A slightly wider spread from a solid broker beats a tight one you cannot trust.
Execution and withdrawals
Good execution means your orders fill near the price you expect, without excessive slippage or frequent requotes. Reviews and a funded test with small size tell you more than any advertised figure.
Test the withdrawal process early, with a small amount. A broker that makes deposits instant and withdrawals slow or difficult is telling you something important. The ability to get your money out on demand is the whole point.
Platform, leverage and tools
The platform should be stable and one you find usable — most brokers offer MetaTrader or a proprietary app. Nice-to-haves like charting and a demo account matter, but never let a slick platform distract from regulation and cost.
Be wary of brokers leading with enormous leverage (1:500 and up). As the leverage guide explains, that usually signals a lighter-touch regulator, and it is a maximum you should never approach anyway.
Red flags that end the conversation
Some signs should rule a broker out immediately:
- No verifiable tier-1 regulation, or a licence you cannot confirm on the regulator's site.
- Bonuses with trading conditions that lock up your deposit, or pressure to fund quickly.
- Withdrawal problems in credible reviews — the most reliable warning of all.
- Guaranteed profits or account-management offers, which reputable brokers never make.
When in doubt, choose the more boring, better-regulated broker. See our guide to forex scams for how these traps are built.
Frequently Asked Questions
What is the most important thing when choosing a forex broker?
Regulation. A licence from a top-tier regulator such as the FCA, ASIC or MAS, with segregated client funds, is the baseline. Nothing else matters if you cannot reliably get your money back.
How do I check if a broker is regulated?
Find the licence number on the broker's site and verify it directly on the regulator's own website. Do not rely on the broker's marketing claims alone — confirm the registration independently.
What are segregated client funds?
It means the broker holds your money in accounts separate from its own operating funds, so your capital is protected if the firm runs into trouble. It is a standard protection at well-regulated brokers.
Is high leverage from a broker a good thing?
No. Very high leverage (1:500 and above) usually signals a lightly regulated broker, and it is a maximum you should never fully use. Prioritise regulation and cost over headline leverage.
What are the warning signs of a bad broker?
No verifiable tier-1 regulation, withdrawal complaints in reviews, pressure to deposit, bonuses that lock up funds, and any promise of guaranteed profits or managed returns.