5 Best CySEC-Regulated Forex Brokers for 2024

How to Choose a Forex Broker Regulated by CySEC?

Now that we have outlined our top picks for each category, it is time to delve deeper and examine all the small details in a broker’s offering that traders need to consider before deciding to move forward and opening a trading account with the company.

What protections do you have under ESMA regulation?

As mentioned in the introduction, CySEC operates under ESMA’s MiFID II. What that means for retail traders is that they are entitled to certain protections mitigating their trading and non-trading risks. To understand what those protections are, consider the following:

• Segregated funds. In order to reduce the risk of accounting errors, brokers are mandated to keep their clients’ funds in separate bank accounts from the ones used for their corporate capital.
• Negative balance protection. This safety mechanism prevents a trader’s losses from exceeding their account balance. In case a trader’s margin is running dangerously low and a sudden upsurge in market volatility causes their running losses to exceed their account balance, the negative balance protection will be triggered, and the broker will cover the resulting negative markup. In that regard, negative balance protection is a retail trader’s last line of defense in a volatile market environment.
• Leverage. The advantages of trading leveraged products are twofold – instantaneous entries into trades since there is no need for physical delivery and bigger profits. That is, the leverage multiplies the profits generated from winning trades and the losses incurred from losing ones. In that regard, leverage is the key determinant of a trader’s market exposure, which is directly affected by market volatility. That is why under MiFID II, the maximum leverage afforded to retail traders is capped at 1:30.
• Compensation scheme. Compensation schemes and private indemnity insurance protect clients of a broker against the company’s credit risks and liabilities. In the unlikely event that a broker should go bankrupt, a trader will be compensated for any losses incurred as a consequence of the insolvency by up to a certain amount. Brokers regulated by CySEC participate in the Investors Compensation Fund (ICF), which covers their clients by up to EUR 20,000.

Read more about Best regulated forex brokers.

What are the differences between retail and professional traders?

Under MiFID II, brokers are mandated to classify their clients in two categories: as ‘retail’ or ‘professional’. Retail traders are protected by the above-mentioned safety mechanisms, whereas the same may not be applicable to professionals. They are classified as such when they have sufficient trading experience and capital to take on larger risks. I would advise against opening a pro account unless you have at least 5 years of experience trading leveraged products.

A professional trader with a CySEC-regulated broker can opt for a maximum leverage of 1:500 in order to gain bigger market exposure, whereas the maximum leverage for retail traders is capped at 1:30. Accordingly, the risks faced by professional traders are also multiplied. And since they usually trade much larger volumes compared to retail traders, professionals are excluded from the negative balance protection mechanism.

Choosing whether to be classified as a retail or professional trader essentially boils down to means, goals, aspirations on the market, and a trader’s risk aversion. Traders are ultimately responsible for deciding whether they are ready to face larger risks to make bigger profits.

Explore Best MiFID-regulated forex brokers.

How to choose a trading account based on its pricing?

A broker may have several account types, each with different pricing mechanisms. The question is, how to know which one is best fitted for your particular style of trading? I will try to answer this question by providing an example with two distinct accounts, one STP and the other ECN:

The biggest difference between STP and ECN accounts, apart from the execution model, is the pricing mechanism. Usually, STP accounts afford commission-free trading and floating spreads, whereas ECN accounts have fixed commissions and raw spreads (typically starting from 0.1 pips). At first glance, the former sounds more favorable because you only have to pay one cost – the spread – rather than two.

Read more about Best STP forex brokers and Best ECN forex brokers.

Many brokers recognize the psychological significance of this sort of thinking and seek to exploit it by raising the spreads on their STP accounts to the point where they are no longer the more competitive option. I will now demonstrate how to do a quick test for yourself to evaluate the competitiveness of a broker’s ECN and STP accounts.

Pick an instrument, say, the EURUSD. Suppose also that the spread on the pair is 0.9 pips on a broker’s STP account and 0.1 pips on its ECN account. There is also a $6 commission for trading 1 lot (100,000 units) contract. If the EURUSD pip value is $10, you can do a simple calculation to determine the value of a hypothetical position on the EURUSD executed on both account types. The formula is the value of a trade = spread x pip value + commission. When we pop in the above values, this is what we discover about our hypothetical broker:

This is just a hypothetical example, but hopefully, it illustrates how more can be less in trading. So it’s worthwhile evaluating the costs of a broker you consider opening an account with for yourself before doing so. And if you are still uncertain, you can always check out our database of reviews to sort out the most competitive brokers.

Check out our list of Best lowest spread forex brokers.

What should you consider when it comes to liquidity?

Market liquidity, in short, relates to the ease with which brokers can execute trading orders. The more liquid the market, the smaller the discrepancy between the requested price and the price where the order gets filled. Accordingly, the risk of negative slippage is more significant in illiquid markets. That is why traders must select a broker with access to deep liquidity that can guarantee fast order execution in under 100 milliseconds.

The most common brokers operate on a No-Dealing-Desk (NDD) basis, meaning they obtain their liquidity from external providers, such as banks and large financial institutions. The most reliable brokers tend to have a large pool of liquidity providers to ensure quality order execution at most times.

To make sure you choose a broker that guarantees order execution under the most favorable market conditions at all times, look for a ‘best policy execution’ in the legal docs section of the website. This is a legal mandate and commitment by the broker to provide traders with the most favorable price feeds at all times. I have always sought to work with brokers with such a policy to decrease the likelihood of negative slippage.

Check out our guides on best gold trading brokers and best oil trading brokers.

How to choose a trading platform?

Trading platforms are used to observe price action behavior and determine viable opportunities for entries into the market. Traders use technical indicators, drawing tools, and other features to examine various price patterns, changes in volatility, liquidity, and so on to gauge the underlying market sentiment.

The best platforms, in my experience, are also the most versatile ones. They include a wide spectrum of technical indicators, such as Fibonacci retracement levels, oscillators, trend-based and range-based indicators, and others, as well as drawing tools, such as trend lines, channels, wedges, and so on. Their design is also important. The most user-friendly platforms are the ones that afford price action to be manipulated with ease.

Traders should also consider whether their broker’s platform accommodates easy and fast order execution via one-click trading, supports algorithmic trading via Expert Advisors (EAs); and supports complex orders, like market, limit, and limit and stop orders, etc.

Check out our dedicated guide on best forex trading platforms.

Here are some popular trading platforms you could find on the market today:

MetaTrader 4 (MT4): MT4 is one of the most widely used trading platforms in the forex market. It offers a user-friendly interface, advanced charting capabilities, and a wide range of technical indicators and expert advisors (EAs). MT4 is known for its stability and is compatible with Windows, Mac, iOS, and Android devices. Read more about best MT4 brokers.

MetaTrader 5 (MT5): MT5 is the successor to MT4 and offers additional features and improvements. It provides enhanced charting options, a built-in economic calendar, more order types, and access to other markets like stocks and commodities. Like MT4, MT5 is available on various operating systems. Read more about best MT5 brokers.

cTrader: cTrader is a popular trading platform known for its advanced order execution and transparency. It offers a customizable interface, multiple charting options, and a wide range of technical analysis tools. cTrader also provides access to a community of traders where you can share strategies and indicators. Read more about best cTrader brokers.

TradingView: Although not a dedicated trading platform, TradingView is widely used for its powerful charting capabilities and social trading features. Many forex brokers integrate TradingView charts into their platforms or offer them as a standalone option. TradingView allows you to analyze charts, create and backtest trading strategies, and engage with a community of traders. Read more about Best TradingView brokers.

NinjaTrader: NinjaTrader is a platform primarily used by futures and forex traders. It offers advanced charting, analysis tools, and strategy development capabilities. NinjaTrader provides a range of order types and integrates with various data providers. It is known for its algorithmic trading capabilities.

Read more about best NinjaTrader brokers.

Also, some brokers offer proprietary trading platforms, which are developed in-house and unique to their brokerage. These platforms are designed to provide a tailored trading experience with specific features and functionalities.

What to Avoid When Choosing a CySEC-Regulated Broker?

When it comes to protection, CySEC-regulated brokers offer almost the same safety mechanisms across the board because they are all made to comply with MiFID II. Hence, traders can focus more on other aspects of a broker’s offering when looking for the right partner.

Here are several things to avoid in a broker:

• Classic (STP) accounts with spreads starting from 1.5 pips or Raw (ECN) accounts with round-turn commissions above $7. These are considered above the industry average.
• Brokers that do not offer access to all major markets including FX, commodities, CFD shares, and indices.
• Brokers that cannot guarantee average order execution speeds under 100 milliseconds.

How to Avoid Forex and CFD Scams?

Scammers rely on the gullibility of traders. A commonly employed tactic by fraudsters is to promise quick and easy profits at no risk to the trader. Often, scammers would use labels that closely resemble the brands of real and legitimate companies.

To make sure you are not falling victim to such a scam, always check CySEC’s registry before funding an account with a broker. You can check if a broker’s URL matches the one listed on the website, which is a sure way of knowing you are not dealing with a clone firm.

Another thing to remember is that you must be careful where you leave your information online. Registering your details on suspicious pop-ups promising you enormous profits could result in your contact details ending up in a scammer’s dialing list. Remember, no licensed broker would make unsolicited cold calls.

The next time you get contacted out of the blue with promises of becoming the next Warren Buffet, you must remember that you are most likely speaking to a scammer. In my experience, nowhere is the “if something sounds too good to be true” saying more accurate than in the world of trading. That is why you should do your due diligence before opening an account with a broker.

Our Methodology

FX Empire has pioneered a unique methodology for evaluating Over-the-counter (OTC) derivatives brokers worldwide. Our goal is to provide highly sophisticated content outlining the advantages and disadvantages of a broker’s service so that our readers can make informed trading decisions.

The trading industry is continuously evolving, necessitating regular updates to our methodology so that we can ensure it stays up-to-date with all the latest developments. Our team of dedicated professionals ensures that our reviews reflect all the latest changes and market trends.

We test each broker systematically by employing over 250 variables across nine categories:

• Trust
• Fees
• Account Types
• Tradable Instruments
• Platforms and Tools
• Deposits and Withdrawals
• Customer Support
• Research
• Education

Our aim is to be as objective as possible when we carry out our reviews. We check the licenses of all broker entities operating under the same trade name and the Client Agreement’s clarity to ensure the company is fully transparent. Moreover, we assess the competitiveness of a broker’s trading and non-trading fees.

We collect information by opening a live account with a broker entity and testing its services in real time. We measure the spreads, swaps, and commissions on its most popular account type and compare our findings to the industry average.

We also assess the functionality of the available platforms and supporting tools, the number and class of tradable instruments, and the reliability of the customer support. Finally, we carry out а qualitative and quantitative analysis of the research and educational materials. In all of these aspects, we look for diversity and functionality.

For this guide, we only considered brokers authorized by the Securities and Exchange Commission in Cyprus (CySEC) that have a physical presence in Cyprus, accept deposits and withdrawals in EUR, and provide customer support during the European trading session. Other parameters include a high transparency level, trading fees below the industry average, and user-friendly and feature-rich platforms.

We abide by our strict guidelines for editorial integrity based on the objective standards we have set for our reviews. You can read more about our review process here.

Meet Our Writers

The team of forex and CFD analysts and editors at FXEmpire is composed of trading industry professionals and seasoned financial journalists. Our experts have been published on leading financial websites such as Investopedia and Forbes. In addition, they all have extensive trading experience.

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