5 Best European Regulated Brokers for 2024

List of the Best European Regulated Forex Brokers

How is forex trading regulated in Europe?

All investment and trading activities in the EU fall under the Markets in Financial Instruments Directive II (MiFID II), mandated by the European Securities and Markets Authority (ESMA). ESMA seeks to foster fair, competitive, and resilient markets, which is achieved via comprehensive regulation.

While ESMA’s rigorous framework envelops all financial operations with derivatives, thus making trading a lot safer as a whole, it also makes it more challenging for traders to find a competitive advantage. Brokers in Europe cannot provide financial services to traders unless they adhere to ESMA’s regulations.

That is why, here at FX Empire, our goal is to review brokers and separate the ones that strike the perfect balance between safety and efficiency.

How Did FX Empire Choose the Best EU-Regulated Brokers?

• ESMA regulation: We checked the broker’s authorizations and compliance with ESMA’s MiFID II. We also looked for direct trading protections, such as negative balance protection, and indirect ones, like compensation schemes.
• Offices in EEA-member countries: We only considered brokers (and broker entities) that are either headquartered or have offices in countries that are members of the European Economic Area (EEA).
• Deposit and withdrawal methods: We assessed brokers that accept payments in euros.
• Local customer support: Due to the specific needs of traders based in Europe, we only considered brokers that provide customer support during the European trading session.
• Competitive pricing: We evaluated how well-calibrated the trading fees of a broker are, whether commission-free trading is available, and how low the floating spreads are.
• Trading software: Traders need to be able to conduct thorough and multi-faceted technical analyses of price action behavior. That is why we analyzed the usability and efficiency of a broker’s trading platforms and tools.
• Availability of trading instruments: What is also essential is the number and variety of tradable instruments. We assessed the range of markets a broker provides and whether traders can exploit various trading opportunities in multiple ways (with CFDs, futures, options, etc.)
• Quality of order execution: We looked into a broker’s pool of liquidity providers, availability of a ‘best execution policy’, and average speed of order execution.
• Accounts: Versatility is also important when it comes to account types. It was thus interesting to see whether one account type’s advantages compensate for another’s disadvantages and vice versa. We also looked for swap-free trading (Islamic Accounts), minimum deposit requirements, available base currencies, and others.
• Supporting content: Finally, we conducted qualitative and quantitative tests of the research and educational content. Such materials’ scope and intricacy are important for beginners and advanced traders.

Our team of experts has identified each broker’s strengths and weaknesses using FX Empire’s comprehensive methodology.  You can read more about it and how we conduct our tests here.

Now, let’s dive into the selected brokers.

How to Choose a Forex Broker in Europe?

Now that I have covered our top picks for each category, it is time to outline the specific considerations traders need to make for themselves when looking for a trustworthy partner in Europe:

ESMA, MiFID II, and Your Rights as a Trader

The European Securities and Markets Authority (ESMA) is the legislative body responsible for setting the rules under which market participants, financial institutions, brokers, and others interact. That is why your first task is to determine whether the broker you are interested in is listed in the Markets in Financial Instruments Directive (MiFID) register. You can check that here. This is the only way to confirm its compliance with the most rigorous safety policies in the industry.

Check out our list of Best MiFID-regulated forex brokers.

Under MiFID, you are entitled to certain protections as a retail trader (excluding traders classified as ‘professional’). Those protections include the following:

• Segregation of client funds. Brokers must keep their clients’ funds in separate bank accounts from the ones used for their corporate capital. This is crucial for mitigating the risk of accounting errors.
• Negative balance protection. Negative balance protection means that a trader’s losses cannot exceed their account balance. This protection is indispensable when trading high-risk instruments, such as Contracts for Difference (CFDs).
• Limited market exposure. Beginners are especially susceptible to the risk of adverse price fluctuations, which is why the maximum leverage allowed for retail traders is set at 1:30. Anything beyond that can be too risky for inexperienced traders.

Depending on the jurisdiction where a broker is situated, a compensation scheme may also protect its clients against the company’s credit risk and liabilities. For instance, brokers regulated by the Cyprus Securities and Exchange Commission (CySEC) participate in the Investor Compensation Fund (ICF). In the unlikely event of the company becoming insolvent, traders can be compensated by up to 20,000 EUR. The Financial Services Compensation Scheme (FSCS) – under The Financial Conduct Authority (FCA) in the United Kingdom – protects traders by up to 85,000 GBP.

Find out more about the best CySEC regulated brokers and best FCA regulated brokers in our detailed guides.

Professional vs Retail Accounts

The above-mentioned discrepancy between retail and professional accounts underscores an important tradeoff – more protections for the former vs more opportunities for the latter.

Professional traders can enjoy a maximum leverage of 1:200, meaning they can generate proportionally larger profits on the same underlying trades. However, they are also exposed to a comparatively larger risk of adverse fluctuations and are not granted negative balance protection.

Broadly speaking, the more rigid the safety mechanisms, the more limited the profit potential of winning trades. That is why experienced veterans with the means to open a professional account with a broker should consider carefully whether this is a tradeoff they are willing to make. I would caution against opening a professional account unless you have more than 5 years of experience trading leveraged products with the same broker.

Explore Best forex brokers for professional traders.

How to Optimize Your Performance

Following up on the previous point, this sub-section seeks to briefly explain how traders can optimize their performance based on three key components in every broker’s service:

Trading Fees

Traders should choose an account type with a pricing model that best reflects the parameters of their strategies. For instance, high-frequency traders like scalpers and intraday traders, whose systems are predicated on frequently getting in and out of trades within a relatively short period of time, will be better off choosing a commission-free account with floating spreads.

On the other hand, high-volume traders, like position and day traders — who tend to trade less frequently — should aim to secure the tightest spreads possible.

While there is no one-size-fits-all type of account, selecting the best option based on your personal preferences means more favorable conditions and, therefore, bigger longevity on the market.

Take a look at our guide to Best forex brokers with lowest spreads.

Liquidity

The deeper the liquidity pool that a broker has access to, the better the order execution conditions it can serve its clients. That is why traders (especially professionals) should always check the speed and quality of order execution. The easiest way to do that is to see whether the broker has a ‘best execution policy.’ Given the underlying market conditions, the company is committed to providing the best price quotes when placing an order.

Precision and speed of order execution are also likely to be enhanced when a broker provides Virtual Private Server (VPS) hosting. As a rule of thumb, look for brokers that can accommodate ultra-fast order execution speeds of under 50 milliseconds.

Read more about Best forex brokers with VPS hosting.

Types of Available Instruments

When choosing a broker, it’s crucial to consider not only the variety of tradable instruments but also how these instruments can be traded, especially concerning your account balance and trading strategy. For example, a small account balance may limit your ability to trade in volatile markets like crypto CFDs or indices due to high margin requirements. Ensuring that your financial capacity aligns with your trading choices is essential. Many retail traders overlook the impact of margin trading on their account balance, leading to significant losses.

Explore Best stock CFD brokers in Europe.

Additionally, understanding the contract specifications provided by a broker is vital. Various instruments like FX pairs, commodities, and indices can be structured as CFDs, futures, or options, each offering different ways to capitalize on market opportunities. For instance, while a CFD trade on gold might incur losses due to interim price fluctuations, a long call option on the same gold position could limit the loss to the premium paid, offering more flexibility to handle market volatility. Thus, the ability to trade markets in diverse ways is as important as the range of markets available.

Check our guide to Best CFD brokers.

Platforms and Tools

A trading platform is your window into the market. It allows you to observe price action behavior and study potential opportunities for placing orders. Technical traders use a platform’s array of indicators, drawing tools, and other features to examine various price patterns, changes in volatility, liquidity, and so on to gauge the most favorable times to enter or exit the market.

The best platforms 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, etc. They are also the ones that allow you to scale price action up and down easily.

In addition to these components, when looking for a suitable platform, you must also look for efficiency. Ask yourself the following questions: Does the platform facilitate easy and rapid order placement through one-click trading? Does it support algorithmic trading via Expert Advisors (EAs)? Can it handle complex orders like market, limit, and stop orders? These factors, and more, contribute to a platform’s overall effectiveness.

Read more about the platforms in guides on the best MT4 brokers, best MT5 brokers, and best cTrader brokers.

What to Avoid When Choosing a European-Regulated Broker?

• Discrepancies in Broker Protections: Be aware of minor differences in safety measures among European-regulated brokers.
• Absence of ‘Best Execution Policy’: Steer clear of brokers without a clear ‘best execution policy’ in their legal documentation.
• Risks in Volatile Markets: Avoid brokers that don’t assure minimal slippage in highly volatile markets.
• Guarantee of Optimal Price Execution: Choose brokers that can guarantee filling orders at the most optimal price quotes.
• Variability in Compensation Schemes: Consider differences in compensation schemes (e.g., ICF’s 20,000 EUR vs. FSCS’s 85,000 GBP).

How to Avoid Forex and CFD Scams?

Scammers rely on the gullibility of traders. A common tactic fraudsters employ 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. That is why regulators like the FCA have registers where traders can read about such fraudulent companies pretending to be others.

The best and easiest way to protect yourself is to make sure you work with a trustworthy and transparent broker. You can find a comprehensive list of reliable brokers by jurisdiction here.

Another important consideration is online safety. Be cautious about where you enter your personal information. Registering your details on suspicious pop-ups or seemingly innocent landing pages that promise enormous profits could lead to your contact information landing on a scammer’s call 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. I think that 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 any broker.

Our Methodology

At FX Empire, we have pioneered a unique methodology for evaluating Over-the-counter (OTC) derivatives brokers worldwide. Our goal is to provide a comprehensive picture of a broker’s pros and cons so that our readers can make informed decisions. We understand their need to choose the best partner for their particular goals and needs.

Our dedicated professionals are working continuously to improve our system and keep it up-to-date with current 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

We strive to be as objective as possible, which is why our rigorous examinations are devoid of any personal bias as much as possible. We review the licenses of all the subsidiaries of a broker and check the fine print in the Client Agreement. The reliability of a broker is further determined based on the regulation, fees, and general transparency of the website.

We collect essential 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 test the functionality of the available platforms, the number and types of tradable instruments, the reliability of customer support, and the quality of the research and educational materials.

Regarding the current topic, we only considered brokers with an overall score of 4+ that are regulated by top-tier European regulators, such as FCA, CySEC, and BaFIN. We also only looked at brokers with physical offices across Europe, with fees below the industry average, and with 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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• Best CySEC Regulated Forex Brokers
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