Choosing the best forex broker for big accounts can be a very exhaustive task because the number of available options is enormous. With so many forex brokers advertising themselves as being the best, people go to particular websites to see broker rankings wishing to find the best one. However, the more they read, the harder the choice becomes.
If you want to invest in the forex market and you are looking for a safe broker, I am sure that you’ve surfed on the net and read plenty of articles. Absolutely, you’ve seen a lot of both positive and negative reviews about many of them. If you check the forex forums where traders chat about the best forex brokers, you will find that opinions are different, even sometimes contradict each other. The truth is that several forex brokers are nothing more than scam companies without any license that proves their reliability. Therefore, once you deposit your money with them, it becomes impossible to withdraw them back. Indeed, Scam brokers damage the reputation of the entire industry, including legitimate brokers.
A. How to Select the Legitimate Forex Broker for Big Accounts.
We mean by the legitimate broker a licensed broker. That is to say, a broker that has got a license from a government institution that regulates financial services in its home country. In addition, most brokers also register with the regulatory bodies in other countries where they have large operations. Generally speaking, brokers that have registered in many countries have a larger client base and offer better conditions and lower costs to their customers.
As far as the unlicensed brokers are concerned, they are to be avoided. Since this article is about finding the best forex broker for big accounts, it is necessary to clarify that not all forex brokers are recommended for big accounts. Many of the regulated brokers are not suitable when it comes to big accounts. This is because some forex brokers target only casual traders and others don’t have the necessary equipment to handle high-volume traders. Trading with such brokers may cause issues and awkward situations when it comes to trading big. In this list, we provide high-profile brokers with which you can OPEN BIG ACCOUNT SAFELY.
Please note that we don’t review, or promote unlicensed brokers in this website.
What is a big forex account?
There is so much debate about the criteria that should be meet in a forex big account. Generally speaking, many brokers offer V.I.P services for accounts that exceed $10,000. Therefore, an account holder of this amount can be considered as a big account holder. However, some forex brokers require more than that to be a premium trader. Some require at least $20,000 while others ask for $500,000. In my opinion, a person who takes trading seriously should act as a big account trader regardless of his investment. Most brokers will generally classify you as a VIP client if you fund your account with more $10,000 dollars. Therefore, you will be favored and you will get the best trading conditions.
As a result, when you look for the best forex broker for big accounts, you should take the following point into consideration:
- First, You should look for the minimum amount of money required to open a VIP account. For example, if you have $10,000 and the broker you have chosen requires $20,000, you won’t get the VIP privileges. Therefore, it is highly recommended to look for another broker that requires an equal amount of money that you have.
- Second, You should avoid trading with market makers. Market maker trades against you. Therefore, if you open a big account, and you win, it is highly probable they won’t be happy. As a result, they will trick and twist your orders. (I will explain why and how next)
Why a Market Maker isn't the Best Forex Broker for Big Accounts?
Many people neglect the fact that the broker plays a large role when it comes to trading. Since our topic is about the Best Forex Broker for Big Accounts, we don’t want to go far and explain how some brokers manipulate the market. Still, we will explain why the market maker isn’t suitable for big accounts.
In the forex market, just like in any other market, when you open a trade, someone else has to take the counterparty. Therefore, in order to win, someone else has to lose. So what happens exactly when you trade with a market maker?
When you trade with a market maker, it takes the counterparty of your positions. That is to say, your trades are executed in the internal servers of the market maker and not in the real forex market. In this situation, the market maker is your liquidity provider. You buy from your broker and you sell to your broker. What this exactly mean? It simply means that when you win money, your broker loses it. Therefore, the question that should be asked here is: why market makers accept big accounts?
Why market makers accept big accounts?
Market makers know that the majority of retail traders lose money in forex. Therefore, brokers have a high profitability rate. They will accept big accounts expecting that the trader will potentially lose his money. However, when the trader makes consisitent profits, he becomes an issue. The broker starts to lose money and they won’t like it.
Market makers usually pay out winning positions and process all withdrawals. While they are suitable for small accounts since small winnings don’t affect their profitability, they are not recommended for big accounts because of the conflict of interest. When a trader wins big amounts of money on a regular basis, he becomes an issue to the market maker. In order to stop him from winning, the broker resort to “tricks” such as platform malfunctioning, poor execution, slippage, requotes during news events, or even stop loss hunting.
We think that some good market makers won’t do that, but they still have to make money. Therefore, they will do something to stop losing money.
What is the solution?
The solution is to use ECN/STP brokers. ECN stands for Electronic Communication Network. That is to say, a network that connects the trader-the broker- and the liquidity provider. An ECN broker is a forex broker that processes all orders electronically directly to its liquidity providers without a dealing desk. The broker’s platform is connected directly to the liquidity providers which is a big bank such as JP Morgan. As a result, the trades executed by the trader are operated directly in the forex market, and not against their broker. Some best ECN forex brokers get liquidity from many liquidity providers to have lower spreads for their clients. Such brokers are also reputed as STP brokers (Straight-Through Processing) because they execute the trades directly to a third party which is a big bank.
Indeed, when you trade with an ECN/STP broker, you trade against the liquidity provider. Therefore, you don’t have any conflict of interest with you broker. If your trades are profitable, your broker takes money from the liquidity providers. However, if your trades are losers, the broker will give your money to the liquidity providers. Your broker remains a mere intermediate between you and the market. Furthermore, ECN brokers have interests if you keep winning the trades. That guarantees the continuation of your activity with them as they profit from spread. This kind of brokers are the safest brokers to trade with when it comes to big accounts.
These brokers are the safest brokers as far as big accounts are concerned.