OnlineForex Rating Formula v1

Forex Ratings

OnlineForex.biz -The World Brokers Rating Formula v.1.0

After reviewing dozens of Forex brokers and drawing on 15 years of personal trading experience, the OnlineForex.Biz brokerage rating formula is now finalized and unveiled. Using this formula, OnlineForex.Biz has started rating the world’s leading Forex brokers and aims to soon cover the most significant ones globally.

Note:
🔰NEW:  Version 5.0 of the Rating Formula is published on TradingCenter.org: 🔗 RatingFormula 5.0 at Trading Center

Introducing OnlineForex.biz Rating Formula v.1.0 to the Web

The Formula is based on four key trading characteristics:

◘ Company Reliability {28%}

Focused on the security of client funds and effective risk management on behalf of traders.

◘ Competitiveness and Cost of Services {30%}

Aimed at ensuring low-cost transactions that enhance profit potential for clients.

◘ Trading Options {26%}

A broad range of trading options makes trading more convenient and often more profitable.

◘ Technology and Innovation {16%}

In online trading, technology is crucial for security and seamless execution. Points are awarded not only for technical infrastructure but also for any features that set a company apart from its competitors.

📜 History:

The first and second versions of the Rating Formula were applied to Online Forex Brokers. Versions 3.0 and 3.5 were used for Binary Options Brokers. More information here:

» Forex Rating Formula –V.5.0 at TradingCenter.org

» Forex Rating Formula –V.4.0 at TradingCenter.org 

» Forex Broker Rating Formula –V.2.0 at TradingCenter.org

» Forex Broker Rating Formula –V.1.0 at OnlineForex.Biz

This is the basic structure of formula v1.0

Now, let’s take a closer look at the analysis of each of the four mentioned Rating Factors:

1. Reliability of the Forex Broker Company

Table: Reliability Weighing

1. RELIABILITY
28%

1.1 Regulation
12%

1.2 Headquarters
5%

1.3 Found
4%

1.4 US Residents
2%

1.5 FPA Rating
5%

The reliability and credibility of a broker are the most important factors in any type of trading. Therefore, we placed extra emphasis on regulation, headquarters location, and years of operation. Forex brokerage firms that are highly regulated are generally considered more secure for trading. Being based in countries like the UK or Switzerland indicates adherence to strict domestic legislation, reducing the likelihood of broker failure. A long-standing presence in the market reflects both experience and a proven business model.

Table: Reliability Analysis

1. RELIABILITY
ANALYSIS

1.1 Regulation
FSC (BVI)=1, CYSEC=3, CBI=4, ASIC=4, BaFIN=5, FSA (UK)=6, MiFid=8

1.2 Headquarters
Offshore=0, Cyprus=2, Ireland, Australia=4, USA, UK, Switzerland=5

1.3 Found
0-2 Years=0, 2-4 Years =1, 5-7 Years=2, 7-10 Years=3, 10+ Years = 4

1.4 US Residents
Yes=2 / No=0

1.5 FPA Rating
Actual Forex Peace Army Rating (we use it for differentiating our results)

2. Forex Broker Competition Analysis

Table: Competition Weighing

2. COMPETITION
30%

2.1 Spread on EUR/USD
12%

2.2 Commissions Charged
8%

2.3 Deposit / Withdrawal Commissions
2%

2.4 Leverage
4%

2.5 Customer Service
4%

Competition is one of the primary factors a typical trader looks for in a Forex broker. The size of the spread, along with the presence of trading commissions, largely determines the potential for trading profits. For day traders and scalpers in particular, a low spread is absolutely essential. High leverage also works in favor of traders, while quality customer service enhances the overall trading experience.

Table: Competition Analysis

2. COMPETITION
ANALYSIS

2.1 Spread on EUR/USD
<0,5=12%, <0,75=10%, <1=8, <1,5 = 6, <2=4, <3=2, <4=1, >4=0

2.2 Commissions Charged
No Commissions=8, Low Commissions=4, Medium Commissions=1

2.3 Deposit / Withdrawal Commissions
Yes=0, No=2%

2.4 Leverage
400%+=4, 300%=3, 200%=2, 100%=1, <100%=0

2.5 Customer Service
Live Chat=2, 24/7=2, 24/6=1, 24/5=0, Phone=1

3. Forex Broker Trading Options

Table: Trading Options Weighing

3. TRADING OPTIONS
26%

3.1 Available Assets
10%

3.2 Bonus / Rebate
8%

3.3 Scalping
2%

3.4 Hedging
1%

3.4 Deposit Methods
2.50%

3.5 Withdrawal Methods
2.50%

The number of available assets is important for every trader. While some traders focus exclusively on trading a specific Forex currency pair (like EUR/USD) or a particular commodity (usually Gold or Brent), our ratings place extra weight on the variety of offered assets. This reflects a well-organized Forex company that aims to expand and adapt to a broader range of customer needs.

Table: Trading Options Analysis

3. TRADING OPTIONS
ANALYSIS

3.1 Available Assets
Number of Currencies=8%, Commodities=1%, Stocks & Indices=1%

3.2 Bonus / Rebate
10% Bonus/ Rebate=2, 15%=3, 20%=4, 25%=5 30%=6, 35%=7, 40%+=8

3.3 Scalping
Yes=2 / No=0

3.4 Hedging
Yes=1 / No=0

3.4 Deposit Methods
For each method 0,5%, max=5

3.5 Withdrawal Methods
For each method 0,5%, max=5

4. Forex Broker Technology / Innovation

Table: Technology Weighing

4. TECHNOLOGY
16%

4.1 Available Platforms
5%

4.2 API Trading
1%

4.3 Expert Advisors
2%

4.4 Mobile Trading
2%

4.5 MT4 / MT5 Availability
1%

4.6 General Innovation
5%

Technology plays a crucial role in online trading. Advanced trading technology offers traders key advantages, such as real-time prices, fast execution, and minimal order delays. The variety of trading platforms is also an important factor in our ratings. Extra weight is given to brokers that offer API access and Expert Advisors, enabling automated Forex trading. Availability of MT4/MT5 is considered a plus, as the MetaTrader platform is widely regarded as a trading standard today. Finally, the overall level of innovation by a Forex broker is highly valued. Innovation can include new trading tools, improved techniques, simplified order execution, or unique technical analysis features. A broker that invests in innovation demonstrates long-term thinking and a customer-focused business philosophy—both signs that the broker intends to stay in the market and protect its reputation and clients’ interests.

Table: Technology Analysis

4. TECHNOLOGY
ANALYSIS

4.1 Available Platforms
Each Platform=1%, max=5

4.2 API Trading
Yes=1 / No=0

4.3 Expert Advisors
Yes=2 / No=0

4.4 Mobile Trading
Each Supported Device=0,5%, max=4

4.5 MT4 / MT5 Availability
Yes=1 / No=0

4.6 General Innovation
High Innovation=5%, Medium Innovation=2.5%

 

Final Conclusion

If we can measure real value in an industry, we can choose the best partners and avoid scams. In the case of Forex brokers, knowing your partners’ true value can save you money.

Note: The formula presented in this article is based not only on trading experience but also on business planning expertise, including the appraisal of many mid-sized companies across various industries in the broader economy.

 

■ Giorgos Protonotarios, Investment Consultant

MSc in International Banking & Finance

 

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OnlineForex.biz

OnlineForex Rating Formula, 16th of August 2012
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