OnlineForex.biz World Brokers Rating Formula v.1.0

After reviewing tens of Forex Brokers, and using a 15-year personal trading experience, the OnlineForex.Biz rating brokerage formula is ready and revealed. Based on this formula, OnlineForex.Biz has begun to rate the world’s major Forex Brokers and hopefully, the most important Forex Brokers around the world will be covered soon.

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

The Formula is based on 4 trading characteristics:

◘ Company Reliability {28%}

Aiming security of funds and thus effective risk management on behalf of clients/traders.

◘ Competitiveness and Cost of Services {30%}

Aiming for low-cost transactions which maximize the profit potential in favor of the clients/traders.

◘ Trading Options {26%}

The magnitude of trading options makes trading more convenient and usually more profitable.

◘ Technology and Innovation {16%}

In every online application, the technological factor is very important for security and no execution delays. Points are credited not only to technical aspects but to every other aspect that distinguishes a certain company from the competition.

History:

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

» Forex Rating Formula –V.5.0 TradingCenter.org

» Forex Rating Formula –V.4.0 TradingCenter.org 

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

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

This is the basic structure of formula v1.0

Now, let’s see an analysis of each of the 4 mentioned Rating Factors:

1. Reliability of the Forex Broker Company

Table: Reliability Weighing

The reliability and Credibility of a Broker is the most important issue for any kind of trading. So we gave extra weight to Regulation, Headquarters Base, and Years in the market. Forex Brokerage Companies that are highly regulated can be seen as more secure for trading. A home base in a country like the UK or Switzerland means that the domestic legislation is strict and the possibilities that a Forex Broker will collapse are minimized. The number of years in the market means experience and a successful Business Model.

Table: Reliability Analysis

2. Forex Broker Competition Analysis

Table: Competition Weighing

Competition is the first thing that a common trader is seeking from a Forex Broker. The magnitude of the provided spread combined with the existence of trading commissions can define to a high extent the trading profit potential. Especially for day traders or even scalpers, a low spread is absolutely crucial. The high level of leverage also is operating in favor of traders while the quality of customer service upgrades the whole trading experience.

Table: Competition Analysis

3. Forex Broker Trading Options

Table: Trading Options Weighing

The number of available assets is an important issue for every trader. Of course, there are many traders that care only about trading a particular Forex Currency Pair (like EUR/USD) or a certain commodity (usually Gold or Brent). For the purposes of our ratings, we gave extra weight to the variety of offered assets as this is a sign of a well-organized Forex Company which tries today to expand and adapt to more customer needs.

Table: Trading Options Analysis

4. Forex Broker Technology / Innovation

Table: Technology Weighing

Technology plays a huge role when trading online. State-of-the-art trading technology provides traders with certain advantages (for example real-time prices, fast execution, avoiding delays in orders, etc). Furthermore, the variety of trading platforms is a very important factor in our ratings. Also, extra weight is given to available API and Expert Advisors capabilities which provide the chance for Automated Forex Trading. MT4/MT5 availability is also considered a pro for a broker as the MetaTrader platform is almost a trading standard nowadays. Finally, the level of the Forex Broker's overall innovation is considered very important. Innovation may concern new trading tools, new techniques, simplicity of order execution, unique technical analysis features, etc. A Forex Broker that invests today to make his services more innovative means a broker with long-term thinking and a customer-based business philosophy. Both signs that this broker wants to stay in the market and thus he will protect his reputation and his client's interest.

Table: Technology Analysis

General Conclusion:

If we can measure real value in an industry then we can choose the best partners and avoid scams. In the case of Forex Brokers, knowing your partners' real value may save you some funds.

■ Giorgos Protonotarios, Investment Consultant

MSc in “International Banking & Finance”

Note: The formula presented in this article is not based only upon a trading experience but also upon a business planning experience including the appraisal of many middle-sized companies in several industries of the general economy.