How to choose a broker
The broker holds your money and executes your orders. The best analysis in the world is worthless if you cannot withdraw your profits. Answer these questions before you deposit, not after.
1. The licence — and what it actually covers
The question is not “is the broker licensed?” but who licensed it, and for what activity?
- Check the regulator's own register, not a logo on the broker's website. Every serious regulator publishes a public register of licensed firms and their licence numbers.
- Match the website, email and phone number against the register. Clone firms borrow a licensed broker's name and licence number, and differ in the domain or phone number.
- Read the type of licence. Some licences allow introducing and promotion only — not holding client money or executing trades. In the UAE, for example, Category 1 (dealing in securities) and Category 5 (arranging and advice) are fundamentally different.
2. Which entity are you signing with?
Many broker groups own several companies in several countries, each with a different licence. The brand may be licensed in the UK while your own account is opened with a sister company offshore, with far less protection.
Open the client agreement and find the name and licence number of the company you are contracting with. That entity — not the brand — decides which rules protect you.
3. Where your money sits, and what protects it
- Segregated client funds: your money is held in bank accounts separate from the company's own, so it cannot pay the firm's expenses or go to its creditors if it fails.
- Negative balance protection: you cannot lose more than you deposited, even in a violent price gap. It is mandatory for retail clients under European regulators.
- Compensation schemes: they pay out if a broker fails and cannot return client money. In the UK the limit is £85,000 per person; in Cyprus €20,000 or 90% of the loss, whichever is lower. Many regulators outside Europe have no scheme at all.
4. The real cost — in dollars
Do not compare brokers on “spreads from zero”. Work out the full cost of one lot on the instrument you trade:
- Spread: on gold one lot is usually 100 ounces, so a $0.30 spread costs $30 per lot, or $0.30 per 0.01 lot.
- Commission: some accounts offer tighter spreads plus a fixed commission per lot. Add the two.
- Swap: the cost of holding a position overnight, charged triple one night a week at many brokers.
And watch the spread during the news, not in a quiet hour. A broker whose spread widens tenfold at the moment US inflation data is released will hit your stop even if the real price never reached it.
5. Withdrawals before everything
- Deposit a small amount first.
- Request a partial withdrawal a few days later, and note how long it takes and any fees or unjustified questions.
- Only add more once the first withdrawal has arrived in full.
Most brokers return money to the method it was deposited from, under anti-money-laundering rules.
6. Contract specifications
Before you trade, open the contract specifications page and read: contract size, minimum trade size (usually 0.01; some offer 0.001), and the margin level at which your positions are closed automatically. These numbers decide how little you can actually risk in a small account — see How to size your position.
7. Warning signs
- Any promise of fixed or “guaranteed” returns.
- A staff member calling to push you to deposit or open trades, or offering to trade for you.
- Deposit bonuses with vague withdrawal terms. Read them: when can the bonus be withdrawn, and does it count as margin?
- Leverage of 1:1000 or more sold as a feature. European regulators cap gold at 1:20 for retail clients.
- A licence you cannot find on the regulator's register, or one listed under a different name or website.
In our region
- Jordan: dealing on foreign exchanges, or brokering such deals for others, is restricted to banks and financial services companies licensed by the Jordan Securities Commission.
- UAE: the Securities and Commodities Authority became the Capital Market Authority on 1 January 2026. The financial free zones keep their own regulators: the DFSA in the DIFC, and the FSRA in ADGM.
- Palestine: the Capital Market Authority publishes an annual list of licensed entities, and warned in 2024 against unlicensed trading platforms. Check the list before dealing with any firm operating locally.
Quick checklist before you deposit
| Question | Where to find the answer |
|---|---|
| Is there a licence, and is it for brokerage rather than promotion only? | The regulator's register |
| Which entity opens my account, and in which country? | The client agreement |
| Are funds segregated? Is there negative balance protection? | The risk disclosure document |
| What does one lot cost me, round trip? | Account types page + a demo account |
| How far does the spread widen during news? | Watch it yourself on a major release |
| How long does a withdrawal take, and at what fee? | A small test withdrawal |
| What is the minimum trade size, and at what level are positions closed? | Contract specifications |
Disclosure: Consultya may have commercial relationships with brokers. That is why this guide recommends no specific broker — and why you should apply the same criteria to any broker we mention too.