Picking a ZuluTrade Brokerage?

When picking a ZuluTrade brokerage there are three main things to consider; 

  1. Slippage
  2. Spreads 
  3. Regulation 
Today we are going to look at the different ZuluTrade supported brokerages and compare them on the above criteria. Going with a brokerage which is strong in all three areas is a important aspect of ZuluTrade success. 
 
First off, I am going to look at Slippage and I have undertaken some original research in regard to which ZuluTrade supported brokerage has the lowest slippage rates. To do this I looked at the slippage rates experienced by traders following some of the Top ZuluTrade Signal Providers in the last year. Through my research I discovered that the brokerages with the lowest Slippage where as follows:  
Rank Broker Slippage (Pips) Regulation
1 AAAFx 0.27 HCMC (Greece MiFID)
2 GO Forex 0.43 CySEC (Cyprus MiFID)
3 Weltrade 0.61 Unregulated
4 Gain Australia 0.67 ASIC (Australia)
5 Gain UK 0.7 FSA (UK MiFID)
6 COLMEX 0.73 CySEC (Cyprus MiFID)
7 FX Primus 0.83 FSC
8 FXDD MT 0.88 MFSA (Malta MiFID)
9 FXCM UK 0.94 FSA (UK MiFID)
10 Xemarkets 0.95 CySEC (Cyprus MiFID)
11 FX SOL UK 0.98 FSA (UK MiFID)
As you can see their were a total of 11 brokerages whose average slippage was under a Pip. It’s my opinion that you would want to be operating with a brokerage whose slippage on average was under a Pip, anything more would start to eat into your potential profits. AAAFx which is owned and fully integrated with the ZuluTrade platform unsurprisingly offers the lowest rate of slippage. The fact that there are a number of European regulated brokerages on the list means that there is little reason to use an unregulated offshore brokerage. Every brokerage bar two who had average slippage rates below 1 Pip, were MiFID regulated ensuring a minimum standard of regulation and some limited financial compensation should the organisation go belly up.  

The second important thing to consider when picking a brokerage to operate with is to consider whether the said brokerage has competitive spreads. The wider the spread the more your potential profits will be eaten into. So the next step is to compare spreads between the brokerages which have the best execution with the ZuluTrade platform. The following table shows the average spreads offered on the four major currency pairings, while the spreads on more exotic currency pairings will likely have greater variation the majority of trading on ZuluTrade is in the major currency pairings.  

Rank Broker Slippage (Pips) EUR/USD USD/CHF GBP/USD USD/JPY Slippage & Spread Avg
1 Gain Australia 0.67 1.2 2 1.5 1.2 2.145
2 AAAFx 0.27 1.9 1.9 1.9 1.9 2.17
3 Gain UK 0.7 1.6 1.5 1.9 1.3 2.275
4 Weltrade 0.61 2 3 3 2 3.11
5 Xemarkets 0.95 1.9 2.6 2.5 2.3 3.275
6 FX Primus 0.83 2 3 3 2 3.33
7 FXCM UK 0.94 2.5 2.5 2.6 2.3 3.415
8 GO Forex 0.43 3 3 3 3 3.43
9 COLMEX 0.73 3 3 3 3 3.73
10 FXDD MT 0.88 1.8 3.7 4 2.5 3.88
11 FX SOL UK 0.98 3 4 4 3 4.48


As you can see when one takes Spreads into account, it is actually Gain Australia which offers the best service for those trading with ZuluTrade accounts closely followed by AAAFx and Gain UK. When you take into account Spreads companies such COLMEX, FXDD and FX Sol UK get left far behind. There seem to be about 8 different options which offer you a total trade cost of lower than 3.5 pips which is the most your going to want to pay for opening a trading positions. 

Now we get to the final important category. Regulation is important for two reasons, one proper regulation protects you against the possibility of the brokerage collapsing. This is something that becomes very important when an individual will be trading a large amount of capital. For instance a trader who is with a MiFID regulated brokerage will have their deposits protected up to at least 20,000 Euros if they brokerage was to collapse. While MiFID ensures a minimum standard of regulation, the strength of the regulation does vary body to body. For instance CySEC and HCMC are considered to be some of the weaker MiFID regulated bodies, this being said I would be happy with doing business with any of the MiFID regulated brokerages on the list. Those in Australia would probably be best to go with Forex.com Australia (aka Gain Australia) who are regulated by the very competent ASIC. The only two brokerages on the list I would avoid are FSC regulated FX Primus and unregulated Weltrade while I know of customers who are happy with both, the lack of serious regulation in both cases would worry me deeply. 

So what brokerages would I recommend for those who want to trade on ZuluTrade. Well that really depends on what region you live in. 

Europe: xemarkets, AAAFx, Forex.com (UK) 
Australia: Forex.com (AUS)

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