Why did Masterforex-V Academy start its own rating of Forex brokers?

(Europe’s best Forex-training project) stared its own rating of Forex brokers. Why does the Academy need it for? The project has always been unbiased, especially when it comes to evaluating various Forex brokers. So, how objective can the rating be in terms of reflecting the real situation in the market of broking services?

Let’s try to evaluate a Forex broker in the language of numbers in order to be more objective. For some reason until now nobody has managed to objectively evaluate a broker, the founder of Masterforex-V Internet Academy explained. The best they can to do is to arrange some internet voting and to base the rating on the voting results. You don’t want to trust these figures as the anonymous users’ sympathies are not enough to make an objective image. Moreover, the results can be changed by the site administration.

Market Leader: How many evaluation criteria did introduced?

Masterforex-V: In order to properly evaluate Forex brokers we introduced over 15 criteria. Each of them is objective and independent from the others. All of them can be expressed in numbers. For more details see “Calculating the rating of Forex brokers by Masterforex-V”.

For example, these are some of the criteria we consider:

1.       The year when a certain broking company was founded. Any reasonable trader understands that the more time the broker is in the business the more it can be trusted. And vice versa. So, in our rating any young broking company gets 5 points for each year of work.

2.       The authorities controlling and regulating a certain broker’s activity. The US and UK financial regulators are of the highest priority. As a result, if the broking company in question is regulated by :

·         KROUFR – it gets only 3 points

·         FSFR – 20 points

·         SEC, CFTC, NFA, SIPC – 70 points

A broker automatically gets 70 points when it gets the license from SEC or NFA.

3.       Spread and commission. The best trading conditions get more rating points. The tighter the spread for major currency pairs is the more points the broker gets. For example, for EURUSD 3-point spread = 0 rating points, 2pts = 5 rating pts, 0-1pts = 10 rating pts.

4.       The analytics and PR campaigns in the media. A serious broker is constantly written about, which makes it popular and helps to attract new clients.

Market Leader: Do you mean that you apply anticipatory approach towards evaluating Forex brokers?

Masterforex-V: Yes, we do. We use objective criteria (the date of foundation, the number of offices, licenses, spread, commission etc.) together with anticipatory indicators like PR and advertisement campaigns, including 100-point fines if a certain broker fails to pay the earned profit to a student of and 1-point fines for any complaint about the quality of the services the broker provides. We arrange regular voting. The voters are divided into 3 groups: experts, their students and other internet participants, including the personnel of numerous broking companies. The results are combined into a table, with daily updates.

Can any Forex broker rating be more objective than a broker’s license?

Masterforex-V: it depends on what kind of rating it is. If it is just an ordinary survey for users on some website, then of course it cannot be more objective.

 Market Leader: Do you mean a license is not enough to trust a certain broker?

Masterforex-V: Of course it is not enough. Just remember those brokers that had all the licenses… and went broke. For example, the Swiss broker called Refco or any bankrupt bank in Russia, USA, UK. Didn’t they have the required licenses? Of course they had. A license is an essential requirement but not the only one necessary to trust a broker. That is why in our rating we use 15 criteria.

Market Leader: You have rather considerable fines in the rating.

Masterforex-V: I think the fines are quite reasonable. When unfair brokers like Broco, forex-mmcis, Forex Euroclub do not pay out the earned profit to our students we fine them. When hundreds of clients have complaints about some brokers, should we react by giving away at least 1 point for each complaint? Of course we should. To my mind, it is a good anticipatory indicator showing that such brokers shouldn’t be trusted.

Market Leader: Where can all comers vote for/against brokers to influence your rating?

Masterforex-V: Just visit our forum for traders and investors

Survey:

Did succeed in developing a truly objective rating system, which makes it possible to tell fair Forex brokers from unfair ones?

·         Well, it is far from being ideal but the idea is good (15 criteria)

·         No, they didn’t. I’d rather trust a license than some ratings