FOREX RATING FORMULA v.4.0.

A NEW WAY TO RATE FINANCIAL SERVICES

Introduction to TradingCenter’s Rating Formula v.4.0

“The Search for an Objective Forex Broker Rating System - v.4.0 is the Most Complete Formula Ever Created”

The Problem and the Solution

Since the rise of the internet, most financial ratings have been based on user reviews. Unfortunately, more than half of these reviews are fake. That’s because financial companies have strong reasons to pay outsiders to post positive reviews about themselves or negative ones about competitors. You can often spot this manipulation by how extreme the ratings are—usually a perfect 5/5 or a terrible 0/5. If you're highly experienced with Forex reviews, you might be able to tell which ones are real. But most of the time, the total rating you see online is just the average of thousands of individual scores, and checking them one by one is nearly impossible—and certainly unreliable.

With the growing use of AI-generated content, spotting real user reviews will become even harder. Positive reviews bring in more customers, giving companies a big reason to game the system. While many companies avoid fake ratings, we have no way of knowing for sure which ones are trustworthy. Even good companies can have their ratings manipulated by rivals. When you consider all of this, it's clear that user ratings in financial services are not only unreliable today—they're likely to get worse.

TradingCenter.org created a series of rating formulas to fix this issue by offering an objective way to rate financial services. This method can be adjusted to suit different types of traders, whether they’re beginners, intermediate, or advanced. The concept is simple, but it's built on a mathematical model using four key factors. Each one reflects an essential trader need:
-1- Safety of Funds | -2- Low-Cost Transactions | -3- Wide Variety of Trading Options | -4- Technological Efficiency

Mission: “Be Safe, Pay Less, Use Top-Grade Trading Technology”

The History of Broker Rating Formulas

The first, second, and fourth versions of the Rating Formula are used for evaluating Forex Brokers. Versions 3.0 and 3.5 are designed for Binary Options Brokers.

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The Core Rating Mechanism of Rating Formula v.4.0.

The History of Broker Rating Formulas

The first, second, and fourth versions of the Rating Formula are used for evaluating Forex Brokers. Versions 3.0 and 3.5 are designed for Binary Options Brokers.

The Core Mechanism of Rating Formula v.4.0

TradingCenter’s Rating Formula is built around what makes a broker the best fit for the average trader. Each factor is given a specific weight, and the total rating always adds up to 100%:

(1) Safety of Funds (26%) – Includes factors like regulatory status, years in business, and country of headquarters.

(2) Transactional Cost (28%) – Covers trading commissions, spreads on major pairs, maintenance fees, and other costs.

(3) Variety of Trading Options (26%) – Considers the range of assets, funding methods, rebate programs, leverage, and more.

(4) Technological Efficiency (20%) – Measures platform quality, mobile trading features, MT4 support, automation, slippage, and related tools.

Here’s a breakdown of all four factors, which together form a complete 100% rating.

📌 “In Search of the Ideal Forex Broker”

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-1- Safety of Funds, Weight 26%

All financial companies—investment firms, venture capital groups, brokers, and dealers—tend to take on more risk than they can realistically handle. This usually happens when the potential profit from a decision appears greater than the risk involved. Historically, financial firms often accept high levels of risk, which makes them more likely to fail. This pattern played a key role in the 2007–2008 financial crisis in the US and later affected markets around the world.

But as a trader, you're not concerned with your broker’s profit—you care about how much risk they’re taking on. That’s because risk directly affects the safety of your trading funds. Companies that manage risk carefully and protect client funds are rated more favorably. Version v.4.0 considers this, along with other key factors like regulation, location of headquarters, and years in business. It also adds new criteria, such as whether the broker uses segregated or bank accounts to protect client funds.

Table: Safety of Funds Analysis

1. SAFETY OF FUNDS	WEIGHING ANALYSIS	MAXIMUM WEIGHT
1.1 Regulatory Bodies	Lower-to-Higher Rating Weight. FSC (BVI) = 1.0%, | CYSEC = 3.0%, | FFMS = 3.0%, | RAFMM = 3.0%, | CBI = 4.0%, | ASIC = 4.0%, | FSC (NZ) = 4.0%, | FSA (UK) = 6.0%, | BAFIN = 6.0%, | NFA = 6.0%, | CFTC = 6.0%, | FINMA = 8.0% | and MiFID = +4.0%	12.0%
1.2 Headquarters Base	General Offshore = 0%, Cyprus, Israel, Latvia = 2.0%, Ireland, Spain, Italy, Belgium = 3%, Canada, Australia, New Zealand = 4.0%, USA, UK, Germany, Scandinavian Countries, France, Switzerland = 5.0%	5.0%
1.3 Foundation (Years in the market)	0-1 Years = 0 %, 2-5 Years = 2.0 %, 5-10 Years = 4.0 %, 10+ Years = 5.0 %	5.0%
1.4 Segregated / Bank Accounts	Yes = 2.0 %, No = 0.0 %	2.0%
1.5 Web Ratings (Used for differentiating results)	ForexPeaceArmy Rating = 1.0 %, | EarnForex Rating = 1.0 %	2.0%
TOTAL=		26.0%
1.6 ADJUSTMENTS	Adjustment of Factor-1 by keeping the Overall Rating at a maximum of 26 %
1.6.1 Size Factor	More than 1 Million Active Traders = +1.0 %, No = o%	+1.0%

FACTOR-1 EXPLANATION:

1.1 Regulation (12%) – Rating Method: Accumulation

Strong regulation by a trusted authority helps reduce the risk of a broker acting unfairly or irresponsibly. In many developing countries, market regulators closely monitor Forex brokers and impose heavy penalties if they operate in a risky or harmful way. On the other hand, regulation by offshore authorities is generally less reliable. Regulation is critical for all trading styles, which is why it holds a 12% weight in the formula.

1.2 Headquarters Base (5%) – Rating Method: Selection

The country where a broker is based greatly affects the strength and reliability of its financial position. Supervising authorities in more stable countries apply stricter rules and higher penalties, encouraging brokers to operate responsibly and protect client funds. When rating headquarters locations, we also consider the overall economic health of the country.

1.3 Years in the Market (5%) – Rating Method: Selection

A broker with many years of experience has likely proven its business model and shown the ability to handle financial risk over time. In finance, longevity matters.

1.4 Segregated Bank Accounts (2%) – Rating Method: Selection

Brokers that keep client funds in segregated bank accounts are viewed more favorably. This practice adds a layer of transparency, especially when a high number of transactions are involved.

1.5 Web Ratings (2%) – Rating Method: Accumulation

This factor helps fine-tune the overall rating. Two user-based platforms are used: ForexPeaceArmy and EarnForex. Because user ratings can be manipulated, this factor is given a small weight of just 2%.

Tip: “Differentiation is Power when your Industry is the Financials”

1.6 Adjustments

Adjustments apply to all four factors in Rating Formula v.4.0. Even after adjustments, the total weight of Factor-1 remains capped at 26%.

1.6.1 Company Size (+1%) – Rating Method: Adjustment

In Factor-1, one key adjustment is based on broker size. Larger brokers are often more exposed to risk, but those with more than 1 million active clients are rated more positively due to their established market presence.

Note: In future versions, we may include direct balance sheet data from Forex brokers. This would involve metrics like yearly profitability and debt exposure relative to revenue. For now, we focus only on aspects of fund safety for which reliable data is available.

 

RATING FACTOR-1 – EXAMPLES

i) A Forex broker based in the UK, founded in 2000, and regulated by both the FSA and BaFIN, receives a core score of 22.0%. If the broker also offers segregated bank accounts and has web ratings worth 1%, it earns an additional 3.0%, for a Grand Total of 25.0%.

ii) A Forex broker based in the British Virgin Islands, founded in 2010, and regulated by the FSC (BVI), receives a core score of 6.0%. If this broker does not offer segregated accounts but has web ratings worth 1%, it ends up with a Grand Total of 7.0%.

The difference between these two brokers is significant—18.0%—and reflects the much higher risk you would take by choosing broker (ii).

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-2- Trading Cost & Similar, Weight 28%

Table: Factor Analysis

2. TRADING COST & SIMILAR	WEIGHING ANALYSIS	MAXIMUM WEIGHT
2.1 Typical / Minimum Spread on EURUSD	EUR/USD Spread (Smaller or Equal): < 0.3 pip = 8.0%, | < 0.4 pip = 7.5%, | < 0.5 pip = 7.0%, | < 0.6 pip = 6.5% | < 0.7 pip = 6.0%, | < 0.8 pip = 5.5%, | < 1.0 pip = 5.0%, | < 1.25 pip = 4.5, | < 1.5 pip = 4.0%, | < 1.75 pip = 3.5%, | > 2.0 pip = 3.0%, | < 2.5 pip = 2.0%, | < 3.0 pip = 1.0%, Filter: If the trading spread is more than 5 pips, then the 2.1 & 2.4 ratings are forced to zero {0} value	8.0%
2.2 Typical / Minimum Spread on GBPUSD	GBP/USD Spread (Smaller or Equal): < 1.0 pip = 5.0%, | <1.25 pip = 4.0%, | < 1.5 pip = 3.0%, | < 1.75 pip = 2.5%, | < 2 pip = 2.0%, | < 2.25 pip = 1.5%, | < 2.5 pip = 1.0%	5.0%
2.3 Typical / Minimum Spread on USDJPY	USD/JPY Spread (Smaller or Equal): < 1.0 pip = 4.0%, | <1.25 pip = 3.5%, | < 1.5 pip = 3.0%, | <1.75 pip = 2.5%, | < 2 pip = 2.0%, | < 2.5 pip = 1.0%	4.0%
2.4 Trading Commissions Charged	Commissions (Smaller or Equal) No Commissions = 7% | Commissions < $5 / lot = 3% | Commissions < $8 / lot = 1% | Higher Commissions = 0% Filter: Higher commissions than $20 / lot will force 2.1, 2.2, 2.3 & 2.4 ratings to zero (0) value	7.0%
2.5 Deposit / Withdrawal Commissions	No = 2.0 %, | Yes = 0 %, | 1-Free / Month = 0.5 %	2.0%
2.6 Maintenance / Inactive Account Fees	No = 2.0 %, | Yes = 0 %	2.0%
	TOTAL=	28.0%
2.7 ADJUSTMENTS	Adjustment of Factor-2 by keeping the Overall Rating at a maximum of 28.0%
2.7.1 Execution	ECN = +2.0 % / STP = +1.5 % | Market Makers = +0.0%	+2.0%
2.7.2 SWAP Charges	Future Versions

FACTOR-2 EXPLANATION:

2.1 – 2.2 – 2.3 Typical / Minimum Spread on EUR/USD, GBP/USD, and USD/JPY (17%) – Rating Method: Selection

Trading cost is crucial for all trading styles. To rate the spread size, we use the three most popular currency pairs: EUR/USD, GBP/USD, and USD/JPY. These pairs offer the highest market liquidity and the best trading terms. If a broker has high spreads on these pairs, they are likely expensive across their entire asset offering. To keep ratings accurate and consistent, we prefer using fixed spreads without commissions—if and when those are available from brokers.

Filter: A filter has been added to 2.1

If the trading spread exceeds 5.0 pips, then rating 2.2 is automatically set to zero (0). This is because extremely high spreads cancel out the benefit of commission-free trading.

2.4 Commissions Charged (7%) – Rating Method: Selection

Some brokers charge trading commissions; others do not. Brokers with low commissions are rated more favorably. When assessing commissions, we always use the same account type that was used to evaluate spreads in 2.1, 2.2, and 2.3.

Filter: A filter has been added to 2.4

If trading commissions exceed $20 per lot, then ratings 2.1, 2.2, and 2.3 are also forced to zero (0). That’s because very high commissions cancel out the benefit of low or even zero spreads a broker might offer.

2.5 Deposit / Withdrawal Fees and Commissions (2%) – Rating Method: Selection

Deposit and withdrawal fees reduce your available trading capital, which is why they are viewed as a negative. Brokers that charge these are rated lower.

2.6 Maintenance / Inactive Account Fees (2%) – Rating Method: Selection

Some brokers charge maintenance fees or fees on inactive accounts. These are extra costs for the trader and are therefore rated unfavorably.

2.7 Adjustments

2.7.1 Execution (+2%) – Rating Method: Adjustment

The execution model a broker uses affects both slippage and spread size. ECN brokers typically offer the best trading conditions, though STP brokers can also be competitive.

2.7.2 SWAP Values

The level of SWAP charges mainly affects swing and position traders. This factor is difficult to measure accurately, so it will be included in future versions of the rating formula.

 

RATING FACTOR-2 – EXAMPLES

i) An ECN Forex broker offering spreads of 2 pips on EUR/USD, 3 pips on GBP/USD, and 3 pips on USD/JPY, without charging any commissions or fees, receives a 16.0% rating.

ii) A Market Maker Forex company offering the same spreads (2 pips on EUR/USD, 3 pips on GBP/USD, and 3 pips on USD/JPY) but charging high trading commissions gets only 3.0%. If this broker charges withdrawal fees but no maintenance fees, it earns an additional 2.0% rating.
Grand Total = 5.0%.

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-3- Trading Options, Weight 26%

Table: Trading Options

3. TRADING OPTIONS	WEIGHING ANALYSIS	MAXIMUM WEIGHT
3.1 Available Number of Forex Assets	45+ Currency Pairs = 8.0%, | 40+ Currency Pairs = 7.0%, | 35+ Currency Pairs = 6.0%, | 30+ Currency Pairs = 5.0%, | 25+ Currency Pairs = 4.0%, | 20+ Currency Pairs = 3.0%, | 15+ Currency Pairs = 2.0%, | 10+ Currency Pairs = 1.0%, | Less than 10 pairs = 0%	8.0%
3.2 CFD Trading / Spot Metals	CFD Trading = 2.0 % | Only Spot = 1.0 % | Nothing = 0%	2.0%
3.3 Demo / Practice Account	Yes = 2.0 %, No = 0.0 %	2.0%
3.4 Leverage	Leverage Rate (Higher or Equal): >100:1 = 2.0%, | > 75:1 =1.5%, >50:1 = 1.0%	2.0%
3.5 Bonus / Rebate	■ Bonus (Higher or Equal): >50% = 6%, | >40% = 5%, | >30% = 4%, | >20% = 3%, | >15% = 2%, | >10% = 1% ■ Rebate (Higher or Equal): >30% = 6%, | >25% = 5%, | >20% = 4%, | >15% = 3%, | >10% = 2%, | >5% = 1.0%	6.0%
3.6 Minimum Deposit	(Smaller or Equal): Min Deposit < $500 = +1%, | Min Deposit < $1,000 = +0.5%	1.0%
3.7 Deposit Methods	For each deposit method available = 0,5%, max = 5 methods	2.5%
3.8 Withdrawal Methods	For each withdrawal method available = 0,5%, max = 5 methods	2.5%
	TOTAL=	26.0%
3.9 ADJUSTMENTS	Adjustment of Factor-3 by keeping the Overall Rating at a maximum of 26.0%
3.9.1 More than 100 Currency pairs	Yes = 1.0 % / No = 0%	+1.0%
3.9.2 Interest on Deposited Funds	Yes = 0.50 %, No = 0%	+0.50%
3.9.3 Trading Competitions / Championships	Yes = 0.25 % / No = 0%	+0.25%

 

FACTOR-3 EXPLANATION:

3.1 Available Number of Currency Pairs (8%) – Rating Method: Selection

The more currency pairs a broker offers, the greater the opportunities traders have to find profitable trades. This applies to all trading styles.

3.2 CFD and Spot Metals Trading (2%) – Rating Method: Selection

A wider variety of trading assets, like CFDs and spot metals, shows that a broker is expanding its services to meet more customer needs.

3.3 Demo / Practice Account (2%) – Rating Method: Selection

Demo accounts allow traders to practice and make informed decisions without risking real money. Every reputable Forex broker should offer a demo account.

3.4 Leverage (2%) – Rating Method: Selection

Higher leverage gives traders more buying power, which is why it’s an important factor. Most brokers offering up to 100:1 leverage are rated best. Leverage beyond that carries higher risk and is generally discouraged.

3.5 Bonus / Rebate (6%) – Rating Method: Selection

Higher bonuses or rebates increase the trader’s available funds. Both are rated equally, but professional traders tend to prefer rebates.

3.6 Minimum Deposit (1%) – Rating Method: Selection

A lower minimum deposit makes it easier for traders to try out a broker with real money.

3.7 Number of Deposit Methods (2.5%) – Rating Method: Accumulation

The more deposit methods a broker offers, the better it fits different traders’ needs. This saves time and adds convenience.

3.8 Number of Withdrawal Methods (2.5%) – Rating Method: Accumulation

Having many withdrawal options is just as important as deposit options.

3.9 Adjustments

3.9.1 More than 100 Currency Pairs (+1%) – Rating Method: Adjustment

Brokers offering over 100 currency pairs are rated more favorably, though only a few can provide this many.

3.9.2 Interest on Deposited Funds (+0.50%) – Rating Method: Adjustment

This is a valuable feature but is only available from a small number of brokers.

3.9.3 Existence of Trading Competitions / Championships (+0.25%) – Rating Method: Adjustment

Trading competitions, real or demo, offer chances to earn prizes, but since few traders join them, this factor has a small rating weight (+0.25%).

 

RATING FACTOR-3 – EXAMPLES

i) A Forex broker offering 50 currency pairs, plus CFD trading and a demo account, receives 12%. If this broker provides leverage of 50:1 and a 30% deposit bonus, it earns an additional 5%. With 4 deposit and 4 withdrawal methods and a minimum deposit of $1,500, it gains another 4%. According to the adjustments, if the broker offers a trading championship but no interest on funds, it gets an extra 0.25%.
Grand Total rating: 21.25%

ii) A Forex broker offering 12 currency pairs, without CFD trading but with a demo account, receives 3%. If it provides leverage of 100:1 and a 40% deposit bonus, it earns 7% more. With 2 deposit and 2 withdrawal methods and a minimum deposit of $100, it receives an additional 3%. This broker offers no contests and no interest on funds, so no extra rating is added.
Grand Total rating: 13.00%

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-4- Technological Efficiency & Innovation, Weight 20%

Having a technologically efficient trading platform is essential for online Forex trading. Good technology makes trading smoother and more profitable, especially for intraday traders. Additionally, a broker who invests in advanced technology shows they have a long-term vision and focus on serving their customers well.

Table: Technological Efficiency & Innovation

4. TECHNOLOGY	WEIGHING ANALYSIS	MAXIMUM WEIGHT
4.1 Number of Available Platforms	Each Supported Platform = 1.0%, max = 5 platforms	5.0%
4.2 Slippage	Slippage on Execution (Smaller or Equal): Slippage < 0.5 pip = 4.0% | Slippage < 0.75 pip = 3.5% | Slippage < 1 pip = 3.0% | Slippage < 1.25 pip = 2.5% | Slippage < 1.5 pip = 2.0% | Slippage < 1.75 pip = 1.5% | Slippage < 2.0 pip = 1.0%	4.0%
4.3 Automated Trading (Expert Advisors)	Yes = 2.0 % / No = 0 %	2.0%
4.4 MT4 / MT5 Availability	Yes = 2.0 % / No = 0 %	2.0%
4.5 Mobile Trading	Each Supported Device = 0.50 % (iPhone, iPad, Android, Windows Mobile, Blackberry), max = 4 devices * Special HTML5 Apps that are covering all devices = 2.0 %	2.0%
4.6 Scalping / Hedging	Yes both = 1.0 % | Yes only Hedging or Scalping = 0.5% | No = 0 %	1.0%
4.7 Customer Service	24/7 = 1.0 %, | 24/6 = 0.5 %, | 24/5 = 0 %, | email = 1.0%, | Phone = 1.0 %. | Live Chat = 1.0 %, | Skype = 0.5 %, | Call-Back = 0.5 %	4.0%
	TOTAL=	20.0%
4.8 ADJUSTMENTS	Adjustment of Factor-4 by keeping the Overall Rating at maximum of 20.0 %
4.8.1 PAMM Managed Accounts	PAMM = 0.5 % / Simple Managed = 0.25%, No = 0 %	+0.5%
4.8.2 API Trading	Yes = 0.5 % / No = 0 %	+0.5%

FACTOR-4 EXPLANATION:

4.1 Number of Available Platforms (5%) – Rating Method: Accumulation

Offering a variety of trading platforms gives traders more choices.

4.2 Slippage (4%) – Rating Method: Selection

Execution delays and re-quotes are major problems, especially for short-term traders. Position and swing traders can also be affected since entering trades often happens right after important news. At these times, high slippage and delays can cause traders to pay extra costs.

4.3 Automated Trading (Expert Advisors) (2%) – Rating Method: Selection

The ability to use Expert Advisors, like ZuluTrade and Tradency’s Mirror Trader, is an important feature.

4.4 Mobile Trading (2%) – Rating Method: Accumulation

Mobile trading isn’t just a trend — it’s the future of trading.

4.5 MT4 / MT5 Availability (1%) – Rating Method: Selection

MetaTrader platforms are the industry standard in Forex trading.

4.6 Scalping and Hedging (1%) – Rating Method: Selection

Scalping is important to only a few traders, so this factor has a low weight.

4.7 Customer Service (4%) – Rating Method: Accumulation

High-quality customer service is essential for online trading. We rate brokers higher if they offer 24/6 or 24/7 support and provide multiple contact options like email, phone, call-back, Skype, and live chat.

4.8 Adjustments

4.8.1 PAMM / Managed Accounts (0.5%) – Rating Method: Adjustment

Managed accounts are popular today, so we rate brokers offering PAMM accounts up to +0.5% and simple managed accounts +0.25%.

4.8.2 API Trading (0.5%) – Rating Method: Adjustment

Offering API trading shows a broker’s commitment to advanced trading technology.

 

RATING FACTOR-4 – EXAMPLES

i) A Forex broker offering 5 trading platforms, including MT4, with 1.5 pip slippage, full mobile trading, plus automated trading and scalping/hedging, receives 14.0%. If this broker also provides phone, email, 24/6 support, and live chat, it gains an extra 3.5%. Finally, if it offers PAMM accounts but no API trading, it earns +1%.
Grand Total Rating: 18.5%

ii) A Forex broker offering 2 trading platforms, including MT4, with 2.0 pip slippage, supports 2 mobile devices, but does not allow automated trading, scalping, or hedging, receives 6.0%. If this broker provides email, 24/5 support, phone, and live chat, it gets an extra 3.0%. If it offers simple managed accounts but no API trading, it receives an additional +1%.
Grand Total Rating: 10.0%

If we add the results from Rating Factors 1, 2, 3, and 4, we can calculate the overall broker rating.

FORMULA v.4.0 TOTAL RATING

Factor-1: Safety of Trading Funds (26.0%) +

Factor-2: Overall Trading Cost (28.0%) +

Factor-3: Available Trading Options (26.0%) +

Factor-4: Technological Efficiency (20.0%)

= 100%

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Forex Formula 4 Rating Results and Comparisons

The first set of rating results using the Forex Broker Formula v.4 is now published on the affiliated website FxPros.net.

FX BROKER	INDIVIDUAL RATING FACTOR					3 TRADING LEVEL			FULL RATING
	Total Rating	Safety	Cost	Options	Technology	Beginners	Advanced	FxPros
AvaTrade	76.47%	84.5%	58.9%	92.3%	70.0%	70.1%	66.7%	60.4%	►AvaTrade
Dukascopy Europe	76.25%	74.0%	83.9%	62.5%	86.3%	74.6%	78.1%	79.7%	►Dukascopy Europe
Plus500	63.92%	68.9%	58.9%	88.5%	32.5%	62.6%	52.4%	43.6%	►Plus500
eToro	59.71%	84.5%	41.1%	54.8%	60.0%	60.4%	55.4%	49.5%	►eToro

 

Final Words Toward the Future

The concept and development of this series of Rating Formulas are unique, but there’s still a long way to go before they are fully optimized. Looking ahead—and considering the growing challenge of web robots—this method of rating financial companies has the potential to become an industry standard. It helps traders make better choices and contributes to a SAFER trading environment for everyone, including the reputable brokerage firms that reject the dishonest “game” of fake user ratings.

🔗 More: » Rating Formula 2 | Rating Formula 5.0

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■ Giorgos Protonotarios, Financial Analyst –Web Projects

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