Guaranteed stop-loss brokers only operate in a market-making model catering to beginners, but are the additional costs worth it, or is it a beginner-trap selling pseudo-security when trading?
My guaranteed stop-loss brokers listing introduces guaranteed stop-loss orders, in order to help traders decide if they should use them.
FP Markets
In Summary ECN trading with leverage up to 1:500fpmarkets is an ASIC-regulated Australian brokerage which launched in 2005. For most traders, the unique selling point of this broker is in the extremely wide range of tradable assets offered, providing the opportunity to trade over ten thousand individual stocks and shares including publicly quoted Hong Kong and Australian companies. Ffpmarkets also offers 60 Forex pairs and crosses, 11 equity indices, the major commodities, and 5 cryptocurrencies including Bitcoin. fpmarkets offers an unusual hybrid ECN/STP execution model, meaning their clients can choose between ECN style of execution giving a very high level of speed, and a “straight through processing” execution style which allows for more “natural” spreads.
Pros & Cons
- Choice of trading platforms and auxiliary trading tools
- Very competitive cost structure and excellent asset selection
- Low minimum deposit requirement and leverage of up to 1:500
- Well-regulated and trustworthy
- Availability of Iress geographically restricted
Eightcap
In Summary 1:500 maximum leverage and cutting-edge trading toolsI rate Eightcap among the best guaranteed stop-loss brokers. MT5 traders benefit from the FlashTrader plugin, while cryptocurrency traders get Crypto Crusher. The AI-powered economic calendar supports news traders, and algorithmic traders get 24/5 low-latency Forex trading via VPS hosting.
Eightcap offers competitive leverage with negative balance protection, deep liquidity pools, fast order execution, and a well-balanced asset selection. Social traders can connect with 50M+ peers at TradingView. Commission-based trading fees feature raw spreads from 0.0 pips for a commission of $7.00 per 1.0 round lot.
Pros & Cons
- Low minimum deposit and high leverage of up to 1:500
- Competitive cost structure
- Excellent technology infrastructure and seasoned management team
- Daily research and quality educational content
- Limited leverage in some areas
XM
In Summary Exception range of assets + negative balance protectionXM offers the industry-leading algorithmic trading platforms MT4 and MT5, plus its user-friendly mobile app, XM App, which includes TradingView charting. The maximum leverage for most international traders is 1:1000 with negative balance protection. The well-balanced asset selection comprises 1,400+ assets across Forex, cryptocurrencies, commodities, indices, stocks, and thematic indices. The five thematic indices cover cryptocurrencies, AI, electric vehicles, blockchain, and Chinese internet companies. Therefore, I rank XM among the best Forex brokers for mobile traders.
With over 13.5 billion executed trades on XM, the strict no-re-quotes and no virtual dealer plug-in, combined with 99.4% of all trade executions in less than one second, confirm a trusted infrastructure. XM has also paid over $6.4 billion in trader bonuses. The in-house XM copy trading service pays up to 50% to strategy providers, who have already received $15M+ in payments. XM also hosts trading competitions with $100,000 in rewards every month.
Pros & Cons
- 100% execution rate with no orders rejected
- Quality trading infrastructure with fast order processing
- In-house XM copy trading with 18K+ strategies and 700K+ traders
- High trading fees on the XM Standard Account
BlackBull Markets
In Summary 1:500 maximum leverage with ultra-low trading fees and deep liquidityBlackBull Markets offers copy traders its in-house BlackBull Markets CopyTrader, besides the embedded copy trading services in MT4, MT5, and cTrader. Traders can also diversify via ZuluTrade and Myfxbook Autotrade. BlackBull Markets connects social traders to TradingView, where they may engage with 50M+ traders to share and discuss trades. It places BlackBull Markets among the guaranteed stop-loss brokers ideal for copy traders.
The competitively priced, commission-free, and commission-based ECN trading accounts set BlackBull Markets apart from most competitors, as trading fees can drop as low as $4.00 per lot. VPS hosting and API trading satisfy advanced trading demands.
Pros & Cons
- ECN/NDD execution model with deep liquidity
- Institution-grade pricing for retail traders via proprietary price aggregation
- ZuluTrade and Myfxbook for social trading
- Leverage of up to 1:500
- Limited deposit options
What Is a Guaranteed Stop-Loss Order?
A stop-loss order is a risk management tool traders can use to determine at which level the trading platform automatically closes a position. Retail traders use it to limit the losses on positions. Advanced traders also use it to lock in profits during volatile times via a trailing stop-loss order or an advanced, custom version.
While a stop-loss order should trigger at the specified level, or extremely close to it, volatile trading periods can cause slippage or price gaps, meaning the broker will honor the stop-loss at the best available price. It could result in massive losses, and while they are rare, they are part of trading.
Guaranteed stop-loss brokers promise execution of a stop-loss at the given price regardless of market conditions but charge a fee for this service. Other conditions and limits also apply.
The Role of Stop-Losses and GSLOs in Trading
Despite its name, a stop-loss order allows traders to limit losses and protect profits. It is an essential risk-management tool that traders use to manage their losses. A stop-loss order will enable traders to specify a price they want to exit a trade, and it is best placed with the order ticket before taking a position.
Volatility can cause slippage and price gaps, magnified in less liquid assets. Guaranteed stop-loss brokers guarantee a stop-loss order, often abbreviated as GSLO, but charge a fee. Guaranteed stop-loss brokers usually impose other conditions, including a minimum distance from the current price, restrictions on which assets qualify for a GSLO, and the maximum duration of a GSLO, which may only apply during intra-day trading sessions.
How to Choose a Forex Broker with Guaranteed Stop-Loss Orders
Choosing guaranteed stop-loss brokers can challenge any trader, as clever marketing campaigns often hide core trading aspects relevant to traders.
Below are my tips on choosing guaranteed stop-loss brokers:
- A clean track record spanning 10+ years with a trader-friendly regulator
- Competitive trading fees with volume-based rebates
- Deep liquidity
- Fast order execution without requotes
- Algorithmic trading support
What to Avoid when Choosing a Forex Broker with Guaranteed Stop-Loss Orders
With 1,500+ brokers vying for traders and their deposits, traders should know that less than 10% offer competitive trading conditions. Therefore, they must know what to avoid.
Before opening trading accounts with guaranteed stop-loss brokers, traders can consider my below criteria to avoid in brokers:
- Unregulated brokers
- Expensive trading fees
- Lack of transparency
- Insistence on scheduling calls, as they usually lead to the trading advice scam
- Promises of excessive profits when using their brokerage
- Unsustainable annual interest payments on cash
Guaranteed Stop Loss Orders - Pros & Cons
Traders should consider the pros and cons of guaranteed stop-loss brokers before paying the extra fee for placing a GSLO.
The Pros of Guaranteed Stop-Loss Orders
- May aid risk mitigation
- Lowers demand for position monitoring
- Reduces emotional stress
The Cons of Guaranteed Stop-Loss Orders
- Adds to trading fees
- Volatility may trigger a GSLO before the price moves in a favorable direction
- Misplacement of GSLO levels
- Not all assets qualify for a GSLO
- Only available in a market maker model
- Order interference by brokers
- Unrealistic trading environment
Bottom Line
Guaranteed stop-loss brokers charge a fee to guarantee a stop-loss order. Traders can use other methods to mitigate risks without accepting higher trading fees associated with a GSLO.
