Regulation first, everything else second
Tight spreads at an unregulated venue are not a bargain, they are a loan you have made to a company with no obligation to repay it. Start with the regulator, verify the licence number on the regulator's own register rather than the broker's website, and confirm whether client funds are segregated.
It is also worth understanding which entity you are actually contracting with. Large brokers operate multiple entities under different regulators, and the protections attached to the one you sign up to can differ enormously from the one featured in the advertising.
Execution model changes your results
- —Market execution fills at the available price. Expect slippage in both directions and no requotes.
- —Instant execution offers a requested price and may requote. Automation handles requotes badly.
- —A-book routing passes your order to liquidity providers; B-book keeps it internal. Most brokers do both, selectively.
- —Ask directly how automated strategies are routed. The answer, or the refusal to answer, is informative.
Read the contract specification
Contract size, minimum lot, stop level and margin requirement for gold vary meaningfully between brokers, and every one of those variables changes how a strategy behaves. A broker enforcing a wide minimum stop distance can make a tight-stop system literally unrunnable, regardless of how good the logic is.
Automation policy and the boring questions
Some brokers permit automation in principle and restrict it in the small print — banning specific order patterns, penalising high-frequency modification, or reserving the right to void trades placed during 'abnormal' conditions. Ask before funding, in writing, and keep the reply.
Regulation, segregation and what happens on a bad day
The purpose of due diligence on a broker is not to find the tightest spread; it is to establish what happens to your balance if the firm has a genuinely bad day. Segregated client funds, a credible regulator with a compensation scheme, and a parent entity that publishes accounts are worth more than a fractional pricing advantage that only shows up in quiet markets.
The entity you sign with is the one that matters
Large brokers operate multiple legal entities under different regulators, and the one that accepts your application may not be the well-capitalised one named in the marketing. Read the client agreement to establish which entity holds the account, which regulator supervises it and what protection, if any, applies to your balance.
- —Identify the exact legal entity on the account agreement.
- —Confirm the regulator and check the licence number on the regulator's own register.
- —Establish whether client money is segregated and whether compensation exists.
- —Read the terms covering execution during abnormal market conditions.
Testing a broker before you trust it with size
Every broker looks identical on a quiet Tuesday. The information you need comes from behaviour during a data release, at rollover, and on the first Friday of the month. Fund a small live account, run the system for four to six weeks, and record how the venue behaves when conditions are genuinely hostile.
A six-week evaluation protocol
- —Weeks one and two: baseline spread and fill quality in normal conditions.
- —Week three: deliberately observe behaviour across two high-impact releases.
- —Week four: test a withdrawal end to end and record how long it takes.
- —Weeks five and six: check whether spreads or rejection rates changed after the account became active.
A broker is a counterparty, not a service. Evaluate them the way you would evaluate anyone holding your money.
Everything discussed here is applied on a public, third-party verified account — updated continuously, losing weeks included.