Broker Comparisons & Ranking Methodology

TheTradingBible.com is a financial education website founded with the sole intent of providing beautiful, simple, reliable and high quality financial information. A big part of this effort lies in educating our audience on how brokers really work and how to differentiate good ones from bad ones as this can be a defining factor in the financial experience of anyone.

What we evaluate

Below you’ll find a table with our carefully chosen categories to evaluate brokers along their respective weights:

Category Weight
Safety 30%
Platforms 20%
Trading Conditions 15%
Fees & Costs 15%
Available Assets 10%
Research Tools 5%
Educational Tools 5%

Please allow us to walk you through our logical reasoning for the weight of each point:

Safety

Safety weighs 30% because it doesn’t matter if a broker has the best platforms in the world, no spreads, no commissions and 50,000 assets. If it’s not safe, it’s the equivalent of a tasty plate of food made with poison. It looks pretty but you can’t eat it.

Platforms, Fees & Trading Conditions

Platforms, fees and trading conditions represent 50% of the weight as here is where a broker's quality will be truly measured for a user. Does a user get the right type of trading orders? Does the user get competitive fees? Great proprietary platforms?

Avaliable Assets

Available assets have a mere weight of 10% for the following reason: If the broker is good (meaning that he has a great safety score, and amazing platforms, fees and trading conditions) then it’s not that relevant that its asset offering is small. For us this means that whatever little they offer, they’re doing it correctly, so any user can end up having 3 brokers if needed to get the perfect conditions for the assets he desires to trade.

Research and Educational Tools

Research and Educational tools are worth together the small figure of 10% (5% each). The reason for this is that we are currently in the year 2021 and TradingView took over the space in terms of research, nobody uses their broker anymore for such purpose.

When it comes to education, online academies, blogs and websites are the ones leading the competition. In reality, you don’t need a broker to teach you how to trade, you need a broker that does exactly what it's meant to do, be a good broker.

Now that you’ve got a good understanding of how we think, let’s discuss a few of our categories to show you how we actually measure them starting by: safety.

TTBTrust - Our brand new safety scoring system

TTB Trust

TTBTrust is our brand new proprietary scoring system to measure how safe a broker is based on the following parameters:

Now, let’s go into a few details about our logic behind TTBTrust.

If a broker is regulated and licensed by BaFin (Germany) and ASIC (Australia) then why do they need a “license” from St.Vincent and the Grenadines?

There are 3 possible reasons:

It’s up to us to dig deeper into each broker to understand their true intentions and why they chose the legal framework they decided to choose.

Using our industry knowledge and experience we’re able to grade licenses using a 1 to 10 scale, then when combining the weighted metrics of all other parameters we’re able to produce a safety score for each broker.

A very fun and healthy twist in our methodology is that having off-shore licenses from low reputation issuers actually subtracts points from a broker’s trust score, no matter their intentions.

Platforms, Fees & Trading Conditions

The majority our data points are measured with a binary score combined with an opinion score with variable weights, here are 2 examples:

Trading orders example

Then once we have both scores (binary and opinion score) we weight for this particular case as follows:

The reason we give such an importance to the opinion score is that it’s nice to have a Buy-Stop order, but if it's complete garbage, hard to use and only confuses users then it shouldn’t be a positive point but it should rather reduce your average score.

Asset offering example

To solve this problem, we took a 2-step approach, first, we assumed that a healthy quantity of average maximum stocks per broker should be around 10,000.

Now, in order to prevent that a broker that offers 10,000 CFDs on stocks beats a broker that offers 7,000 real stocks, we decided to give a point reduction when all assets of a broker are exclusively CFDs on the whole asset’s average. Also for the particular case of stocks and ETFs we implemented a -3 points reduction in our 1 to 10 scale.

Now, when we assemble a broker’s total asset offering score, we give more weight to stocks, forex and ETFs instead of cryptocurrencies. This is because cryptocurrencies are meant to be traded on cryptocurrency exchanges, that’s their whole point.

As you can see, we tried using our industry acquired knowledge and logic to try and come with the best results possible.

Our current standing

At this precise point in time, our database is made of 15 global leading brokers. It’s needless to say that the bigger the database the better and time is our only restraint as we currently don’t have all the possible broker choices.

Bear in mind that just because we compare brokers, we’re not willing to add one with a bad reputation in our page to tell you that it was bad, there are certain standards to be met before joining our rankings.

Every day we’re building partnerships and trying to establish contact with the best in class brokers to add them to our comparisons and rankings.

Rest assured we’re every day trying to add new brokers and to objectively determine the best possible choices for our audience.

Conclusion

We’re a new brand in the broker comparisons space and we’re learning as fast as we can while implementing our innovative ideas to improve upon the great work that others have built.

Comparing and ranking brokerage firms is a difficult task. Sometimes it even feels like comparing pears to oranges as they’re both fruits, but they’re completely different and one is not better than the other one, they’re just a different taste.

Our objective with this whole project is to ensure that our users get pointed in the right direction when it comes to choosing a broker that actually serves their needs for exactly what they wanted while keeping them as safe as possible.

If you have any suggestions to improve our methodology or there is a broker you think that must be in our rankings, please feel free to get in touch with us via:

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