Complete Guide to the Best Forex Brokers
What is Forex Trading ?
Forex trading is the method of trading one currency for another, such as purchasing or selling currency pairs, depending on prevailing forex-market exchange rates.
The forex market is the biggest financial market in the world, with estimated currency trade volumes of nearly $6.59 trillion a day, as of April 2019.
What is a Forex Broker ?
Forex brokers are companies that offer traders a way to access platforms that allows them to purchase and sell foreign currencies. In this market, trades are often between two separate currencies, so forex traders either buy or sell the specific pair they choose to exchange.
Forex brokers may also be known as retail forex brokers, or brokers dealing in currency. Most forex broker firms only manage a very limited portion of the overall foreign exchange market share.
Retail money traders use these brokers to enter the 24-hour currency market for speculation purposes. Forex broker services are also offered by bigger companies such as investment banks for institutional clients. A forex broker serves as a middleman between you and the interbank network. If you don’t know what the interbank is, it’s a concept that refers to banking networks trading with each other.
A Forex broker would usually provide you with a quote from the banks they have credit lines and access to forex liquidity from. Most forex brokers use multiple banks, so they are able to give you the best available price.
What is the forex broker's role ?
A forex broker is a place where buyers and sellers go to transact currency sales.
The forex broker acts as a middleman, between you and the market. In other words, you can go to a broker to find a buyer or seller of currencies and they match you either with a respective seller or buyer.
However, rather than simply being the intermediary between you and another buyer or seller, they are also the intermediaries between you and what is considered a “liquidity supplier”
Throughout the years, Forex brokers have strengthened their customer service. It is typically very easy to open a forex trading account, and can be done online. A forex broker may, however, require that clients deposit money into their account as collateral before trading.
The broker also offers leverage to clients, enabling them to exchange greater sums than what is deposited in their account.
The leverage can be between 30 and 400 times the total existing in the trading account, depending on the country from which the person is trading from and the broker. High leverage makes forex trading very risky and the majority of traders lose money trying to trade that way.
How does Trading Forex work ?
Trading typically requires the use of borrowed money or ‘leverage’ for the individual FOREX trader. Depending on the FOREX broker you want to use, the leverage can be from 20 to 30 times the money you deposited, or even up to 500x conditional on the regulations.
Regardless of the leverage, FOREX trading begins either by purchasing or selling a pair of currencies. The currency pair will be quoted with a buying and selling price.
The buying price will be higher than the selling price. The difference between the buy and sell price is the spread. Broker spread prices are important as they will affect trade profitability. Smaller spreads means it is easier to get into the market and become profitable. Wider spreads mean that you will need bigger price movements to enter profit.
Why do I need a Forex broker ?
You may think this form of deal can easily be arranged by yourself. But remember the fact that you have to trade thousands of units of currency in order to make some kind of profit on a Forex transaction.
That makes things a little complicated, doesn’t it?
Add to that the fact that the foreign exchange market is seeing currency changing hands worth more than $6 trillion every day. Finding a buyer/ seller at the best price amid all that volume of transactions would be difficult for any individual trader. Trading without a broker is not practical for most.
That’s where the Forex Broker comes in.
Forex brokers can not only organise the exchange, but they can also optimise your exchange so you don’t have to bring all your money into one Forex transaction, and do so at a competitive price.
What are the advantages of using a forex broker ?
The foreign-exchange market, also known as the forex market, is an important component in the global financial system. It is the largest industry in the world in terms of value; much bigger than the credit market.
How exactly does one obtain foreign currency in order then to trade? By hiring a forex brokerage company to help them buy the currency they want, and then do business.
However, all brokers work differently, so here are some of the advantages that can come from opting to employ a broker :
Easy Access to Foreign Currency
If you don’t work with a forex broker, you’d have to go down to a brick and mortar currency exchange and either sit there all day waiting for lucrative trade opportunities to come up there or run back and forth trying to catch decent trades.
Currency exchanges often cater after their own interests, and usually their rates are higher than what the forex brokers charge. But with a forex broker, you can stay in the comfort of your home or office and take advantage of a wide range of trades at your own convenience.
Access to Demo/ Practice Accounts.
Most brokerage platforms give you either a limited amount of money or an infinite amount of money to play around before you start to trade for real.
This helps you to get a feel for the markets without losing thousands of dollars in savings; and fully understand if forex trading is right for you.
In order to make it more attractive to sign up for their specific service over another, many brokers give incentives to those who wish to sign up, such as $30 in free credit or extra money for every dollar invested into trading.
How Forex Brokers Make Money
Forex brokers are paid for in two ways; firstly, through a currency pair’s bid-ask spread.
If for instance the Euro/USD pair price is 1.20010 bid and 1.20022 ask, the difference between these two values, known as the spread is.00012, or 1.2 pips.
When a retail trader opens a position at the ask price, and then closes the position at the bid price later, the spread amount will have been received by the forex broker.
Second, brokers can charge extra fees. They can charge a fee per transaction, or a monthly fee for accessing a particular software interface, or fees for accessing special trading items such as exotic options.
Rivalry among forex brokers is very intense and most companies that serve retail customers find they have to attract customers by removing as many fees as possible. It has given rise to many providing free or very low transaction costs beyond spread.
A lot of forex brokers make money by their own trading activities as well. This can be problematic if their trading causes a conflict of interest with their clients, but regulation has helped to reduce this activity dramatically.
How to check the Reputation of a Broker
Forex brokers exist to make it easier for you to communicate with the banks that buy and sell currencies out there. They have a set of rules to obey, and certain processes that are required.
But the forex industry is not closely regulated, and while it has significantly improved, you can always run into some less-than-reputable forex brokerages.
The National Futures Association (NFA.futures.org) monitors forex brokers and can help you check the credibility of a broker.
However, before choosing a broker to work with, first test to see whether they are regulated by the relevant authority (The FCA in the UK). Licensed and regulated brokers will be making this information available on their website.
Regulation Among Forex Brokers
In an effort to deter and eradicate fraudulent activities, two bodies serve regulatory functions among forex brokers: The National Futures Association (NFA) and the Commodity Futures Trading Commission (CFTC). These organisations publicise litigation they may bring against someone whose activities are considered deceptive or purposely detrimental to their clients. In order to find out if a broker has an outstanding reputation and has the quality you are looking for in a broker, it’s worth doing some work. This work can be done by checking out the homepage of the NFA, and browsing our broker review list.
Many major forex brokers encourage prospective customers to use a trial account to get a clear understanding of how their trading platform works. Testing as many platforms as possible before determining which broker to use is a smart idea.
In addition, given that the forex market is a 24-hour industry, the majority of professional forex brokers will have 24-hour customer support.
Types of Forex Brokers
The first step in selecting a forex broker is to find out what your options are.
There are two main types of Forex broker:
- Dealing Desks (DD).
- No Dealing Desks (NDD).
Dealing Desk brokers are also recognised as Market Makers.
No Dealing Desks can be further broken down into:
- Straight Through Processing (STP) and.
- Electronic Communication Network + Straight Through Processing (ECN+STP).
Dealing Desks or Market Makers
Effectively, market makers build a demand for their customers.
In other words, they will carry only quotes from the real market, without allowing their customers to access them.
The market maker takes the opposite side of the trades which its customers make to make such their business is successful. That is, if a trader with a broker account that fits in this category buys EURUSD, then the broker sells the pair with the same number.
When the trader succeeds the broker loses money, the broker wins if the trader loses money. Just as plain as that.
In this case successfully beating the market means beating the broker. Now you can see that brokers in this category have an ethical problem with retail traders, as they are not popular at.
The brokerage house has 80 percent chance of winning by taking the other hand of their client’s trades. For this reason, it is more beneficial to be a market maker than to be a non-dealing desk broker. Such brokers make a profit on spreads and betting against their clients.
Trading with a market maker also has advantages for the seller. Because the broker takes the other side of the trade, settlement is done instantly, not in two days as in the cases of other brokers.
The only thing that remains in the way of trading with such a broker, as you can see, is their credibility or the ethical dilemma of thinking you are trading against your broker and not on the real interbank market. This is a huge issue for some traders.
How to know the type of broker you are using ?
Spreads and fees are the first and greatest pointers to the sort of broker you are dealing with.
Market makers: sets fixed spreads, no rollover fees, no commissions.
ECN Brokers: complex, very tight spreads, often offset by fixed commissions, rollover fees.
STP Brokers: Conditions differ based on size of the trade.
Bear in mind that this is just an indication. You need to verify the broker’s risk management strategy to be sure of what you are getting into.
A non-dealing desk setting is the real essence of brokering. Brokers in this category pass their businesses on to liquidity providers and only make a profit from commissions and fees.
In this group, there are two main types of Forex brokers: STP (Straight Through Processing), and ECN (Electronic Communication Network) brokers.
Straight Through Processing (STP) Brokers
STP brokers do not have a dealing desk, but they use some of the market maker broker practises to provide their customers with more flexible trading conditions and bypass some of the trading limitations on the interbank market.
Most of the time, this type of broker shows price rates that are similar to interbank market rates, and as a first priority, STP brokers deal directly in the interbank market just like an ECN broker.
However, if the interbank market cannot find a counterparty for an order, the STP broker may choose to function as a Market Maker and suit the order within its own customer base or take over the order’s counterparty itself.
Electronic Communications Network (ECN) Broker
A true ECN broker brings traders directly into the interbank market with counterparties. The only role that the broker plays in the transaction is to create a link between buyers and sellers, they do not set their own price prices or handle inventories in any way, since all the price rates are taken directly from the interbank.
ECN brokers make their profits either from spreads charged on top of the spreads between the buy-and-sell interbank rates or from fixed trade execution commissions.
Since spreads are competitive in the interbank market, however, ECN brokers cannot afford to offer fixed spreads, as this would risk removing their fee.
How to choose a forex broker ?
You wouldn’t have to choose a broker in a perfect world, as they would all be ideal brokers, but the world is far from perfect and chances are you’ll be making some sacrifices while making your choice.
You have to have a strong order of goals to do so.
So, here’s a list of our picks for the most critical features a great forex broker should have:
Regulation is compulsory. If at least one financial authority does not control and regulate the Forex broker, it should be considered a risky broker, and avoided.
Regulation comes with a premium for the broker but from the point of view of a trader, this is a premium that the broker has to pay.
Being a regulated broker means the broker has to fulfil certain specific conditions for that licence and most of those conditions are to the benefit of the trader.
Top brokers offer a wide range of deposit and withdrawal methods so forex traders can quickly and securely make deposits and withdraw earnings without any hassle.
Forex brokers hold deposits to make trading easier for traders. They also have absolutely no reason to hold profits for traders. And, the best of them makes it as convenient for traders to remove their earnings as it is to deposit.
Suitable type of broker
As we discussed earlier, each broker category has advantages and disadvantages, and when selecting a broker, it is important that they operate in a manner that fits your style of trade.
To put it briefly, if you’re a day trader, a scalper, or a trader who prefers to capitalise on short-term swings, as opposed to holding out for longer-term trends, then market makers are probably the best fit for you because of their fixed spreads and quick executions that promise no slippage.
If you’re a long-term trader with the resources to open major currency positions, then a STP or ECN broker will be better suited to your needs, as you may consider the much greater liquidity and tight spreads a more promising offer.
Many traders do a lot of due diligence on most aspects of a Broker’s profile without giving the Broker’s domicile too much thought. It is incorrect to conclude that a broker from one jurisdiction is equal to another broker from another jurisdiction, which may lead to needless headaches down the road. It is imperative that you do your due diligence and homework on the Broker to ensure they are located within a country or area that has a strong regulatory body that regulates FX broker dealers’ operations.
If you have any issues with your forex broker, if the currency broker is located within a well-regulated domicile, it will be easier for you to recover your funds. Be wary of forex trading brokers based in the Bahamas or Panama, as regulation is very lax in those areas. At times, it can be difficult to seek to assert your legal rights in these jurisdictions.
For any trader, this is crucial because if the funds are not secure, the broker is not to be trusted.
Of course, all Forex brokers are going to say the funds are safe and so on.
The thing to do is inquire whether the funds are segregated or if the broker provides segregated accounts. If yes, it means brokers are unable to access the funds deposited by the trader or use them to finance the company; which is a good thing.
This way, the brokerage house is benefiting simply from the way it is structured, from commissions and spreads, and from taking the other side of the trades if it is a market maker.
In any case, the broker should be avoided if protection of the funds is not guaranteed.
Types of Accounts Being Available
Trading accounts offered are important because they tell a lot about the broker type, the quality of execution, as well as other information related to the overall brokering operation.
Ideally the broker should provide opportunities with various strategies for both traders, small and major players alike. For example, it is important to see whether the Trading account provides quotes in four or five digits for small retail clients.
In the case of the EURUSD pair, this applies to the digits that accompany the large number, a five-digit quotation being something like 1.05508.
Brokers giving quotes only four-digits should be avoided in general.
For those trading accounts, what you’ll get is a lot of re-quotes (the broker will re-quote you several times when opening a market place and the market will have already made its move by the time the trade is executed).
For every business, reputation is everything. This saying holds true for businesses that deal in finance, including forex brokers. Each year, there are new foreign exchange brokers springing up by the dozen and some of these companies are based in regions where regulations are relaxed or non-existent. Even those brokers who have gone through rigorous regulatory standards, many also do not always follow their governing bodies’ best practices. Ultimately, it is up to the individual forex trader to make sure they have a reputable broker with a solid forex broker rating to place their funds.
You should search the website of the regulatory authority to make sure there are no big concerns about the broker. You can also search online forex broker feedback and forums to get details from broker’s past and current clients.
One of the most negative factors of how respectable a firm is would be the company’s actual age. The majority of forex brokers who have stood the test of time and have been in business for at least 7 to 15 years are good candidates who might deserve your business.
Instruments and Currency Pairs
Obviously, most forex traders want access to all the major currencies, along with most minor currencies and some exotic pairs. But you might also be involved in other instruments and asset groups beyond that, including cryptocurrencies, CFDs, precious metals, minerals, stock indexes and more. There will be some forex brokers offering a wide range of instruments for trade, while others will only be specialising in some asset classes.
You want to make sure your prospective broker gives you access to your favourite trading instruments based on your requirements.
So, if you’re a trader who’s currently involved in several different types of markets or feel like you’ll eventually want to tap into commodity markets outside currencies, then selecting a broker that has a wide range of product choices may be smart.
Fees are fair
You want to get the best value for your deposits, so considering how high a broker fees are is only normal for any trade. In addition to spreads, if your broker charges commissions, simply add the two together to see whether the end price is fair or not.
Don’t get surprised by overnight rollovers – this is a regular transaction and sometimes the swap interest rate differential will actually go in your favour. Yet watch out for additional hidden fees like “account inactivity” fees, or inflated withdrawal fees.
Flexible Trading Choices
Trading choices also depend on the type of broker you are trading with and the regulations they are expected to follow, but you can still find a lot of variety among brokers who are stacked on these two parameters in a similar way.
Flexible leverage and flexible stops are the most critical options to have, which means you can edit the Stop Loss and Take Profit orders right after you open the trade.
Style of Trade
For the Forex market, there are three main trading types, and all refer to the time period for the trades being taken: these styles are scalping, swinging and investment.
Traders have to look for the right broker which offers the best conditions based on the trading style of the trader.
Scalping means traders open positions and close them extremely quickly, only going for a few pips, and these calls for precise executions. For these traders, brokers who sell small slippage are preferred.
Swinging is a trading style that refers to trades being opened for a longer period of time, from one day to a few weeks, giving the broker new challenges.
These traders look to a broader time period and the efficiency of the broker is essential. Traders who fall into the last category deposit bigger sums of money and most definitely an ECN broker is the best match. For these traders only an ECN/STP broker would have the right trading account.
The trading platform acts as the bridge or interface between you, the retail trader and the markets. It is the primary resource with which the trader conducts its market-related activities from.
To the trader, a good trading platform is as important as the most important tool for any profession.
One of Forex trading’s more reliable and common trading platforms is Metatrader 4. Many broker-specific applications are also available but Metatrader is by far the most commonly used.
Most of the top FX brokers give demo accounts so you can test drive some of their custom Trading platforms. This is typically a good idea, because when you want to move to a Live Trading account, it will help you become more familiar with the platform.
Bear in mind that the trading platform does not need to be fancy or come with too many features. Such extra features may also become distractions. A basic, but efficient, fast and user-friendly platform would usually prove to be the best.
Leverage allows a trader with a comparatively smaller amount of invested funds to take larger positions. It will serve to increase gains on winning trades but it will also serve as a drawback to increase losses on losing trades.
Forex brokers offer a varied variety of leverage rates, and these rates are often restricted to different amounts based on country specific regulations.
In the US, for example, the highest allowable leverage is 50:1. Nonetheless, several European-based brokers will offer leverage on currency pairs usually between 100:1 and 1000:1.
Aggressive traders prefer to select FX brokers that provide high rates of leverage, but the leverage provided at the lower end of the spectrum will still suffice for most traders with modest to unadventurous risk appetites.
Traders should always bear in mind that leverage is a double edge sword, and just because a forex broker provides high leverage limits does not mean you can use the full amounts at any time.
Individual Account Executive
A big benefit is getting an account manager who is directly responsible for tracking your performance, giving you feedback and leading you towards business opportunities.
Although this is a service that many brokers only provide to their larger clients, it doesn’t hurt to get in touch and inquire about getting your own account manager even if you don’t have too much money to invest in Forex.
Customer care is essential to a forex trader.
Look for a live chat that is available 24/7, and reply to every request no more than one business day. These are to be checked, and preferably, before depositing a larger sum of money with a broker, traders will check and see how to make a withdrawal, and the obstacles, if any.
That’s the only way to learn for sure how the broker treats its clients.
Types of forex broker regulations and licenses
The Financial Conduct Authority (FCA) is in charge for regulating FOREX brokers, so restricting your choice of brokers to companies that are strictly regulated here in the UK or in your country is a very good idea.
There are some brokers that are governed in other responsible jurisdictions (such as the U.S. or Australia), though each country may have some discrepancies about the laws and how they are implemented.
It is usually legal to use an unregulated broker but it can be risky because the broker would operate with little, if any, supervision.
FCA has a robust collection of FOREX brokering guidelines. Any UK FOREX broker must be fully licenced by the FCA, and fall into one of three categories:
Any broker holding an FCA Dealer License may be a market maker and may also retain customer funds in compliance with the FCA’s regulations.
It can also run a ‘B-book’ that allows the broker to act as a counterparty to its customer, rather than brokering the transaction on the open market.
An FCA intermediary licence would allow a broker to operate a ‘matched-principle’ model brokerage that is limited to orders being handled via Straight-Through-Processing (STP).
Restricted Broker License
A broker with this licence may act as a FOREX broker marketer, but is unable to retain funds from the clients. In the usual sense of the word, this type of broker is more of an agent between retail clients and brokers who manage trades than a ‘broker.’
How to open an account with a forex broker
Forex trading is an exciting business. There’s so much excitement online about it, but how exactly does the average person get started with forex trading?
The first thing you’ll have to do is to settle on a broker. This can be done by trying out on the demo platforms of different brokers and going through the checklist covered a few steps above.
After you have decided on a broker, you must go through a regular method of sign-up that is similar to opening a bank account.
Typical Requirements needed to Get Started
The first thing you’re going to do is set up a forex brokered account. To have your account set up, you’ll need to include a lot of personal details like the following:
- Physical address.
- Email address.
- Telephone number.
- Currency type
- Country of Nationality.
- Social security number or tax ID.
- Occupational status.
You can see disclosure and terms during the final steps of opening your account.
Please take these seriously, forex is a hard business for beginners; if you are not careful, you can lose your capital or even your life savings.
After you have sent all of your information to be processed, the broker must validate it, usually asking you to send in some authentication documents such as an ID provided by the government, and maybe a utility receipt to validate your name and address.
Once they have checked and verified your details, you can fund your account and start trading. Remember, never trade with money you cannot afford to lose.
Forex broker review 2020
It is difficult to find the right forex brokers for beginners, as there are so many different types of accounts and brokers to choose from. It can be confusing when you start out first. But don’t worry. We have your back and are going to help you pick the right broker to start doing business immediately.
All the forex brokers we checked below are companies with solid reputations. Having that in mind, you can concentrate on what they have to offer, and which one offers what you need, and with the least hassle.
Let’s hop in and look at some of the top-rated forex brokers for traders starting out.
Forex.com, founded in 2001, is a part of Gain Capital, which was established in 1999, and is a US-based public corporation listed on the New York Stock Exchange.
Forex.com has two distinct online trading platforms from which to select. Their own custom desktop platform, as well as the desktop trading platform MetaTrader 4 (MT4), along with mobile and tablet trading apps. They also have a web-based trading platform (browser).
From day one, Forex.com has one of the simplest interfaces to understand and help you start trading. Therefore, we rank this as one of the top forex broker account for beginners.
Established in 2007, eToro is regulated in two tier-1 jurisdictions and one tier-2 jurisdiction, making it a safe (low-risk) broker for forex and CFD trade.
EToro is exceptional for social copy trading and cryptocurrencies. In addition, eToro offers a user-friendly online portal and smartphone app, perfect for less experienced investors.
eToro is more expensive than most of its rivals for daily CFDs and forex spot trading, and charges large spreads, while providing a premium account to high-deposit clients. In addition, while eToro provides unique social trading analysis to traders, we consider its market research tools to be not too impressive.
Dukascopy is a regulated bank approved for trading in two tier-1 jurisdictions, making it a secure broker (low risk) for forex and CFDs.
The JForex 3 platform suite from Dukascopy is highly versatile and vibrant with features including a wide array of charting tools and automated trading capabilities.
The JForex Trader app from Dukascopy for smartphone is our favourite for 2020. In short, Dukascopy is keeping up with the leading CMC Markets, IG, and Saxo Bank platforms.
For Commissions & Fees, Analysis, Mobile Trading, Platforms & Resources, Cryptocurrency Trading and Overall, Dukascopy is well-rounded.
ForexTime or FXTM is a forex broker that is tailored to a variety of skill levels and was established by Andrey Dashin back in 2011.
ForexTime (FXTM) provides a solid trading platform focused on MetaTrader 4 and 5 and provides a broad range of trading tools including Forex, CFDs for Indices & Commodities, Cryptocurrencies, Spot Metals and CFD Shares.
ForexTime is well-respected in the competitive spread industry, and is regulated by CySec in Cyprus by the FCA in the UK.
Although ForexTime is one of the newer brokers, it has evolved at a rapid pace and won numerous awards since inception.
Unfortunately, FXTM is not open to US traders so these customers will need to find another broker.
FXCM was founded in 1999 and is a publicly traded subsidiary (NYSE: JEF). FXCM is regulated in three Tier-1 jurisdictions, making it a safe broker for forex and CFD trading (low-risk).
FXCM has won several accolades in our testing across six categories, including Mobile Trading, Platforms & Tools, Social Copy Trading, Education, Customer Service, and Ease of use.
FXCM provides a very small range of tradable products. In addition to 39 currency pairs, FXCM only provides 32 CFDs, without single-stock CFDs. We also found commissions merely average for daily forex trading and CFDs.
Due to favourable spreads, FXCM is an excellent alternative for active forex traders, as well as traders looking to use automated trading strategies. Both the FXCM platforms provide traders with the ability to perform algorithmic trading and use advanced charting tools.
Admiral Markets was established in 2001, and is regulated in two tier-1 jurisdictions and two tier-2 jurisdictions, making it a safe broker (average risk) for forex trading and CFDs.
Admiral Markets stands out in contrast with other MetaTrader-only brokers, which offer little or no functionality beyond the default interface, thanks or additional trading software and strong analysis.
For example, customers can access, Acuity Trading, Dow Jones News and Trading Central, using Premium Analytics.
In 2020, Admiral Markets finished among the best forex brokers for beginners as an additional advantage for less-experienced traders, thanks to an industry-leading range of educational content on its website.
Unlike other MetaTrader traders, Admiral Markets offers its website and trading platforms with a wide variety of analysis tools and services. Traders can quickly and easily find what they want in one place, thanks to neatly-organised content on its website.
Alpari International was founded in Mauritius in 1998, and has developed into a global trading company. The latest revamped brand was introduced in 2013, as a modern part of the company.
Alpari international has expanded internationally, with more than 20 years in the business. Alpari international runs a MetaTrader 4 and MetaTrader 5 web-based platform, with a dealing desk system. Both platforms can have a high degree of versatility, including advanced and intuitive tools for charting and easy navigation.
Alpari provides forex and CFD trading across a wide spectrum of low-spread markets, with a variety of account styles that deliver for any level of trader, from novice to specialist.
Many countries around the world have access to the brokerage facilities, but the following are officially excluded: Georgia, Turkmenistan, Ukraine, Uzbekistan, Moldova, Tajikistan, Armenia, Kazakhstan, Kyrgyzstan, Azerbaijan, Belarus, Russia, South Korea, Japan, Haiti, Suriname, New Zealand, Canada, Mauritius and the USA.
FxPro is a leading online forex and CFD dealer worldwide. The firm allows dealing around the clock with 6 separate asset groups and over 250 financial instruments.
FxPro was brought to existence in 2006, and has since established itself as a forex pioneer. It has grown to provide direct trading to customers from more than 150 countries.
FxPro has picked up quite a number of foreign awards along the way. In addition, UK and EEA traders are covered under both the financial services compensation scheme (FSCS) and investors protection scheme, respectively.
FxPro takes an incredibly strict view of consumer welfare. As a result, all the consumer assets are pooled from a variety of global banks in Tier-1 accounts. In fact, advanced technologies for encryption and authentication protocols are established in order to deter theft and sensitive data are kept in a secure safe.
There are a few concerns though, such as the slow multi-confirmation system and restriction to traders from Canada and the USA.
Launched in the UK in 2016, Pepperstone has several European customers and trades in accordance with the regulatory standards established by the European Securities and Markets Authority and the Financial Conduct Authority.
One aspect in which Pepperstone excels is its dedication to delivering technology that suits every single trader, and this is most evident in its multitude of platforms.
Pepperstone is known for its low cost, quick execution and profitability, so it doesn’t tend to feel the need to deliver any major offers or promotions. That said, it comes with a variety of free educational tools for its customers, from trading guides to webinars.
Pepperstone is highly recommended, but as with any outfit, it does have some disadvantages that potential clients should be aware of.
The first of these is that it has a relatively small range of investment instruments, with its primary emphasis on forex. That means it may be best for those who want to create a more balanced portfolio to look elsewhere.
A second, although slight, downside concerns its mobile applications. While there’s the option to trade anywhere, those who want to do that on the go will be restricted to using MetaTrader 4, which could be an issue if this isn’t your preferred platform.
Swissquote Bank Ltd is a member of the Swiss Bankers Association and holds a banking licence granted by FINMA, the Swiss Federal Financial Market Supervisory Authority. Swissquote Group Holdings Ltd, its mother business, is listed on SIX Swiss Exchange (SQN).
Swissquote Bank offers users the opportunity to trade through CFDs and FX Options on more than 130 instruments covering Currencies, Precious Metals, Indices, Bonds and Commodities.
Swissquote provides three different platforms for online trading, such MetaTrader 4 and MetaTrader 5 and as its own award-winning Advanced Trader platform.
Swissquote offers both beginners and experienced traders a very attractive deal to trade with a licenced Swiss bank and gain access to a broad variety of additional trading platforms such as Trading Central and AutoChartist for trading on more than 130 different instruments, while accessing an eBanking network with a Swiss IBAN personal number.
IC Markets was established in 2007 in Sydney, Australia and is governed by the Australian Securities and Investment Commission (ASIC) and the Financial Services Authority of Seychelles (FSA). They handled $646 billion worth of trading volume in April 2019 alone, according to the broker’s website.
Although the broker provides services and apps designed for both novice and experienced traders, due to their New York Equinix NY4 data centre the company is promoting itself as the ‘go to’ option for high-volume traders, scalpers and trading algorithms – handling more than 500,000 trades a day.
Customers at IC Markets are able to trade more than 236 Forex, CFD and Futures markets across 60 currency pairs, over 120 options, 17 indices, 4 futures, over 19 commodities, 6 plus bonds and 10 cryptocurrencies.
IC Markets also provides mobile browser-based trading, Android and iOS trading applications for both the MetaTrader and cTrader platforms.
IC Markets offers a dynamic and exclusive portfolio across a wide variety of asset classes that are ideal for both beginners and experienced traders, with further offerings tailored to the professional high-volume and automated trader.
Since 1974, IG has been a legal and controlled market place. IG Corporation, the parent organisation, also owns NADEX in the United States. IG Company is listed on the London Stock Exchange and is one of the world’s oldest forex firms.
For US traders IG supports over 80 currency pairs. IG offers its own e-commerce website. It also supports MetaTrader 4 and apps for the Android and iOS smartphone phones.
IG works well for beginner traders and offers cutting-edge tools. IG also offers a forum which meets the needs of the traders at all levels of experience.
Ultimately, IG is a reliable forex site for US traders. It’s a straightforward and controlled platform that works to experienced traders for beginners, just make sure you completely understand how it works before you start with real money.
If you want to learn forex, it’s a good idea to start with IG Academy and a demo account. When you know more, or if you are already starting with some forex skills, you may want to upgrade to an IG MetaTrader 4 account.
CMC Markets is considered a secure and low-risk forex and CFD brokerage, is a publicly listed firm with regulations in four tier-1 jurisdictions. It’s also considered the lowest-cost forex and active trading option.
Pros include: very competitive low-cost commission charges, Large and diverse product range, providing liquidity rebates to active traders who surpass at least $25 million a month in notional trading volumes, guaranteed stop loss orders available, and real-time news and sophisticated order types.
The drawbacks include: Minimal security features, High US index for CFD spreads and no copy or social trading site.
CMC Markets is ideally suited for both committed traders and novices. The platform has a range of educational tools and resources to help you learn about forex trading and CFDs, and a knowledgeable and supportive customer support team.
The business also provides more experienced and successful traders, however, who want to take advantage of their Forex 0.7 pip minimum.
AvaTrade is a top international forex broker headquartered in Ireland and well-regulated by the Central Bank of Ireland in Ireland and Europe. They are one of only a few top forex brokers offering options for fixed spread trading.
At AvaTrade you have a choice of account types which include a regular trading retail account, an options trading account, and a dedicated spread betting account.
The minimum deposit around the board here is an open $100, and there are also demo accounts and an Islamic AvaTrade account.
You can finance your account with a wire transfer, deposit with a credit card, eWallet and most of these methods have no fees. You have the option of MT4, MT5, or Webtrader when you trade, and the listed fixed spreads start from 0.9 pips.
Saxo is more of a bank rather than a broker, so much so that it’s regulated as such. Saxo Bank, a Danish company which was established in 1992, is definitely not for all budgets. However, once inside you will have access to a broker with a very high degree of expertise and the opportunity to trade on real instruments like futures, ETFs, options, bonds and securities as well.
There you can find three forms of account available where the minimum deposit starts at $10,000 and can go up to a whopping $1,000,000 for big time trading depending on the account you select.
You definitely get options for this amount of deposit though. Saxo Bank gives you a vast variety of trading options with more than 40,000 assets to choose from. Beyond that, the distribution is not bad, either. This starts on some of the famous forex trading markets at just 0.3 per cent.
If you are trading forex in the U.S. then chances are you know OANDA. This is one of only two brokerages in the US. It also represents clients in the United Kingdom, Singapore, Canada, and Australia. Additionally, it has a reputation as the most reliable retail forex site.
Pros include: open a trading account with just $1, Very safe and controlled under FCA, CFTC, ASIC, IIROC, and Singapore’s Monetary Authority, and offer a standard broker spread and a less costly raw spread averaging.
The drawbacks include: slow support response, little to no new educational services, highly disorganised, and fragmented research and trend news.
OANDA’s been around since retail forex started. The business has grown and established a reputation for being a trustworthy exchange while it was formed within academia.
It has more product ranges, improved infrastructure, and a loyal customer base that stretches the globe, as a forex broker. Since OANDA has been around since the 1990s, they have the most historic data and they offer forex traders the latest trading technology.
Founded in Cyprus in 2009, XM is Cyprus’s largest forex broker and the world’s third-largest. Over the last few years, they have had a substantial rate of growth.
When it comes to platforms, XM offers only MT4 and MT5, but where it excels is certainly in the order execution technology, which is why it is so common among very active day traders.
They can also theoretically deliver up to 1:888 very high leverage that will appeal to traders.
The fact that XM offers a very wide variety of deposit methods, currencies and usable base currencies to choose from is added to its positive side.
You can also get started on an array of different account types. The minimum deposit on these types of account can be very competitive starting at just $5 for a micro account and going up to $10,000 if you want to open a share account.
London Capital Group, LCG
You can never lose more than the amount that you have on deposit with London Capital Group, and you can trade in a number of asset classes including all indexes, forexes, cryptos, shares, stocks and commodities.
The key strength of LCG is that you can exchange a wide variety of asset classes internationally, and they don’t charge commissions.
The broker is well known for trading in forex and cryptocurrencies, but also has a very competitive small range.
You also never have to worry about losing track of your investment, with a number of ways to navigate their online brokerage.
LCG is one of the more high-tech forex services available for smartphones, with its mobile app and browser application. They lose certain points, though, because they don’t offer a way to test strategies or automate your orders.
That being said, they have other advantages to bring. For example, owing to the security of the corporation, account holders may never go into negative.
On TD Ameritrade, you can trade with almost 80 currency pairs, but it is the tools, analysis, and streaming data on the thinkorswim platform that make this a top option for US forex traders.
Because TD Ameritrade uses GAIN capital, which is Forex.com’s owner, spreads for EUR / USD contracts average 1.06 pips. There is no minimum initial fee, and without a subscription, you can access think-or-swim app.
The cost of trading with TD Ameritrade on forex is dependent on the spread by itself. In October 2019 the broker recently eliminated all portfolio commissions and ETFs. TD Ameritrade, however, also has a calculator to help you measure the expense of holding various currency pairs. This depends primarily on the course of the scale of the trade and order.
Another Forex sector giant, well known worldwide and based in Cyprus, Plus500 is a forex broker type of CFD provider, market maker.
With Plus500 you can run about 2000 tradable CFDs in addition to the big forex currency pairs. Plus500 does not offer trade through the classic MT4 or MT5 platforms, but rather via its own cloud, desktop and mobile platforms, specifically designed to enhance the CFD trading experience.
Because of the ease of use of its proprietary platforms, Plus500 can be a good option for anyone wishing to start trading.
As a forex dealer, Plus500 gives you both fixed and floating spreads depending on the assets you sell.
The Plus500 minimum deposit is a flat $100. You’re also free to try out their full unlimited trial account before making this deposit. This will really help you in getting to know this top broker’s proprietary trading platform.
Below are three of the most important considerations to bear in mind when selecting a forex trading broker online. Check to see that the broker is regulated. Confirm that your deposit to the broker will be safe, and finally, compare trading platforms by doing a demo to determine the platform you are comfortable with.
A well-known, well-regulated broker is essential to prevent forex scams. To verify if your forex broker is regulated, first find the registry number at the bottom of the broker’s homepage from the disclosure document.
Then, look up the company to confirm the registration number on the regulator’s website. If your country doesn’t have a regulated broker controlled, look elsewhere.
No, you just can’t. To facilitate any trade, you must have a broker. This broker is the middle man who links you with a particular buyer or seller. You’ll never be able to reach the person you’re trying to transact with without the link.
Although some forex brokers do not need a minimum deposit to commence forex trading, most do so. Unless a demo account is opened that uses virtual money to practise, most forex brokers need a minimum deposit of between $100-$ 250 to begin trading.
In most situations, yes. If you’re making a net profit trading forex, you’ll most likely have to pay the income tax. When the time comes make sure you consult a tax expert.
Much of this depends on your local tax regulations and jurisdictions but you will have to pay tax on any net gains you make on your account in almost all cases.
Practice is important, first. Start by opening a demo account, so you can get used to the tools and trading platform.
It is also essential to read books to learn how to conduct market research and perform the technical analysis. Then open an account when you’re ready, fund it and start trading.
The forex trading platform of MetaTrader 4 (MT4) is built on a previous generation (version) of software developed by Metaquotes Software Corporation, while the current version is the MetaTrader 5 (MT5).
Besides supporting individual shares, MT5 also features advanced functions such as using cloud storage to run strategies and perform backtesting. Backtesting must be performed locally or via a Virtual Private Server (VPS) using MT4.
There is a very high degree of risk involved in forex trading.
Foreign currency trading can represent a challenging and potentially lucrative opportunity for investors. However, you should carefully consider your investment goals, level of experience and risk appetite before deciding to participate in the Forex market.
In any foreign-exchange trade there is substantial risk exposure. Any trade involving currencies entails risks including, but not limited to, the potential for changing economic and/or political factors which could significantly affect a currency’s price or liquidity.
Therefore, do not trade in money which you can’t afford to lose.