Why U.S. Traders Should Use Compare Forex Brokers?
U.S. traders have a lot to consider when choosing a Forex and CFD broker. Whether you’re a beginner or a professional trader, the best Forex Brokers should have the same considerations.
These include trading costs, such as spreads and commissions, trading platforms, selection of financial instruments and additional trading tools. There is also a range of secondary factors such as research (including educational videos and webinars), customer support and regulations.
Speaking of regulations, the U.S. has two main financial regulatory bodies: National Futures Association (NFA) and the Commodities Futures Trading Commission (CFTC). Both bodies combine to regulate the U.S. derivatives industry. The NFA is the sole registered futures association, while The CFTC essentially oversees the NFA and its duties. While you can technically trade with a broker that uses an offshore regulator, it is highly recommended to choose one that is NFA and CFTC-regulated.
That said, the NFA and CFTC have notoriously strict guidelines which limit the number of available forex brokers that offer financial services to US-based traders. However, the brokers that do, are some of the biggest and most well-regarded, globally. These brokers include Oanda, IG and Forex.com, all of which are trusted and long-standing brokerages.
With so many factors to consider and brokers to choose from, Compare Forex Brokers has done the hard work for you to provide a list of reviews suited for U.S. based retail traders. All of these broker reviews are also explained in plain English so any trader can understand.
Best Forex Broker USA.
A unique aspect of U.S. trading is that neither the National Futures Association (NFA) nor the Commodities Futures Trading Commission (CFTC) permits CFD trading. While this may seem limiting, you can still trade the forex market through spot trading. Both CFD and spot trading are leveraged products and use similar trading platforms, although CFDs offer a wider range of financial instruments.
As mentioned above, the strict regulations the NFA and CFTC imposes does limit your choice of brokers but there are still plenty of great providers. These brokers include TD Ameritrade, eToro and Interactive Brokers. You can check out our review of regulated forex brokers for the top forex brokers in the United States.
For those that live in the U.S. but are not a resident, there are options outside the USA. Our Forex Brokers Accepting US Clients review goes over the best brokers.
Forex Trading Platforms USA.
Choosing the right forex trading platform is essential to have a great user experience. Factors such as an intuitive interface, reliability and useful trading tools are key. While MetaTrader 4 is the most popular forex trading platform in the market, there are plenty of other great platforms. These include proprietary platforms that a broker has developed in-house (E.g. Forex.com) or other third-party platforms like cTrader or MetaTrader 5, MT4’s upgrade.
After you’ve chosen the right trading platform for you, it’s then vitally important to choose an appropriate forex broker. This is because of additional features like account types, charting tools for technical analysis and social trading and copy trading tools that the broker offers.
For this, you can check out our best US Forex trading platforms which include brokers such as IG, Interactive Brokers and Oanda.
Low Spread Forex Brokers.
In the volatile world of foreign exchange, choosing a forex broker with the lowest spreads is paramount. This is because spot trading major currency pairs like EUR/USD or GBP/USD can get costly. As such, choosing a good forex broker with low spreads will, in turn, lower your overall trading costs.
The reason for this is that spreads are variable (unless fixed) and can widen in volatile market conditions, causing trading costs to add up. In addition, there are commissions to think about and market marker accounts that are commission-free but typically offer wider spreads. For Forex traders, this is a lot to consider.
We have looked at all of these factors for you in our low-spread forex brokers U.S. review.
Best Automated Trading Platforms.
With the rise of algorithmic and bot trading, there are many great automated forex trading solutions out there. You can choose Expert Advisers using MetaTrader 4 (or MT5) or platforms specifically designed for automated trading. The best brokers offer solutions that cater to both audiences.
Generally suited for more experienced traders, trading robots amplify the effects of manual trading, increasing profit potential and the amount you can trade. There are also brokers such as eToro, that offer social and copy trading solutions to mirror successful trading strategies. All of the best automations can pick out trading opportunities that a human couldn’t, by analysing a huge amount of data at a faster speed.
Our best automated trading platforms US list has all the best brokers that offer these automated trading solutions.
U.S.A. Methodology for Broker Reviews.
Navigating the highly volatile and high risk inherent in financial markets is hard enough as it is. CompareForexBrokers.com is here to make it easy for you. The CFB team has writers with years of experience with a keen sense of detail. Key features we analyse when considering the best brokers include:
Trading Accounts Trading Costs (including spreads + commissions) Trading Platforms (proprietary and third-party) Social and Copy Trading tools Trading Products Minimum Deposit and Funding Methods Regulations.
Then there are additional considerations such as risk management tools and execution types. Risk management tools include order types such as guaranteed stop losses that prevent a trader from losing too much on a trade due to slippage. Or even Negative Balance Protection, which protects a trader’s account from going into negative territory. Trading execution types are whether a broker offers no dealing desk (NDD), STP or ECN trading or whether they are a market maker. This will affect the spreads a broker can offer due to access to liquidity pools and the speed of execution.
These pages are all U.S. focused, so we have only chosen brokers regulated by the NFA and CFTC. However, some of these brokers are multi-regulated, meaning they offer services to traders in different countries. Common subsidiaries that brokers we have reviewed are regulated by may include ASIC in Australia, CySEC in Cyprus and FCA in the UK.
As a U.S. trader, it is strongly advised that you use a broker regulated by the NFA and CFTC. However, there are many popular brokers that are not. Some such brokers that aren’t regulated by the NFA and CFTC include Pepperstone, IC Markets, Saxo Bank and XTB.
In every Forex broker review for traders based in the U.S., we are honest in our information, with the pros and cons of each broker. One thing we don’t do, however, is give trading advice so please note that all information is general in nature.
Understanding the Risks of Forex Trading.
Forex and CFD trading is inherently a high-risk venture. This is particularly true when trading on margin, and especially using leverage. The more leverage you expose yourself to, the more you can lose. For inexperienced traders, it’s doubly important to manage your exposure so you don’t risk losing more than you can afford.
The maximum leverage on offer for U.S. forex brokers is up to 50:1. While this provides more flexibility when trading, it also opens up your downside risk should a trade go against you. As such, when opening an account, it’s vital to look carefully at the leverage on offer and also use the online broker resources to better educate yourself.
Additionally, with the increasing popularity of CFD and forex trading, it’s essential to only trade with a trusted and reputable broker in the U.S. This is to avoid scams from unethical companies that may pose as legitimate advisors offering their services to profit illegally. So before you sign up with a potential broker, make sure it is regulated by the NFA and CFTC in the U.S.
Understanding The Risks Of Forex Trading.
Disclaimer: Leverage instruments are risky so it is advised you do your own research before trading on margin or with leverage. Trading with leverage is at your own risk.
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The leading forex broker comparison site, Compare Forex Brokers Pty Ltd is an Authorised Representative of Guildfords Funds Management Pty Ltd Australian Financial Services Licence No. 471379 (A/R No. 001274082). Copyright 2022 and all rights reserved. Trading Forex and CFDs with leverage poses significant risk of loss to your capital.
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