8 Best Forex Brokers and FX Trading Platforms (2022 Reviews)
(Ad) The foreign exchange, also known as forex, is a global marketplace for buying and selling currency pairs. The forex market is one of the largest and most liquid financial markets in the world, allowing traders to exchange global currencies 24 hours a day, 5 days a week.
However, with so many forex brokers to choose from, picking the right forex trading platform for your needs is not easy. To help you decide, we’ve reviewed dozens of forex brokers on a variety of factors including assets, regulation, trading platform, user reviews, and fees.
Whether you’re a beginner or advanced forex trader, here are the best forex brokers in the industry.
Top 8 Best Forex Brokers of 2022.
XTB: Best forex broker overall IG: Best for U.S. traders Etoro: Best for trading cryptocurrency Plus500: Best for trading forex CFDs Forex.com: Best customer service Interactive Brokers: Most advanced charting tools CMC Markets: Best for spread betting Saxo Bank: Best selection of FX pairs.
#1. XTB: Best Forex Broker Overall.
As one of the largest forex brokers in the world, XTB has a stellar reputation for providing a best-in-class trading experience. Around since 2002, they’re a veteran in the space, though not necessarily the most senior (IG probably gets that distinction).
Still, with nearly two decades of experience, XTB has developed superior technology that they continue to adapt and improve, earning them a spot on our list of the best forex brokers. After becoming a foreign exchange brokerage house in Poland, they quickly expanded and now have thirteen offices across Europe.
With XTB, you can trade on over 2,100 global markets and gain access to a broad asset class of more than 4,000 instruments. These include forex currency pairs, stock and ETF CFDs, stocks, indices, commodities, and cryptocurrency. For forex, you can trade 48 different currency pairs. The currency pairs also include the most popular, such as EUR/USD, GBP/USD, and EUR/GBP.
Trading Platforms Overview.
XTB offers xStation 5 and xStation 5 mobile along with MT4. xStation 5 is XTB’s proprietary trading app, and it’s comparable in design and functionality to MetaTrader4. However, it does lack the ability to create custom indicators, which is a base feature in MT4 and a staple in currency trading.
Forex traders also have access to a demo account that gives you $100,000 in free currency to play with and 200:1 leverage. The demo broker’s trading platform trial is limited to four weeks, so make sure you’re ready to start to trade forex before signing up for the trial.
The platform has everything you’d expect to see in an online forex broker, including comprehensive charts and trading tools, a robust trading calculator, and real-time currency market sentiment information.
Key Features.
There’s a lot to like with XTB, a leading forex broker, including several must-have features:
Access to thousands of instruments: With few exceptions, you can trade whatever your heart desires. Active traders tend to appreciate the myriad options.
Negative balance protection: Trading foreign exchange markets can be stressful, but you’ll have peace of mind with the knowledge that your losses will never exceed the available funds in your account.
Competitive spreads: XTB offers low spreads and competitive pricing for online trading, starting from 0.1 pips. There are different spreads for standard and pro accounts, with pro accounts offering a lower spread.
No minimum deposit: You don’t need a giant bankroll (or any bankroll) to get started. This is true for both forex and CFD traders.
World-class customer support: With customer support available in multiple languages, everyone can access qualified help. Plus, support is available 24 hours a day, five days a week, so you can get help whenever the forex market is open.
XTB is also a regulated forex broker, with your funds being stored in segregated and distinct bank accounts. Further, in the event of a security breach, XTB has an insurance policy with Lloyd’s of London that will reimburse you up to £1 million (or your local currency) to help make you whole.
And finally, XTB is under the umbrella of the most trusted supervision authorities. The list includes FCA, KNF, IFSC, and CySec.
#2. IG: Best for U.S. Traders.
IG is our choice for the best forex broker overall. IG offers an extensive list of markets to trade, competitive pricing, trading signals, and industry-leading education.
With an extensive range of awards under their belt, IG's currency trading platform is an ideal choice for all types of traders, from beginner to advanced.
Markets to Trade.
IG offers an impressive selection of over 17,000 tradable assets including indices, stocks, forex, commodities, and cryptocurrency.
IG offers 4 different ways to trade the global financial markets including:
Spread Betting: Speculate on future market price movements without having to purchase the underlying asset.
CFDs: Trade the difference in market price between opening your contract and closing it.
Turbo24s: Control your leverage and cap your risk as you trade unique on-venue securities.
Vanilla Options: These are traditional call and put options that are best suited for advanced traders. Choose your expiry, strike price, and premium to control leverage when buying.
Note: U.S. traders only have access to forex pairs, with spreads starting at 0.8 pips on EUR/USD and USD/JPY.
Trading Platforms.
Web Platform.
The IG web trading platform is created to offer traders a fast, clear, and smart way to trade spot forex via a web browser. Features of the web platform include:
Easily open, close, and edit positions in just a couple clicks. Choose between a light or dark theme platform and customize your workspaces to fit your needs. Adjustable smart settings that remember your position sizes and stop values. View the same market across multiple time frames simultaneously with split charts. Apply a variety of indicators and drawings without sacrificing speed.
Mobile Trading Apps.
IG offers a variety of mobile trading apps that allow you to trade forex from any iPhone or Android device. The IG mobile trading app offers full trading functionality with a range of technical indicators, customizable alerts, and advanced trading options.
MetaTrader 4.
MetaTrader 4 is a third-party trade platform that offers access to a range of tools and features to help you customize your trading experience. You can use these tools to help build your own trading algorithms, which may help automate your trading.
When you trade forex on MetaTrader 4 with IG, you'll have access to over 50 FX pairs. You can go long or short with spreads starting at 0.8 pips. MetaTrader 4 also comes with 18 free add-ons and indicators that you can use, as well as thousands more that are available for purchase.
Key Features.
IG has a comprehensive feature set that includes something for everyone, putting it at the top of our list of best forex brokers. Our favorite features include:
Streamlined design: The web trading platform design is bright, clean, and easy to use. At a glance, you can see the market prices, spread, and margin for your preferred trading pair. If you’re just getting started, the handy information tab will guide you on trade sizes, minimum stop distances, and more.
Charts and advanced trading tools: IG offers some of the most intuitive currency trading charts in the industry, built on flexible HTML5 technology. You can view multiple timeframes in a single trading chart, build customizable indicators, and trade directly from the charts.
Knowledge base: The life of forex and CFD traders can get lonely, and if you’re a beginner in the foreign exchange market, it can also be overwhelming. IG has a lively community of active traders on Twitter, where you can get invaluable guidance. There’s also a curated Reuters feed, and the IG team regularly publishes detailed analyses to help you learn and build upon your knowledge base.
Further, IG has an in-house TV channel where you can watch the advanced traders share their knowledge live three times a day, five days a week. Become proficient at charting, trading, and more, just by following along.
Alerts: IG's trading alerts are free, customizable notifications that are sent to you whenever your specifications are triggered. Most traders use them for when economic events occur, target prices are hit, or technical conditions change. Trade alerts are sent to you via email, SMS, or push notification, allowing you to react instantly.
Signals: With IG, you can get real-time trade signals with actionable "buy" and "sell" suggestions. These signals are based on either technical or fundamental analysis. These trade signals include entry and exit points, support and resistance levels, and the level of confidence in the signal.
However, it's important to note that IG doesn't create the signals themselves. Rather, they come from two third-party providers, Autochartist and Signal Centre.
Customization: Any forex platforms worth their salt will give you the option to customize your views to match your preferences. IG lets you switch between light and dark mode, use multiple workstations, and tailor your view with custom columns and watchlists. Whatever your trading style, IG has you covered.
Regulation.
IG is regulated by the Financial Conduct Authority (FCA), a UK-based supervisory body. The company is also publicly traded, and with a 45-year history, IG tops our list as one of the best overall brokers on our forex broker list.
For U.S. traders, IG is registered with the Commodities Futures Trading Commission (CFTC) and is a member of the National Futures Association.
Fees.
In addition to being highly regulated in the online trading world, IG boasts some of the best spreads, starting at 0.8 pips and zero commissions for spread betting. As a refresher, a pip is a “percentage in point,” and one pip is one one-hundredth of a percent.
If you’re looking for the best all-around web platform for forex traders, you may want to consider IG. We believe this is true whether you’re among advanced traders or your journey is just beginning.
Suitable for beginner or experienced traders Free demo account to test-drive the IG platform $250 minimum deposit when opening an account Over 17,000 markets available to trade Award-winning trade platforms that are easy-to-use Mobile trading apps for the ultimate trading experience Regulated broker with over 45 years of experience Extensive training materials available via the IG academy.
#3. Etoro: Great for Copy Trading.
Launched in 2007, eToro focuses on the cryptocurrency markets, but that doesn’t mean forex traders can’t use it. Though most of the features are comparable to the best forex brokers, where eToro shines is with its copy trading feature.
With CopyTrader, you can directly copy expert traders’ strategies, trades, and portfolios. This feature alone has resulted in more average profitwhen users copied the most popular advanced traders.
In addition to being able to trade 40 global FX pairs, eToro’s CFD (contracts for difference) platform allows access to commodities, indices, stocks, and, of course, cryptocurrencies. Trading CFDs allows you to trade solely on the price movements of various financial markets and instruments without having to own the underlying asset. This strategy can allow you to gain capital quickly, while minimizing trading costs.
Instead, you pay a small percentage of the asset price (called trading on margin), and you can make a profit (or take a loss) depending on the asset’s price direction. This strategy is how experienced traders can make massive gains by taking advantage of leverage. The other forex brokers on our list also offer CFDs.
Trading Platform Overview.
With an intuitive interface, the eToro platform can be easy to use for forex traders of all levels. You can view an asset’s performance at a glance, and there’s even an app to trade forex from a mobile device. The platform is accessible from 140 countries, though the exact features and available markets will vary based on your location.
Key Features.
eToro has most of the basic features that you’ll find with most online brokers, including some of these favorites:
Spreads for forex pairs as low as 1 pip: Keep in mind that spreads fluctuate. 1 pip is the minimum only. Trading costs could be higher based on a variety of factors.
Flexible leverage: If you love liquidity, you’ll love eToro’s lack of restriction on trading CFDs with leverage.
Robust regulation: eToro is currently regulated in three jurisdictions. Two of them are tier-one, and one is tier-two. For reference, tier-one is the highest trust jurisdiction and includes independent bodies in the United States, Canada, UK, Australia, etc.
Tier-two is an “average trust” jurisdiction with regulatory agencies in China, Israel, Ireland, and others. The tier-one regulators that have authorized eToro as a forex broker are the Australian Securities & Exchange Commission (ASIC for short) and the Financial Conduct Authority (FCA).
Large community: With more than 10 million users, you can interact with and learn from other active traders all over the world.
Great for beginners: The user-friendly interface, together with the social trading aspect of the platform, is an ideal combination for new forex traders just getting initiated into currency markets.
Multiple membership levels: You can sign up with this forex broker as a VIP and get access to a dedicated account manager, exclusive signals, and assets that aren’t available to other members.
Though not known for its forex trading capabilities, eToro is still a solid platform, and it is a great choice if you’re also an avid cryptocurrency trader.
#4. Plus 500: Best for Trading CFDs on Forex.
Plus500 is one of the UK’s top trading platforms, and it is the largest CFD provider across Europe, particularly in the UK, Germany, and Spain.
With Plus500, investors of all skill levels can start trading CFDs for a variety of instruments, including stocks, indices, cryptocurrencies, ETFs, options, and forex currency pairs. Though you can use Plus500 to trade the actual instruments, the focus is primarily on CFDs, so it’s best for traders who want to work in this arena.
As a reminder, with CFDs, you don’t actually own the stock, commodity, or currency. Instead, you’re betting on the direction that the price of the asset will move and collecting a profit or sustaining a loss based on the accuracy of your prediction.
Trading Platform Overview.
The Plus500 interface is clean and fairly intuitive, so you may feel comfortable navigating it whether you’re a beginner or a forex pro. There is an Android app available for mobile trading, and they recently launched an app for iOS and Mac. If you’re choosing the web application, Plus500 is compatible with Chrome, Firefox, Safari, and Internet Explorer browsers. Keep in mind that the web app is not available in the United States.
To run Plus500’s Windows 10 Trader platform natively, you’ll need a device that runs Windows 10 or higher or an Xbox One.
Plus500 also offers a free demo account, so you can experiment with different trading strategies without putting any of your own money at risk or incurring any trading costs.
Key Features.
Access to global markets: Plus500 currently gives traders access to over 2,000 financial instruments, and the list continues to grow.
More than 60 forex pairs: Plus500 makes our list as a best forex broker option because they offer more currency pairs than most platforms, including exotic forex pairs like EUR/TRY and GBP/ZAR. Plus, the common currency pairs like EUR/USD are also available.
Stop limits and guaranteed stop losses: Take control of your trading without having to sit at your trading terminal into the wee hours. Set automatic stop limits and losses to get peace of mind while locking in profits with this forex platform.
Trailing stop: Exercise even more control over profits or losses with a trailing stop. This feature adjusts your stop loss as the price of the asset fluctuates. As a result, you can both lock in profits and minimize losses.
Negative balance protection: If the markets make an unpredictable swing in the wrong direction, you’ll avoid incurring a negative account balance.
Alerts: Customize your alerts to be notified whenever something of interest happens. Get alerts for price movements, percent changes, and a shifting trader sentiment.
From a regulation perspective, the company is both authorized and regulated by the Financial Conduct Authority (FCA) for offering CFDs (contracts for difference).
Overall, this online trading platform is intuitive to use and well-suited for all levels of traders, including beginners. With market spreads as low as 0.6 pips, fees are very fair. There are no actual trading fees other than the spread. One thing to note, however, is that you’ll incur a monthly $10 inactivity fee if you go three months without trading.
#5. Forex.com: Highly Rated Forex Trading App.
With brand name recognition (especially as part of StoneX), Forex.com is a popular choice and often one of the first forex trading platforms that investors look to. As an online broker that’s publicly traded on the NASDAQ, Forex.com is highly trusted in the industry. They’re also the most regulated, with four tier-one jurisdictions under their belt.
U.S.-based users also flock to Forex.com for its longevity (around since 2001) and the high number of currency pairs available. At publication, Forex.com offers more than 80 FX pairs. They also offer the ability to trade gold and silver, as well as futures and futures options. In some countries, you can use Forex.com to trade cryptocurrency and other assets, but this feature is not currently available in the United States.
Though Forex.com doesn’t boast the lowest prices, they do offer flexible and competitive fees, based on five different levels, ranging from standard to pro. A typical spread for most forex pairs is 1.3 pips and sometimes higher than 2, though one-pip trades are available for some pairings. In ultra-favorable conditions, the spread can be as low as 0.77 pips.
Trading Platform Overview.
Forex.com recognizes that there are nearly as many different types of traders as there are trades that can be executed. For this reason, you’ll be armed with every platform imaginable, including Forex.com’s web-based platform and MetaTrader4. Ninja Trader is an excellent trading platform that’s also available. Mobile functionality is also an option.
One of the reasons Forex.com is on the list of best forex trading platforms is that you can use advanced charting tools by TradingView to view more than 10 different types of charts, including 14 timeframes and dozens of drawing tools.
Key Features.
High trade execution: Thanks to pricing supplied at the speed of light, traders are able to get real-time views of actual pricing. This gives traders confidence that the price they specify in their order will be executed.
Fast transactions: Close to 100% of trades are executed in less than a second.
Platform options: From Forex.com’s proprietary trading platforms to MetaTrader, Ninja Trader, and more, you’ve got a powerful suite of tools at your fingertips.
Advanced charting tools: Find your secret trading weapon by utilizing Forex.com’s professional-level chartingfunctionality. Choose your own chart type (including candlesticks, lines and bars, and more), compare multiple timeframes, and use over 60 indicators and drawing tools to detect patterns and uncover trends. There’s even a Compare feature that allows you to overlay multiple markets for even more money-making insights.
Free 30-day demo account: You can try before you buy, while also testing out your trading strategies and ability to use technical analysis tools. The demo account from this online broker is free and available for 30 days.
As a publicly traded company with the most name recognition, Forex.com is a great place to begin your trading journey and hone your skills. Just make sure that the tools and trades you want to use are available in your region.
#6. Interactive Brokers: Reputable Brokerage With Good Reviews.
Interactive Brokers, or IBKR for short, gives global access to traders who want to invest in stocks, bonds, options, futures, and currencies. So, whether you’re a forex trader or you’re exploring Bitcoin, Interactive Brokers is potentially well-suited to your needs.
Trading Platform Overview.
This platform has gotten numerous accolades from Investopedia, Nerdwallet, Barron’s, and Stockbroker.com. One of the reasons for the widespread popularity is that the platform was built with the needs of a professional investor in mind―without forgetting to include the usability features that a novice will appreciate.
The platform includes a front-facing client portal that gives a trader insights into their portfolio at a glance. There’s also a Trader Workstation that provides power and flexibility to execute trades across multiple asset classes. At last count, you could execute 20 different order types.
And, of course, being in the 21st century, there’s gotta be an app. IBKR also has APIs that you can access to build custom trading applications.
Key Features.
Free trading tools: Become a better trader by testing out IBKR’s free tools.
Comprehensive reporting: Get an in-depth view of all the data. Not only do you get the basics of trade confirmations in real-time, but you’ll also see details about margins, transaction costs, and more. As you get more trades under your belt and build your portfolio, you can also use the portfolio analysis tool for even more insights.
Flexible trading strategies: Execute any type of order imaginable and get some hand holding along the way.
Advanced research tools: It’s not uncommon for a platform to offer plenty of real-time data but leave you in the lurch when it comes to doing research and identifying new opportunities based on past data. Interactive Brokers has some of the most comprehensive research tools available and caters to both beginning and advanced traders.
Educational content: IBKR believes in the idea of no trader being left behind. Therefore, there’s tons of educational material and content to indoctrinate you into the world of trading and make you the best possible trader. After all, the better you do, the better IBKR can do.
From a regulatory perspective, we see IBKR is about as trustworthy a forex broker as you can get, with licenses in a whopping six tier-one jurisdictions. High-volume traders will appreciate that there are no spreads, but you will be subject to commissions based on your transaction size.
There are also fees involved if you’re not an active trader or your account doesn’t incur any commissions. For this reason, IBKR is recommended for those committed to trading regularly and with decent volume. This is especially true given the minimum deposit requirement of $10,000. There are exceptions to this $10,000 rule depending on where you reside and how old you are.
#7. CMC Markets: Regulated Broker for Currency Trading.
CMC Markets is credited with the first ever online forex trade back in 1996 using the platform’s proprietary MarketMaker software.
The first office sprang up in Sydney, Australia, and the company now has locations in New York and Toronto. Currently, Goldman Sachs has a 10% stake in CMC Markets.
Traders can execute trades via CFDs and spread betting. Though the spread will vary, it is highly competitive. On average, a trader can count on a spread of 0.8 pips or something within that range. Using CFDs and spread betting, forex, indices, cryptocurrencies, commodities, shares, share baskets, and treasuries can all be traded.
Platform Overview.
Conscious of the vast diversity in experience levels among traders, CMC Markets offers one of the best forex broker platforms that’s both intuitive and powerful. You can choose from more than 70 chart patterns and a dozen types of charts. Overlay your charts with 115 technical indicators and drawing tools for maximum levels of insights.
Perhaps one of the coolest options is a price projection tool, which is part of the pattern recognition suite. There’s also the option to view client sentiment to see how other traders feel about an asset in real-time.
All of these features are available on any device, including iPhone and Android devices. Further, you can also access MetaTrader 4 (MT4) seamlessly.
Key Features.
Accessibility: Gain access to CMC Markets’ trading platform using virtually any web browser.
Transparent trading: From your trading view, you can clearly see level one and level two pricing and estimated margins.
More than 100 technical indicators: Go deep in your research by accessing 115 technical indicators. While other platforms may be limited to a few dozen, the sky’s the limit with CMC Markets.
Pattern recognition: You no longer have to rely on your intuition or homemade charts when detecting patterns. CMC Markets has a built-in tool at the ready for trading CFDs and currency pairs.
Award-winning apps: Many forex traders face limitations when it comes to the functionality of a mobile app. The offering from CMC Markets, however, has unprecedented functionality, and the company has won numerous awards for its app.
Over 300 currency pairs: With more than 330 currency pairs at the time of publication, we challenge you to find a pair that you can’t trade.
Depending on where you are in the world, CMC Markets is regulated by either Bundesanstalt fur Finanzdienstleistungsaufsicht (BaFin) or the Financial Conduct Authority (FCA). To keep your money secure, the company segregates funds and abides by strict custody requirements. Your funds will be kept secure in distinct money accounts that have been separated from CMC’s assets.
The banks that hold your funds are considered reputable, though some of the rules that CMC Markets has to abide by can mean that you’ll need to give advance notice if you want to withdraw funds and access them right away.
#8. Saxo Bank: Great Selection of Advanced Trading Tools.
With the mission of placing “the world at your fingertips,” Saxo Bank offers 40,000+ different financial products and easily makes our list of top forex brokers. To help alleviate confusion from this plethora of choice, Saxo Bank also gives clients access to educational tools and informational products to enrich knowledge (and wealth).
This forex broker is fully licensed and regulated as a European bank and supervised by the Danish FSA. They’ve been under this directive since 1996 and maintain good standing.
Trading Platform Overview.
Saxo Bank offers a variety of advanced trading platforms to suit the needs of any trader. Their proprietary trading platform, SaxoTraderGO allows traders to view and trade all of Saxo Bank’s available asset classes, including forex currency pairs, stocks, bonds, mutual funds, options, futures, cryptocurrencies, and leveraged products (such as CFDs in some regions). Further, the interface can be accessed via both mobile and desktop.
For more professional traders, there’s SaxoTraderPRO. This platform gives traders the option to graduate from one screen to six screens. It also allows for algorithmic ordering.
In addition to using Saxo Bank’s trading platform, you can also expand your trading options by adding third-party tools and their API.
Key Features.
“Ultra-competitive spreads”: Saxo Bank is one of the few forex brokers that boasts a spread of 0.6 pips on major forex pairs.
Variable pricing: You can customize your pricing based on your account level. Choose from classic, platinum, and VIP. VIPs get the most competitive pricing.
Knowledge base: Learn how to trade CFDs like a pro by taking advantage of Saxo Bank’s collection of educational materials such as webinars and classes taught by experts.
Flexible trading platform: Instead of thrusting a beginner into the jungle or limiting an expert trader’s options, Saxo Bank gives users the choice of either a standard or advanced trading platform.
Access to MetaTrader: If you prefer not to use SaxoTraderGO or PRO, MT4 is an option. However, it does come with an additional fee.
Though there are relatively high minimum deposits, Denmark and Norway residents can create an account with no money down.
What Is Forex Trading?
If you’ve ever traveled abroad and had to exchange your native currency for money to spend locally, you’ve already done some forex trading.
Short for “foreign exchange, forex trading is the practice of exchanging one form of currency for another.
The price of each currency will fluctuate based on the law of supply and demand. For example, if you exchange a high volume of Canadian dollars for U.S. dollars, the Canadian dollar will drop in value to reflect its corresponding decrease in demand.
On the flip side, the price of the U.S. dollar would rise relative to the Canadian dollar (and other currencies) because more people want to purchase or hold it. It is this theory of basic economics that drives forex trading.
Because there’s a constant stream of trades being executed, the price of a currency (also referred to as its exchange rate) will be in a state of constant flux. Traders use forex trading platforms to profit from these currency fluctuations.
For example, let’s say you buy €1,000 worth of Euros with U.S. dollars, and you’d like to profit from this purchase. You would hold your Euros and watch as the exchange rate goes either up or down. When (and if) the value of the Euro goes up, you can exchange the Euros back to dollars, making a profit in the process.
Simple, right? The trick to being a skilled forex trader is being able to time these transactions precisely while also having access to the right online trading platform to make your exchanges. As long as you have an Internet connection, you can theoretically access most forex brokers and trade from anywhere, potentially making money on your terms.
Further, the forex market is open 24 hours a day, Monday through Friday, so you can trade on a schedule that’s most convenient for you.
Things to Consider when Choosing a Forex Trading Platform.
Choosing the right forex trading platform is important, especially for beginners. Though there’s not a single best forex broker that will suit everyone equally, you can choose the best forex broker that’s right for you if you know what to look for. There are also some clear red flags that will help you avoid problematic forex platforms that are rife with scams.
We recommend evaluating the following:
Regulation.
This point is perhaps the most important one to research before choosing the best forex broker, so it’s the first one on our list. By regulation, we mean that the brokers are subject to federal regulations, and they’re being monitored by the local government to ensure that they’re in compliance with the rules.
We put a lot of emphasis on checking the forex brokers’ regulations because regulation is what will help keep your money in line. When a platform is located in an area without strict regulations, they can do all sorts of things with your money that aren’t in your best interests, including holding onto it or restricting your access to it. Don’t wait until you’re trying to withdraw your money before finding out that your forex platform doesn’t play by the rules.
U.S.- and UK-based forex brokers tend to be the most regulated, particularly when it comes to limiting the amount of leverage a trader can use. Though this relatively high level of regulation can be frustrating at times, it does offer protection to novice traders since leverage trading carries a ton of risk.
If you prefer a regulated platform to ensure some security but you don’t like the idea of restrictive limits on leverage, Australia-based platforms tend to be more lax in this area.
Keep in mind that forex brokers are not centrally regulated, but there are numerous governments and independent organizations that supervise trading. Forex brokers can become certified and licensed by these independent organizations to demonstrate their trustworthiness.
Trading Platform.
The trading platform itself will tend to be a matter of individual taste and preferences. Here, you’ll want to have a list of features that are non-negotiable and then make sure that the platforms on your short list have the features you prefer so you can choose the best forex broker for your needs.
Many platforms also include a wealth of free tools that can elevate your trading and give you an edge. From tooltips to additional views, there’s massive variation between what each online broker offers. You’ll also find that a broker may give you access to different platforms, and some have developed their own proprietary systems.
Another factor you’ll want to consider when looking for the best broker is the ease of use. Whether you’re a beginner or a forex trading pro, you’ll want a system that’s easy to navigate and trade on. If you’re spending hours a day on the platform, you should be able to enjoy the experience!
Fast Trade Execution.
When you place a buy or sell order, the trade isn’t executed instantaneously. There’s going to be a delay, often in milliseconds, but sometimes, it can be several seconds.
The speed of trade execution can be a double-edged sword. On the one hand, you want your trade executed quickly because it will be a more accurate reflection of your target price. In high-volume markets, the price can change several times per second. However, fast trade execution can incur additional fees. According to the SEC, the rule is that if a broker publicizes their trade execution speed and policy, they must follow it to the letter.
Minimum Deposit.
Most brokers will have a minimum deposit amount to get started. If you’re just getting your feet wet, look for a platform that allows you to begin trading without having to commit a lot of money first.
Costs and Fees.
Brokers make money in two ways―via spreads and via commissions. As you likely already know, a commission is a percentage of each trading transaction. A broker will take a small commission on each trade, whether you buy or sell. Look for competitive pricing, and don’t be afraid to shop around.
A spread is similar in that a broker gets a piece of the action. The difference, however, is that with a spread, the broker adds a small margin to the price to compensate them for their risk and the liquidity they’re providing you.
These transaction fees can vary widely, so it’s a good idea to compare prices before depositing your money. In addition to reading reviews (and our recommendations in this article), you can also get data by looking at each platform’s website to see what they list their spreads and commissions as.
Also, don’t forget to look for other hidden fees that some brokers tack on, including fees for inactivity or making withdrawals. There are also fees for holding overnight positions, referred to as a rollover rate, so if you plan on holding your position for longer periods, look for platforms that charge as little as possible here.
Assets to Trade.
While any FX trading platform will have an extensive range of forex pairs, if you’re a diversified trader, you might be looking for more. Many platforms will also give you the option to trade numerous asset classes, including stocks, cryptocurrency, commodities, CFDs, and more.
Still, even among FX trading platforms, there will be variations in the number and types of trading pairs available. If you’re interested in solely the majors like EUR/USD, any platform will do. However, if you want more obscure pairs, you might have to search around.
Demo Accounts.
Beginning forex traders and professionals alike can benefit from having a demo account. This allows you to use “paper” money to execute trades and experiment with different strategies in a simulated environment. It can be a good idea to get demo accounts on a few different platforms if you’re unsure which platform you plan to use long term.
Security.
Just as important as regulation is security. Look for both built-in security and options to use features like 2FA (two-factor authentication) to keep your account safeguarded against hackers and other malicious attacks.
Mobile Apps.
Mobile trading can be massively convenient, so make sure that if mobile access is important, your preferred platform offers it. Keep in mind, though, that the features offered on mobile tend to be less robust than desktop access.
Who Is the Best Broker for U.S. Traders?
Hands down, our number one choice for the best forex broker for U.S. traders is IG. With low 0.8 pips for forex pairs like EUR/USD and an intuitive trading platform, IG is one of the leading forex brokers in the industry. The only catch is that IG accounts can’t be formed by residents of Ohio, but the other 49 states have the green light, so IG still ranks on our list as the best overall forex broker.
Whether you’re a beginner or a pro, IG has plenty of support available. There are free online courses, and you can also attend on-demand webinars and seminars. In addition to having access to multiple trading platforms, you can access one of the largest selections of FX pairs for U.S. traders through IG and trade on leverage.
Are Forex Brokers Reliable?
There are countless horror stories of scam forex brokers. However, if you do some preliminary research, you can be matched with a reliable forex broker and avoid having your money stolen from under your nose.
If you choose a forex broker on our list of the best forex brokers, you’ll be in good hands. If you decide to look elsewhere, take a look at the next section to know what to watch for in a good forex broker.
Tips for Choosing a Good Forex Broker.
One of the first things to look for is whether your forex broker is authorized in your region. If you can’t access a trading platform due to a geographical restriction and you don’t have a VPN, then you’ll want to steer clear of depositing any funds.
Other tips:
Make sure your broker is accessible. If they’re overseas, they might not have customer service hours that are compatible with yours. Being able to access your broker quickly is vital.
Read customer reviews. One of the best ways to see if a broker is legit is to read what other people say. Look for keywords in a Google search such as + or .
Start small. If you’re not sure if a broker is legitimate, you can test the water with a small deposit and then make a withdrawal. Specifically, you want to make sure that you can get access to your funds quickly.
If your broker is executing trades on your behalf, make sure they’re in line with your objectives. An unscrupulous broker may only make trades that suit their best interests, not yours.
How Can I Tell if a Forex Broker Is Regulated?
Checking the regulation status of a forex broker is a little different than checking up on a standard bank. Unlike banks and other financial institutions, forex brokers aren’t regulated by the SEC, FTC, etc., though if they are based in the U.S., they could be subject to regulations regarding their marketing.
The best way to confirm whether a forex broker is regulated is to check the About Us section on the brokerage firm’s website. From here, they will list any relevant regulations and licenses they hold.
You can also verify a license through a third-party site. U.S. traders can go to cftc.gov (Commodity Futures Trading Commission) for verification. Another option is to contact the company directly to confirm their status and ask for supporting documentation.
Understanding Forex Spreads and Fees.
If you’re new to the forex markets, you’ll encounter some foreign terminology. One of the most common terms you’ll hear is the spread. Put simply, the spread is the difference between the rate at which the forex broker sells the currency and the rate at which you buy it. Forex brokers pad these buy and sell prices with a small percentage, called a pip, to make a profit.
The fee is typically defined as the difference between the bid and offer price in forex. Fees in forex can also be a commission or withdrawal fee, depending on how the broker chooses to make profits. And finally, you could also incur fees in forex trading if you hold positions overnight. Often, positions are opened and closed in a matter of hours, though longer-term holds are also possible.
What Is the Difference Between a Forex Broker and a Market Maker?
The main difference between a forex broker and a market maker has to do with their role. You can think of the broker as a middleman or an intermediary. Their role is to connect you with a buyer or seller to execute a trade.
A market maker, on the other hand, is the party that helps set the price. The market maker evaluates how many people are trying to buy and sell positions and at what price. The market maker helps balance and match these different positions so that the trade can be executed. They’re said to be the liquidity providers in a market. However, market makers may also buy and sell securities, which could be a conflict because they are the ones setting the bid-ask spread.
The Bottom Line – Is Forex Trading Right for You?
According to Investopedia, forex trading has a possibility to make you “rich,” but it’s not an easy path, and it takes skill. Often, forex traders are associated with gamblers, but our truth is that there’s plenty of money to be made if you do your homework and act rationally instead of emotionally. While 68% of forex traders sustain losses, that means that a third of them can be wildly successful.
One of the reasons for the massive flux in success levels has to do with leveraged trading. Though the leverage concept can pay off big time, it’s also vital to understand that leverage can work both ways.
The content in this article isn’t meant to be construed as investment advice, but there are plenty of opportunities to amass wealth through forex trading if you take a systematic approach and learn how it works before becoming extremely leveraged. A demo account is a fantastic way to start the learning process.
If you’re willing to put in the time and learn the correct way to execute trades, you can have success in this environment.
*This article is provided by an advertiser and not necessarily written by a financial advisor. Investors should do their own research on products and services and contact a financial advisor before opening accounts or moving money. Individual results will vary. Foreign companies and investment opportunities may not provide the same safeguards as U.S. companies. Before engaging with a company, research the laws and the regulations around that service, and make certain the company is in compliance. For comprehensive guidance on U.S. investments and financial regulations, visit the Securities and Exchange Commission (SEC)’s Investor.gov.
