Top 8 Forex Brokers Evaluated for Pros, Cons, Plans & Prices
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The forex market, also known as forex or FX, is the busiest financial market globally. Trillions of dollars in currency are constantly moving worldwide, operating 24 hours a day and five days a week. In this highly active environment, traders can make or lose fortunes quickly. Brokers often allow traders to leverage large amounts of capital for their speculative activities.
To participate in this dynamic market, finding a broker specializing in currency trading is essential. While many well-known stock trading platforms don’t offer this service, some brokers focus specifically on forex markets. Evaluating a forex broker requires different criteria than assessing a stock broker due to the unique nature of the forex markets versus stock markets.
8 Best Forex Brokers
- IG – Best Forex Broker Overall
- eToro – Best for Copy and Crypto Trading
- Plus500 – Best for Mobile Users
- Interactive Brokers – Best for Professionals
- CMC Markets – Best Platform Technology
- Saxo Bank – Best Web-Based Trading Platform
- Public.com – Best for Affordability
- XTB – Best for Research and Education
IG – Best Forex Broker Overall
IG Group, established by Stuart Wheeler in 1974 as the pioneer of spread betting firms worldwide, is a component of IG Group Holdings plc, a publicly traded entity listed under LSE: IGG. Unlike most brokers, IG accommodates forex traders from the United States. It was made possible when they re-entered the US market in early 2019.
Read more: Best USA Forex Brokers
On a global scale, IG caters to individuals who wish to trade CFDs and foreign exchange markets. It’s as straightforward as that. The company adheres to a successful adage, “Go big or go home.”
With competitive low costs for spreads, emphasis on customer service and education, practical research techniques, and user-friendly interfaces, this broker is well-suited for online forex brokerage competition.
- Wide array of services available
- Welcomes clients from the United States
- Regulated by the FCA (U.K.) and CFTC, NFA (U.S.)
- Prioritizes education and research
- Provides security for client accounts in the U.K. and E.U.
- IG platform lacks copy trading or back-testing integration
- Elevated fees associated with share-CFDs
eToro – Best for Copy and Crypto Trading
eToro is an expert in social trading, a perfect fit for newcomers who want to learn from skilled traders with a successful history. Aside from its top-notch social trading network, this brokerage also offers exceptional educational materials for those starting out in forex.
Their user-friendly platforms and apps for multi-asset and social trading are accessible to anyone right away. Regrettably, they don’t provide support for the MetaTrader 4 and 5 (MT4 and MT5) trading platforms.
- The platform is intuitive and easy for users
- Use the CopyTrader feature to mimic the strategies of experienced traders
- Access a virtual dummy account with $100,000 for trade practice
- Explore advanced trading features through the mobile app
- Elevated non-trading fees
- Absence of crypto-to-crypto trading pairs
- Customer support requires enhancement
Plus500 – Best for Mobile Users
Plus500, a European-based derivatives broker, specializes in offering CFDs (Contracts for Difference) to a wide range of traders, particularly those who are more advanced or prefer mobile trading. The platform provides comprehensive information on the assets available for investment and allows you to purchase CFDs to diversify your portfolio quickly.
For beginners, there’s an option to practice using demo accounts before diving into the real trading experience. However, Plus500 may offer fewer educational resources than some other platforms. As a result, new traders might want to explore alternative options, while experienced traders can take advantage of Plus500’s unique assets and maximize their profits.
- Accessing both sides of the forex market
- Advanced traders encounter no hindrances when signing up and diving into their work
- You might perceive CFDs as too intricate for you to handle
Interactive Brokers – Best for Professionals
Interactive Brokers is recognized as one of the most well-capitalized non-bank brokers for traders and investors in the United States. They offer an extensive range of assets, covering 135 markets across 33 countries in 23 different currencies, making them a leader in the industry.
Their product and service offerings meet the needs of many clients, from individual accounts to retirement planning and asset management, including algorithmic portfolios. For trading fees, Interactive Brokers consistently ranks among the lowest in the industry.
One area where Interactive Brokers excel is their cutting-edge trading platforms. Their flagship platform, IB Trader Workstation, supports algorithmic trading and provides advanced features for traders. They have a Robo portfolio unit called Interactive Advisors that allows traders access to portfolios with as little as $100.
- Many features available
- Abundant educational services
- Excessive information
- Absence of bonuses or promotions reference
CMC Markets – Best Platform Technology
Founded in 1989, CMC Markets (CMC) is a reputable and publicly traded forex broker hailing from the United Kingdom. Over the years, they have successfully navigated through the ever-evolving landscape of online brokerage. CMCX is their ticker symbol on the London Stock Exchange (LSE).
CMC Markets caters to a wide range of traders, accommodating beginners new to online trading in forex, CFDs, and spread betting and experienced professionals seeking diverse investment opportunities. Their fees are competitive compared to others in the industry.
- Diverse array of services
- Regulated by the FCA (U.K.)
- Focus on education and customer service
- Cutting-edge research facilities in the industry
- Provides security for client accounts
- Doesn’t welcome clients from the United States
- Variances between Next Generation and MT4
- Elevated CFD spreads for specific indices
Saxo Bank – Best Web-based Trading Platform
Founded in 1992, Saxo Bank Group (Saxo Bank) is a prominent FinTech specialist that facilitates investment opportunities in global capital markets. It emerged as one of the earliest online trading platforms back in 1998. Operating through its subsidiary Saxo Capital Markets U.K. Ltd (SCML), Saxo Bank has been actively present in the United Kingdom since 2006.
Catering primarily to experienced traders, Saxo Capital Markets provides a range of brokerage services tailored for sophisticated investors, professionals, and institutions. However, individuals with smaller accounts may find themselves dissatisfied due to higher minimum account requirements, multiple fees involved, and limited customer support alternatives available.
- Broad spectrum of services
- Regulated by the FCA (U.K.)
- Research specifically focused on Forex
- Exceptional user interface
- Provides security for client accounts
- Limited focus on customer service
- Complex instrument fee structures
- Ineligible for U.S. clients
- Absence of MT4 platform
Public.com – Best for Affordability
Established in 2019, Public is a financial services company based in New York City. It was co-founded by Jannick Malling and Leif Abraham, offering a fractional mobile and web investing platform. As a regulated broker-dealer, Public ensures that each account’s securities are protected up to $500,000.
Public is an intuitive, commission-free stock trading app designed specifically for novice investors. Its aim is to cater to individuals who find investing daunting due to limited financial knowledge, restricted access to expensive financial products, and the high prices of shares that demand substantial investments.
Recognizing these barriers, the Public has created an inclusive solution that grants more people access to the stock market.
- Permitting fractional shares
- Social media aspect fosters investor connections
- User-friendly mobile app
- Absence of payment for order flow
- Restricted account options
- Narrow investment choices
- Constrained features
XTB – Best for Research and Education
Inaugurated in 2002 as the inaugural leveraged foreign exchange brokerage firm in Poland, X-Trade transformed into X-Trade Brokers by 2004 to comply with new regulations set by the Polish government. Subsequently, in 2007, the company debuted on the Warsaw Stock Exchange under the ticker symbol XTB and modified its name to XTB Online Trading (XTB) in 2009.
For traders seeking cost reduction, whether it pertains to trade placement fees (bid/ask spread) or eliminating additional expenses such as wire fees, XTB proves to be a reliable option. The maximum leverage XTB offers is up to 500:1 for non-U.K. accounts and up to 30:1 for U.K. accounts.
With an emphasis placed on customer support, this firm also provides valuable educational resources and research facilities that cater well to novice traders.
- Competitive FX spreads
- Regulated by the FCA (U.K.)
- Ensures security for client accounts
- Prioritizes customer service
- Ineligible for U.S. clients
- Elevated costs for non-FX spreads
Our Ranking Methodology for the Best Forex Brokers
To compile our list of top forex brokers, we assessed them based on three primary criteria:
- Wide Range of Forex Pairs: We assessed the availability of a wide range of forex pairs for trading among brokers.
- Competitive Spreads: We scrutinized the competitiveness of the spread rates they provided, ensuring favorable trading conditions.
- Low or Zero Commission: We considered whether brokers imposed minimal or no commission fees.
In our evaluation, we also considered additional aspects like including spread betting and contracts for difference (CFDs) in forex trading. We looked at the option to use third-party platforms such as MetaTrader and TradingView.
Thorough research was conducted to assess the caliber of customer support, accessibility of educational resources, and associated fees. We carefully examined key performance indicators, including average execution speed and success rates.
Regarding regulatory compliance and dependability, we ensured the broker is authorized by the Financial Conduct Authority (FCA), which is the UK’s financial regulatory body. Customer complaint data obtained from FCA reports was analyzed to evaluate the track record of each broker.
Best Forex Brokers – Buyer’s Guide
What Is a Forex Broker?
Retail forex brokers are financial institutions that serve as a middleman between individual traders and the foreign exchange market. These brokers have an online presence through their official websites, catering to small-scale traders who want to engage in margin-based currency trading.
Online forex brokers typically allow traders to execute currency deals using their supported electronic trading platforms. Alongside their proprietary software, many brokers also support well-known third-party platforms like MetaTrader 4 and 5 (MT4/5) developed by MetaQuotes.
Certain forex brokers offer valuable educational resources for beginners looking to enhance their understanding of trading. They provide access to expert analysis of the forex market and financial news feeds that help make informed trading decisions.
Trading bots can be worth exploring if you opt for a forex broker who uses automation. These AI-powered programs employ current data to make trades on your behalf, and each bot operates with a specialized trading strategy to maximize your profits.
It’s crucial to note that these bots aren’t infallible, though. To achieve the best possible outcomes, you must conduct thorough research upfront, establish a budget, and regularly monitor account activity.
Why Trade Forex?
Engaging in a forex transaction involves buying one currency while simultaneously selling another at an exchange rate, commonly called an exchange rate. Forex traders can profit by purchasing a currency pair when it’s low and then selling it when the price rises or by short-selling a currency pair when it’s high and repurchasing it at a lower price.
Forex trading appeals to many individuals because it’s easy to get started. All one needs to do is open up a trading account and download MetaTrader, which provides access to free forex trading platforms. This allows traders the flexibility of quickly entering or exiting positions, setting their own pace for trades, and earning profits based on their individual goals without feeling overwhelmed by complicated assets.
Forex Pros and Cons
The foreign exchange market has unique pros and cons for traders, including those listed below.
- High leverage: Using leverage in foreign exchange trading enables the control of substantial positions with a relatively small margin deposit, as the exchange of currencies at the prevailing market rate has no net value. While this amplifies risk, it also allows for potential gains from modest fluctuations in exchange rates.
- High liquidity: The forex market, being the world’s largest financial market, boasts significant liquidity in major currency pairs. This high liquidity facilitates the execution of sizable transactions in these pairs at virtually any time during regular trading hours.
- Around-the-clock trading: The forex market operates 24 hours a day, from 5 p.m. EST on Sunday to 5 p.m. EST on Friday, including U.S. holidays. This continuous availability creates consistent trading opportunities for market hours.
- Fewer asset choices: Unlike the many stocks available for trading, forex traders have access to a relatively small number of currency pairs, and not all of them are highly liquid, particularly among the majors.
- Volatility: The forex market is susceptible to significant movements as participants assimilate new information. This volatility introduces the potential for traders to experience unexpected gains or losses.
- Unregulated OTC market: The Interbank forex market operates over the counter (OTC), lacking extensive regulation. Various jurisdictions have implemented rules to safeguard retail traders engaging in transactions through online brokers.
Forex Markets Explained
In the forex market, traders agree to exchange one currency for another to conduct transactions at a specific exchange rate. Like stock prices, this rate fluctuates based on supply and demand factors and future expectations within the forex market.
There are two ways in which forex traders can profit from currency transactions.They will earn a profit if they purchase or go long on a currency that increases in value compared to the currency being sold. If they sell or go short on a currency that decreases in value compared to the money being bought, they will also generate profit.
Many currency pairs quoted within the forex market exhibit significant volatility or fluctuations. These fluctuations can lead to either gains or losses for traders.
It’s possible to analyze the performance of the EUR/USD pairing over various periods such as weeks, months, years etc., providing valuable insights into its historical movements and allowing for comparisons with current events occurring within the U.S. or European Union.
As you engage in the process of comparison, it becomes evident that the correlation between the pairing shifts in opposition to the news you’re consuming. As your reading progresses, you learn how to predict the direction currencies will take by analyzing present circumstances.
Risk and Reward in Forex Trading
In forex trading, rewards are obtained by taking a position in a currency pair that increases in value. However, a high level of risk is involved if the market doesn’t perform as expected after executing a forex trade.
Many brokers offer leverage to traders, allowing them to amplify their gains or losses on a position. Power is typically represented as the ratio between the size of the place and the margin deposit required to control it. For instance, with a 500:1 leverage ratio, you can own a $500 position with just a $1 deposit as a margin.
Successful traders often have specific risk/reward ratios that they consider before entering trades. These ratios could be 1:2 or 1:3, for example. To illustrate this, let’s say you believe that there’s an equal chance of making 20 pips or losing 10 pips on a trade. This would cause a risk/reward ratio of 1:2 for that particular trade. If this meets your predetermined risk/reward ratio criteria, then it may be worth executing.
How Do I Start Trading Forex?
Before anything else, it’s crucial to conduct thorough research. Novice investors can take advantage of the vast array of educational resources and research materials on trading platforms and websites. After this, it’s recommended to compare different forex brokers and pick one that matches your requirements for trading before starting your account. The next step involves devising a strategy for conducting trades in the forex markets.
Last but not least, you need to open your first position, monitor its performance closely, and then close it out when necessary. You will have successfully transitioned into a skilled forex trader by following these steps diligently.
How Much Money Do I Need to Begin Forex Trading?
Many times, you can start with a mere $100. However, forex transactions are conducted using standard lots of 100,000 currency units. Hence, it might cause an investment beyond $100.
What Types of Assets Can I Trade?
Forex brokers offer a diverse selection of products, and it’s essential to select one that offers a broad range of tradable options. These can include currency pairs, indexes, commodities, shares, cryptocurrencies, etc. Choose a broker with an extensive offering in order to meet your trading needs.
How Do I Know if My Forex Broker Is Regulated?
Ensuring the regulation of forex brokers is crucial in upholding business standards and safeguarding clients. According to the Commodity Futures Trading Commission (CFTC), most scams involve individuals, products, or unregistered companies.
Therefore, if you’re involved in forex trading, working with a registered broker is essential. Luckily, determining whether you’re working with a registered broker is straightforward.
The CFTC plays a vital role in registering and regulating forex brokers. To become registered, brokers must meet specific financial criteria, and their personnel undergo background checks. These firms must adhere to conduct and disclosure requirements set by the CFTC.
To verify if a forex broker has been correctly registered, you can use the search tool on the National Futures Association website which operates under the supervision of the CFTC. Through this tool, you can access information regarding a broker’s registration status and their disciplinary or regulatory history, along with financial details. It’s important to be skeptical of any entity that lacks proper registration credentials.
What Fees Should You Be Aware of When Choosing a Forex Broker?
When selecting a forex broker to trade with, consider and review various fees. These fees fall into two categories: trading fees and non-trading fees.
These are fees charged for opening, closing, and holding a trade and include:
- Spread: It’s essential for the difference between the buy and sell prices of a financial instrument to be minimized. We perform a live spread test with each broker in our broker rating reviews. An industry-standard spread of less than 1.0 pip, with zero commission, is observed in EUR/USD. Refer to our guide for the top forex brokers offering the lowest spreads.
- Commission: The cost of opening and closing a trade should be minimal. We conduct a live fee test with each broker in our broker rating reviews. The industry average commission is $3.50 per lot per side on MT4 and MT5 and $3.00 per lot per side on cTrader.
- Swaps: The expense incurred for holding a leveraged or margined position overnight. The swap fee is determined by the disparate interest rates of the currency pair being traded and a markup from the broker.
To gauge the fees, you can use a demo trading account or start with a live account and make the minimum deposit. Another option is to consult the FX Empire website for broker reviews, where our team of analysts has already scrutinized the spreads on your behalf.
Some examples of non-trading fees include account maintenance, account inactivity, deposits, and withdrawals. It’s advisable to examine the fees associated with depositing and withdrawing funds to avoid unexpected high charges.
While some brokers advertise fee-free deposits, they may still impose withdrawal charges. This information can typically be found on the broker’s website or by contacting customer support.
What Is the Best Type of Forex Trading Account?
Many brokers provide different trading accounts, typically categorized as commission-free or commission-based, with lower spreads. This distinction arises from the various execution methods offered by the broker, such as:
- Dealing Desk: While less prevalent nowadays, it still exists. In this setup, the broker takes the opposing position to your trade, anticipating that a majority of their clients will incur losses.
- STP: Straight-through processing is now more widespread among regulated brokers. In this model, the broker channels your orders directly to their liquidity providers for execution at market rates. The broker usually applies a markup to spreads but rarely charges additional commissions. Explore the Best STP Forex Brokers, thoughtfully selected by FX Empire.
- ECN: Electronic Communications Network. In this arrangement, diverse liquidity providers and banks vie for your orders within an anonymous network. Since price quotes are directly sourced from the interbank market, these accounts typically feature the lowest spreads but usually involve a commission per trade. Refer to our guide on the Best ECN Forex Brokers.
Different account types may require varying minimum deposits. The higher the minimum deposit, the more favorable trading terms, products, and services are offered.
What Factors Should You Consider When Choosing a Leverage Level?
The popularity of foreign exchange trading has increased over the years due to the availability of CFD trading accounts. These ‘contract for difference’ accounts allow traders to use leverage to engage in long and short positions.
Leverage enables traders to open larger positions using a smaller deposit, which can enhance profits and amplify losses. For instance, with a leverage ratio of 1:30, it’s possible to open a position that’s 30 times the amount of capital invested. Only $1,000 is needed to initiate a $30,000 trade.
The specific leverage brokers offer depends on various factors, including client categorization (retail or professional) and the financial regulator overseeing their operations.
In 2018, the MiFID II European Market Act Directive implementation mandated Tier-1 regulators to impose a leverage restriction of 1:30 on retail clients who engage in foreign exchange trades. This was primarily done as many retail traders eroded their trading accounts by using excessive leverage ratios.
Suppose you’re classified as a professional trader. In that case, brokers regulated by Tier-1 authorities can provide increased leverage, potentially reaching up to 1:200 for forex trading. However, note that you might not receive the same level of protection that retail traders enjoy in this situation, such as negative balance protection.
Some brokers may promote leverage ratios of 1:1000 or even higher. These particular brokers tend to operate in offshore locations with looser regulations. It’s crucial to understand that Tier-1 regulators have implemented restrictions on leverage for retail traders for a reason. Therefore, exercise caution when encountering brokers who advertise extremely high levels of leverage.
Best Forex Brokers – Frequently Asked Questions
Can I Trade Forex With $10?
Although some brokers provide trading accounts with a minimum of $10 or even less, this amount is only enough to hold one micro position. However, to actively trade Forex, a larger sum of money is required.
What Is the ‘Spread’?
The discrepancy between the broker’s seller (or bid) price and their buyer’s (or ask) price is referred to as the forex spread. The broker’s profit margin is represented by spreads, which may vary depending on the currency and time of day.
For all currency pairs except for Japanese yen, spreads are measured in ‘pips,’ the fourth decimal place. For instance, if an investor traded GBP/USD at 1.2030/1.2032, the spread would be 0.0002 (2 pips), calculated by subtracting 1.2030 from 1.2032.
Brokers strive to provide competitive spreads on major currency pairs since a wider spread reduces potential earnings from a forex trade, resulting in increased competition amongst brokers offering low spreads on significant currencies.
Is Forex Good for Beginning Investors?
While forex trading may seem complex, novice investors can still broaden their investment portfolios by engaging in currency trading and other forex assets. It’s crucial to exercise caution and dedicate time to learning about the specific assets you intend to trade.
Many forex trading platforms offer a plethora of educational materials and research resources, so take advantage of these valuable sources of information.
In the rapidly evolving realm of forex trading, where time is of the essence, selecting a dependable broker can determine your financial triumph.
Whether you possess extensive expertise or are embarking on this endeavor, uncovering the finest forex broker is an essential stride on your path to success. It goes beyond mere spreads and trading platforms. Trustworthiness, security, and customer support are key elements.
This blog post will explore notable forex brokers within the industry. Our ultimate recommendation is IG, a choice that will provide you with ample information to make a well-thought-out decision capable of setting you up for profitable and gratifying trading adventures.