Best Forex Brokers 2020
Here you will find our best forex brokers of 2020 based on our findings from thousands of hours of extensive research, testing and in-depth analysis across hundreds of online forex brokers. It is vital to conduct some research when deciding if a forex broker is trusted and reliable.
The vastly experienced trading brokers team have conducted thorough forex broker reviews and assigned each forex broker with a rating based on our research. This can help to give forex traders a clear understanding of the different forex brokers available and save them time when choosing the best forex brokers according to their individual trading requirements.
To be listed in our best forex brokers category, each forex trading broker must be under strict regulation from a respected regulatory authority and well established. They should offer online forex trading services with industry leading trading conditions and competitive fees across major, minor and exotic FX currency pairs whilst providing a range of powerful online trading platforms and tools. In addition to this, the forex brokerage should supply traders with educational materials, tight spreads, good execution speeds, flexible leverage, various account types, multiple funding options and excellent customer support.
Top 5 Forex Brokers 2020
ASIC, BVI, CBI, FFAJ, FSA, FSCA
Min $100 Deposit
FCA, CFTC, NFA, BaFin, FINMA, ASIC, FMA, MAS, FSA, FSCA, DFSA, JFSA, METI, MAFF
Min $250 Deposit
ASIC, FCA, DFSA, SCB, CySEC
Min $200 Deposit
ASIC, CySEC, IFSC
Min $5 Deposit
Each of our chosen best forex brokers have successfully passed our stringent forex broker reviews and been awarded a top forex broker rating based on multiple factors to make it on our best forex broker list. These forex brokers are regulated by respected financial regulatory authorities and well-established within the online brokerage industry, providing top forex trading services to forex traders across the globe.
AvaTrade are one of the largest forex brokers across the globe, offering online forex trading services to over 200,000 clients since 2006. They provide very competitive online trading conditions and have won multiple awards over a number of years including “best forex broker” and “best trading experience”.
Primarily an online forex brokerage, AvaTrade offer more than 55+ FX currency pairs for trading online, this includes minor, major and exotic currency crosses. If you are interested in other markets, they also have one of the largest product ranges of any online broker with over 250+ instruments including forex, CFDs and cryptocurrencies.
Trading conditions are very competitive with tight spreads, no commissions and rapid trade execution speeds. Traders also get free trading tools and educational resources whilst the award-winning customer support team are excellent. Their huge sponsorship deals help to emphasis the power of the AvaTrade brand within the forex brokerage industry.
AvaTrade Platforms & Tools
AvaTrade give traders a choice of flexible and advanced trading platforms that can be used on desktop and mobile devices. There is the popular MetaTrader 4 (MT4) trading platform and the proprietary AvaTradeGO platform. These platforms are available to all traders and can be selected depending on your individual trading requirements.
Each platform provides traders with an enjoyable trading experience, presenting a variety of financial instruments across multiple markets, range of analytical tools, indicators and charts. They also offer clients a generous selection of trading tools along such as Autochartist along with automated and copy trading solutions.
AvaTrade Research & Education
AvaTrade provide a large selection of educational guides including free eBooks, webinars and video tutorials giving you plenty of forex trading knowledge all in one place and at no extra cost. As well as wide range of forex educational tools, AvaTrade provides an economic forex calendar, technical analysis, fundamental analysis and important market updates.
AvaTrade are an innovative forex broker with some of the latest technologies including Sharp Trader which is a trading academy that can be very useful to retail forex traders and DupliTrade which is a social trading platform where you can share trades and analysis with other forex traders.
AvaTrade Trading Accounts
AvaTrade have a standard trading account which requires a modest minimum deposit of $100 to take advantage of the excellent trading conditions that they offer. You can trade multiple trading instruments on the different platforms through one account.
Demo accounts are available free of charge where you can practice your trading strategies risk free by trading with virtual funds. This can help new traders familiarise themselves with trading online before opening a real account.
AvaTrade have Sharia compliant swap free accounts to cater for Muslim traders. Professional traders are also catered whilst there is the MAM (managed) account option for money managers and investors.
AvaTrade Account Funding
AvaTrade offer a generous selection of account deposit and withdrawal method to their clients including credit cards (VISA, MasterCard, debit), Bank Wire Transfers and E-Wallets such as Paypal, Skrill, NETELLER and WebMoney.
AvaTrade Customer Service
The AvaTrade support team is on hand to rapidly answer all of your questions 24 hours a day in 15 different languages. Support can be reached via phone, chat and email. There is always someone available to answer your questions as and when required.
AvaTrade is authorised and regulated across 5 continents by 6 regulatory authorities. This means that they must abide by strict regulatory rules. The impressive number of regulators include ASIC, BVI, CBI, FFAJ, FSA and FSCA. Trading with a regulated broker can give you peace of mind that you have some protection should something go wrong. Most professionals would only ever trade with a broker that has implemented regulation from respected regulators as AvaTrade have done.
AvaTrade are considered one of our best forex brokers for a number of reasons, primarily due to their award-winning trading services and strict regulation. They have plenty of liquidity which helps to ensure fast execution speeds and tight spreads. They offer commission free trading on multiple major and exotic forex currency pairs. There is a generous choice of user-friendly trading platforms for multiple devices along with trading tool, educational resources and market analysis.
Furthermore, they have quick and easy funding options to cater for different trader needs. You can read our full AvaTrade Review to find out more about why we consider them to be one of the best forex brokers.
|55+ FX currency pairs||No US clients|
|No commissions||Min $100 deposit|
|Fast trade execution speeds|
|Flexible trading platforms|
|Broad selection of trading tools|
|Multiple account funding options|
|Award-winning forex broker|
|Strict regulation in multiple jurisdictions|
IG are one of the biggest forex brokers in the world, offering a huge choice of over 16,000 tradable instruments from multiple asset classes, inlcuding forex, stocks, indices, commodities, cryptocurrencies, bonds, precious metals, energies and more. They are one of the few forex brokers who accept clients from the USA.
IG provides traders with a good selection of intuitive trading platforms, trading tools, and educational resources. They offer industry leading trading conditions with competitive trading fees, tight spreads and reliable trade execution speeds.
The IG Group is strictly regulated in multiple jurisdictions and listed on the London Stock Exchange (LSE). Founded in 1974, they have won multiple awards over the years.
IG Platforms & Tools
IG clients can choose from a range of powerful yet user friendly trading platforms, including their proprietary trading platform, ProRealTime (PRT), L2 Dealer, and the more commonly used MetaTrader 4 (MT4) platform. Professional traders can get direct market access via FIX API connectivity. Most of these platforms are available on multiple devices including desktop, web browsers and mobile devices for trading whislt on the go.
IG also have a vast array of additional trading tools to support traders with their daily activities. Some of the trading tools provided include trading alerts, trading signals, Autochartist, PIA-First, and automated trading tools.
IG Research & Education
IG has a large selection of research and educational resources in their IG Academy which are accessible by traders of all experience levels and can help to improve trading knowledge and skills. This includes interactive courses, videos, webinars, seminars, trading guides, trading strategy and glossary. The IG Academy App can be used for learning whilst on the go.
IG Trading Accounts
IG have a choice of trading accounts with a minimum deposit of $250 and different features to suit the needs of different traders. The account types offered by IG are as follows:
- IG Trading Account
- IG Professional Account
- IG Options Trading Account
- IG Turbo24 Trading Account
- Limited Risk Account
- Share Dealing Account
- Swap-free Account
- Exchange Account (NADEX)
- Islam-friendly Swap-free Account on request
- Demo Practice Accounts
IG Account Funding
IG support a variety of convenient deposit and withdrawal methods, including bank wire, credit or debit card, and online payment processors such as PayPal. This selection makes account funding quick and easy.
IG Customer Service
The broker’s customer support team can be contacted from Saturday 8 a.m. to Friday 10 p.m via email, phone, and online chat. The large and knowledgable team are happy to answer any general, account or technical questions that you may have, in a prompt and efficient manner. Support is offered in a wide range of languages.
IG is a brokerage brand used by many affiliates of the IG Group in different parts of the world, so they are regulated by financial authorities in many countries, including:
- The Financial Conduct Authority (FCA) in the UK
- The Commodity Futures Trading Commission (CFTC) and the National Futures Association (NFA) in the US
- Federal Financial Supervisory Authority (BaFin) in Germany
- Swiss Financial Market Supervisory Authority (FINMA) in Switzerland
- Australian Securities and Investment Commission (ASIC)
- Financial Markets Authority (FMA) in New Zealand
- Monetary Authority of Singapore (MAS)
- Japanese Financial Services Authority (JFSA)
- Financial Sector Conduct Authority (FSCA) of South Africa
- Dubai Financial Services Authority (DFSA)
This is one of the most impressive list of regulators we have seen from any forex broker. It helps to emphasise the size of the IG Group and to give clients the peace of mind they are trading online with a well established forex broker that must comply with strict rules and reguations put in place to protect investors.
IG Review Summary
IG have won multiple awards for their brokerage services and are most certainly one of the biggest forex brokers in the world. They offer a wide range of assets for trading online via multiple flexible and user-friendly trading platforms. Clients get access to useful trading tools and a vast selection of educational resources. The broker is regulated in multiple jurisdictions and offers miultilingual support around the clock. There are a choice of trading accounts and convenient funding options to suit all types of trader. You can read our detailed IG Review to find out more about them and see why we consider them as one of our best forex brokers.
|Strict regulation in multiple jurisdictions||Could offer more online payment processors for account funding|
|Powerful & user-friendly trading platforms for desktop, web & mobile|
|Huge range of 16,000+ trading instruments|
|Tight spreads, low commissions & fast trade execution speeds|
|Plenty of trading tools to assist traders|
|IG academy with educational resources|
|Convenient account funding methods|
|Accept traders in the USA & most other countries|
|FIX API DMA trading|
Pepperstone has been around for many years and have rightly earned a fantastic reputation amongst the forex trading community as one of the best forex brokers. They offer traders from around the globe online forex trading via the popular MetaTrader 4 forex trading platform for desktop, web and mobile devices.
Pepperstone provides some of the best forex trading conditions possible and lowest commissions of any forex broker. They utilise a vast range of liquidity providers (LP’s) which ensures that they have a deep liquidity pool. This enables them to provide some of the most competitive bid/ask price quotes for tight spreads along with reliable execution speeds and minimal slippage.
The fact that Pepperstone focuses primarily on the forex market ensures that they maintain some of the most innovative online forex trading conditions to traders worldwide. They have won multiple awards for their forex trading services. The award-winning customer support team is available in over 12 languages, 24-hours a day via phone, chat and email.
Pepperstone Platforms & Tools
Pepperstone offer online forex trading on some of the best trading platforms with over 70+ FX currency pairs to trade, including one of the largest selections of exotic currencies.
There is a selection of 11 online trading platforms including the very popular MetaTrader 4 and MetaTrader 5 for Windows and MAC. They also offer cTrader, WebTrader and mobile apps for iPhone / Android for trading the markets from wherever and whenever you want, with reliable platforms and lightning-fast execution.
The MetaTrader 4 (MT4) trading platform is one of the most popular and widely used online trading platforms. MT4 is well regarded for its quick learning curve and vast collection of built in trading tools. It has plenty of features for conducting thorough chart analysis and support for automated trading.
MT4 is available for desktop (Windows & MAC), web browsers and mobile devices (iOS & Android). The web version of MT4 can run in most modern web browsers without needing to download or install any additional software.
In addition to having some of the best forex trading platforms, Pepperstone also have a great selection of trading tools to help you manage your trading risk, improve your trading strategies and stay up to date with the latest market movements. This includes the excellent Autochartist technical analysis tool which is provided free of charge to clients.
Pepperstone Research & Education
Pepperstone have a variety of free educational resources including trading guides, expert webinars available in English and detailed market analysis. These can help you improve your trading skills and knowledge whilst assisting with your trading decisions.
Pepperstone Trading Accounts
Pepperstone trading accounts offer cutting edge technology to trade the world’s markets and provide retail forex traders with incredibly low-cost pricing across all forex currency pairs with the added security of financial regulation and some of the forex industries leading customer support.
The broker has a variety of forex trading accounts to cater to the different needs of traders. Whatever your experience level, investment size or account requirements, they are likely to have something that is suitable for you.
Pepperstone accounts gain access to interbank pricing, cutting-edge technology, deep liquidity and super-fast execution speeds. All of the account types are set up in line with retail leverage limits and margin requirements. Professional clients can apply to trade with higher leverage.
The Pepperstone Razor account has the lowest spreads with a very small commission charge although you can opt for the no commission account with a small spread mark up if you prefer. You will find especially on the major currency pairs such as the EURUSD and GBPUSD, Pepperstone has some of the lowest spreads and fastest execution speeds that you are likely to find from any forex broker.
Pepperstone do offer Islamic accounts that comply with Sharia law and can cater to clients with significant trading volumes. If you are such a trader then Pepperstone has a vast amount of liquidity providers to help ensure that your large trading volume will be executed with minimal slippage and at the best possible prices.
With Pepperstone you can also quickly setup a free forex demo trading account to practice your trading strategies with virtual funds until you feel confident enough to open a real account.
Pepperstone Account Funding
Pepperstone have one of the largest selections of deposit and withdrawal options for safe and efficient processing of funds. Funding methods include Wire Transfer, Credit Card, Debit Card, Neteller, UnionPay, Skrill and other online payment processors.
Pepperstone Customer Service
Pepperstone have an award-winning multi-lingual customer support team that are available 24-hours a day via phone, chat and email. They are prompt, efficient and polite in their responses to any questions that you may have.
Pepperstone Limited (UK) is authorised and regulated by the Financial Conduct Authority (FCA). Pepperstone Group Limited is authorised and regulated by the Australian Securities and Investment Commission (ASIC). This strict regulation helps to ensure traders that their brokerage account is with a safe and secure broker that has client’s best interests in mind.
Pepperstone provides institutional grade trading to the online retail forex trader, without any complicated account structures or catches. They focus heavily on a fast execution experience with low cost trading and spreads starting from as low as 0.0 on the EURUSD. Pepperstone welcome all trading styles and apply a low minimum deposit requirement which makes them accessible to most traders around the globe.
Furthermore, Pepperstone have developed industry leading execution technology, whilst they also continue to introduce additional trading tools to benefit forex traders, including mobile apps and WebTrader, advanced account analytics and their very own proprietary client area.
With Pepperstone, you should have everything that you need to start or continue your forex trading at one of the best forex brokers in the word. You can read our full Pepperstone Review to find out more as to why we consider them as one of our best forex brokers.
|Fast trade execution speeds||No US clients|
|Tight spreads||No fixed spread accounts|
|Low trading fees||$200 minimum deposit|
|70+ FX currency pairs|
|11+ forex trading platforms|
|Trading tools & educational resources|
|Multiple account funding options|
|Award winning customer support|
XM Group are one of the largest and best forex brokers, providing traders around the globe with the popular and intuitive MetaTrader platforms for buying and selling over 55+ FX currency pairs, including minor, major and exotic currencies.
XM Group have a vast array of liquidity providers which helps to ensure they have a large liquidity pool which in turn gives retail traders access to some of the industry’s leading spreads, superior trade execution speeds with minimal slippage. XM Group also offers some of the lowest trading commissions for using their top-class trading services. They take great pride in being a transparent forex broker, with the XM Zero account offering spreads from just 0.0 pips.
They have a no-requotes policy which means that execution speeds are some of the leading in the online forex trading industry whilst commission fees are amongst the lowest available to online traders. Execution is a big thing to them with claims that 99.35% of trades are executed within just 1 second. This is an impressive execution speed when compared to any other forex broker.
XM Group have won over 15 forex awards and accolades, have over 16 trading platforms to choose from and a great selection of 1000+ instruments to trade online including forex, stocks, commodities, cryptocurrencies, precious metals and energies.
XM Group Platforms & Tools
XM Group offer clients the option to choose from 16 variations of the popular MetaTrader 4/5 trading platforms for desktop (PC / MAC), web trading directly in your browser without needing to download or install any additional software and MetaTrader for mobile devices running on iOS or Android. The mobile trading apps are especially useful if you need to access your trading account whilst on the go from anywhere in the world provided that you have an internet connection.
The platforms are user friendly and contain an abundance of built-in tools for in-depth analysis of various chart types and timeframes. You can quickly and easily place and manage trades on any of the 1,000+ instruments which are displayed with real time price quotes. The platforms are simple enough for those new to trading online whilst having enough advanced functionality to satisfy the needs of the more seasoned investor.
XM Group Research & Education
XM Group give clients free access to forex market research which can assist with your trading including webinars, video tutorials, trading signals, technical analysis, sentiment analysis and much more.
XM Group Trading Accounts
XM Group provides a wide variety of forex trading account types which allow you to trade on multiple financial instruments including the most popular forex currency pairs such as the EURUSD, GBPUSD, USDJPY, etc. XM Group accounts allow you to trade from just 0.01 lots and allow you to open an account with a minimum deposit of just $5.
XM Group have a micro, standard, ultra-low and zero account – the XM Group Zero account has the lowest spreads and includes a small commission on top of the spread. It is usually more cost effective to use an account with variable spreads and commissions than it is to use a no-commission account which has a spread mark up. This is especially true if you are using a forex scalping system.
As with most forex brokers, XM Group offers free demo accounts which can be useful for beginners who wish to practice trading online with virtual funds until they feel confident enough to open a real account.
XM Group Account Funding
XM Group accept deposits and withdrawals in multiple currencies with a variety of convenient methods for quick and easy account funding. This includes Wire Transfer, Credit Card, Debit Card and online payment processors such as Neteller, UnionPay and Skrill.
XM Group Customer Service
XM Group has over 450 employees with customer service in over 30 languages available 24/5. Support is available 24/5 in 14 languages via phone, chat and email.
XM Group Regulation
XM Group is authorised and regulated by the Australian Securities and Investment Commission (ASIC), Cyprus Securities and Exchange Commission (CySEC) and Financial Conduct Authority (FCA). This helps to ensure safety of client funds and that they abide by strict regulatory standards with some of the most sought-after regulators. They are also regulated with the International Financial Services Commission of Belize (IFSC).
XM Group Summary
With so many forex brokers to choose from, XM Group can give traders the peace of mind that they are strictly regulated in multiple jurisdictions. XM Group also have accounts with very tight spreads and no requotes. This means that you can get your trades executed at the prices that you want. The commissions are also some of the lowest when you compare forex brokers.
The XM Group support team is available 24/5 via live chat, with prompt response times. They have clients in almost 200 countries and staff who speak around 30 languages, this backing up the fact that they are a globally renowned forex broker, without losing focus on individual clients. All clients are treated equally whatever your level of experience or investment size. You can even get your own personal account manager who is on hand to assist should you need them.
They have a selection of powerful forex trading platforms and good amount of forex trading tools to assist with your online forex trading strategies. They also have a range of educational materials to help improve your forex trading skills and knowledge. There are many methods of account funding and withdrawal to suit each individual trader needs, including wire transfer, credit/debit card and online payment processors such as Skrill.
Overall, we consider XM Group to easily qualify as one of our best forex brokers, primarily due to the strict regulation from multiple regulators, huge global presence, deep liquidity pools and industry leading trading conditions.
In addition to this, the minimum deposit makes them accessible to all levels of trader whilst they provide multiple account types, trading platforms and funding options. They have over 1,000+ financial instruments, providing free trading tools and educational resources. These factors amongst others make XM Group a great choice for both beginner and experienced forex traders alike. You can read our full XM Group Review to find out more of the reasons why we consider them to be amongst the best forex brokers.
|No-requotes policy||No US clients|
|No extra commissions||No fixed spread accounts|
|Low spreads & fast execution speeds|
|55+ FX currency pairs|
|1,000+ trading instruments|
|Min $5 deposit|
|Multiple account types|
|16 trading platforms|
|Free educational materials & trading tools|
|Various account funding options|
IC Markets are one of our best forex brokers that offer online forex trading on the ever popular MetaTrader 4 (MT4) platforms for desktop, web and mobile devices. IC Markets has a great advantage of being a true ECN forex broker with a large range of instruments to trade across all of the different account types, including a huge portfolio of forex currency pairs, stocks, indices, commodities, cryptocurrencies, precious metals, energies and more.
IC Markets have some of the lowest trading costs available to retail forex traders and fast trade execution speeds. The spreads are very tight and commissions low when compared to many other brokers. There are no limitations on the type of forex trading strategy that you can use with IC Markets as they allow scalping, hedging, and automated trading with forex robots. They also offer 24/7 customer support who are always on hand to assist with general, technical and account related questions.
IC Markets Platforms & Tools
IC Markets offer the MetaTrader 4, MetaTrader 5, and cTrader platforms. These are the 3 most popular and user-friendly trading platforms available today. The true ECN trading model is incorporated into all of the platforms at no extra cost for all levels of traders. Trading on the go is possible via the mobile and tablet apps. This is useful for those who need to access their account and trade whilst on the go.
IC Markets have partnered with some of the world’s best trading technology companies which allows them to bring forex traders the ultimate trading environment and unique cutting-edge tools. Some of these tools include: Depth of Market (DOM), inbuilt spread monitoring, ladder trading, automated close of trades with custom order templates, and more.
IC Markets provide traders with a range of additional forex trading tools and apps that can assist with detailed market analysis and help to enhance the overall trading experience. These tools include economic calendars, alerts, technical indicators, market data, VPS and more.
IC Markets Research & Education
IC Markets have a vast selection of educational materials including basic and advanced trading guides and video tutorials. These can help clients to learn some of the most importance aspects about online trading including how it operates, technical and fundamental analysis, market influences, trading platforms and more.
IC Markets Trading Accounts
IC Markets offer a variety of forex trading accounts to cater for the needs of each individual trader, including accounts suited towards both beginners and experienced traders. The main difference between the accounts are the pricing models implemented. There are commission free accounts with a small spread mark-up or variable spread accounts with tighter spreads and a small commission fee. The account type you opt for can depend on your trading strategy. If you are a scalper then you would most likely require the true ECN account whereas swing traders may not be as dependant on the spread.
The IC Markets true ECN account is the key factor that helps to separate IC Markets from other forex brokers. This account connects forex traders to a very deep and diverse mix of up to 50 liquidity providers, which again reiterates that they provide some of the best spreads and superior execution for forex trading.
You can open a free demo trading account with IC Markets to practice your online trading strategies with virtual funds. This can be a great way to become familiar with the trading platforms and to improve your trading skills before you gain the confidence to open a real account. IC Markets are a Muslim friendly broker as they offer Islamic swap free accounts that comply with Sharia law.
IC Markets Account Funding
IC Markets accept client’s deposits in 10 major currencies with a wide variety of convenient methods for making deposits and withdrawals including Wire Transfer, Credit Card, Debit Card and online payment processors which include Neteller, PayPal and Skrill. There is likely to be a method suitable for every individual anywhere in the world.
IC Markets Customer Service
IC Markets offer multilingual support 24/5 via phone, chat and email. They are prompt, efficient and polite when answering support questions.
IC Markets Regulation
IC Markets is regulated by the Australian Securities and Investment Commission (ASIC). This means that they must abide by the strict rules put in place to protect investors and meet the strict capital requirements that they impose. All IC Markets client’s funds are held in segregated client trust accounts with the top Australian banks, thus helping to give the forex trader added security. IC Markets cannot use these funds for any other purposes such as running costs. This regulation helps to give you peace of mind that you are using a forex broker which must comply with very strict regulatory conditions.
IC Markets Summary
IC Markets have grown over the years to become one of the largest MetaTrader 4 and true ECN forex brokers in the world. They have achieved this by giving forex traders what they really want which is tight spreads, low commissions and plenty of liquidity to ensure trades get filled at the best possible prices with minimal slippage. They also provide excellent 24/7 customer support.
Opening a demo or real account at IC Markets is extremely quick and easy. They offer a diverse range of forex trading accounts to suit the needs of all traders They offer user friendly trading platforms including the popular MetaTrader 4, a huge range of trading instruments, multiple account funding methods and strict regulation. You can read our full IC Markets Review to explore in more detail why they are considered as one of our best forex brokers.
|Regulated broker||No US clients|
|Institutional grade liquidity||Min $200 deposit|
|True ECN model|
|Fast execution speeds|
|Multiple account funding options|
|Social trading platforms|
|Variety of powerful trading platforms & tools|
How did Trading Brokers choose our best forex brokers?
Following on from our best forex brokers of 2020, we will now look at what factors are worth considering when looking for an online forex broker.
What makes a good forex broker?
The key factors to consider when choosing an online forex broker include:
The forex broker should be licensed by one of the top regulators such as ASIC, CySEC and the FCA. You can check a broker’s license number with the relevant authorities to ensure the regulation is up to date and legitimate.
Forex broker trading platforms
Make sure that the broker provides a forex trading platform that you are familiar with. If you have no prior trading experience then the MetaTrader 4 trading platform is considered the most popular option for retail traders due to its user-friendly interface.
FX currency pairs
The forex market contains major and exotic currency pairs for trading. Major forex currency pairs include the EUR/USD and GBP/USD. More exotic currency pairs include the EUR/TRY and USD/HKD. Ensure that the broker offers the currency pairs that you wish to trade. You may want to focus on the EUR/USD for now but if you plan to branch out into other currencies in the future it will be beneficial if they are also available through your existing broker.
Forex broker commissions
Most forex brokers will charge a commission for each trade that you place. Check the commission amount is listed “per round turn”. Some brokers will list a commission of $3.5 per trading lot which is actually $7 once you have opened and closed the trade. It would be a wise idea to factor the commission in to your money management plan as it is a key trading cost, along with the spread.
Forex broker spreads
Every time you buy or sell a currency pair, you need to pay the spread. This is the difference between the buy and sell price. Whilst the spread will be similar across most brokers, some forex brokers have more liquidity providers (LPs) than others which means their spreads can be lower. This is especially important if you are taking short term trades as the spread can quickly add up.
Forex broker leverage
Forex trading is a leveraged product which means that you can trade with a position size greater than your account. This can lead to greater profits but also carries greater risks. It is extremely important to understand leverage before trading online due to the high risks involved. You should opt for a leverage that you feel comfortable with as every trader has a different risk appetite.
Forex broker order types
Forex brokers will usually offer the instant execution of opening/closing trades and stop/limit orders if you wish to enter a specified distance away from the current price. Trailing stops and break evens are other options they can allow. Some brokers will have a minimum distance requirement if you try to modify an order at a level to close to the current price. Most brokers will allow scalpers, hedging and automated trading. It is worth considering what order types you plan to use and if these are supported by the broker.
Forex broker trading tools & educational resources
You will find that most forex brokers offer additional trading tools and educational material which can help assist traders. These tools will usually include chart analysis, economic reports, videos, trading guides and more. If you require specific tools or would find them beneficial, check that they are offered to clients of the broker and if they free or come at an additional cost.
Forex broker funding methods
Ensure that the forex broker offers a suitable and safe method for depositing and withdrawing funds from your trading account. Some broker offer online payment processors such as PayPal and Skrill which can be quicker and more convenient to some traders.
Forex broker customer service
Whatever the skill level of a trader, it is very likely at some point you will need to contact customer service. This may be more frequent for beginners or a one off for the more experienced traders. However, the customer service should respond in a prompt and efficient manner. Consider what customer services they offer as one may be more convenient to you than others. Some traders prefer to communicate over live chat whereas others want to speak to someone directly on the phone. Also consider the location of the forex broker as the time difference may cause difficulties although most brokers should offer multilingual support 24 hours a day, five days a week.
What is a forex broker?
Foreign exchange had previously only been traded on the interbank market by larger clients such as banks and multinational corporations who used it to trade for commercial purposes and to hedge against currency risks. Since then, retail forex trading has been introduced through forex brokers.
A forex broker (short for brokerage) is an intermediary who buys and sells currency pairs on behalf of its clients for a commission fee and/or spread mark up. They allow individual retail traders access to trade the previously inaccessible forex market through online trading platforms.
Since they first began in the 1990’s, forex brokers have offered a service that is essential for traders to be able to trade currencies and have been vastly improving their services over the years. Opening a forex trading account is now a quick and easy online process. All you need is an internet connection, forex broker trading account and trading platform. Previously, this was only available to banks and other financial institutions.
There are hundreds of forex brokers located throughout the world with differing trading conditions, products and services. Most will offer a wide range of major and exotic currency pairs to trade whilst also offering other trading instruments such as stocks, CFDs, indices, commodities, energies, precious metals and cryptocurrencies. This makes it convenient for a trader to be able to trade multiple markets on one trading broker. Trading is risky, thus if you are a beginner trader it is best to start on a demo trading account.
In addition to providing an account and platform to trade from, forex brokers offer other relevant services such as educational material, forex news, market analysis, trading tools and more. These services may be free to the brokers clients or come at an additional cost.
With so many forex brokers to choose from, it is very important to check if the broker is regulated and offers negative balance protection. Regulation will help to ensure that your funds are safe and held in a segregated account away from the brokers account so that they cannot be used for any other purpose. A regulated broker has to stick to strict regulatory guidelines which can give clients peace of mind.
Forex broker fees
A forex broker makes money by charging a fee for using their services. This fee is usually a commission for each trade made through the brokerage and/or a spread mark-up if using a market maker. These brokers charge zero commission but will increase the liquidity providers spreads to cover costs and make profit from every trade processed through them. They can offer fixed spread accounts which is not always a sustainable model as actual spreads may be greater than the fixed spread set by a broker. When using a fixed spread trading account you should check the small print as they are not always fixed 24/5 especially around economic releases or hours of low liquidity. When a broker charges a commission they tend to offer variable spreads which will depend on the liquidity pools that they use, without any mark-up. This will often mean lower spreads and overall trading costs, even after the brokers commission fee is factored in.
There are forex brokers who operate as a market maker and use a dealing desk. These brokers can take the opposite position of a trader and add mark-ups to the spread which can increase trading costs. Some may even delay order fills that can lead to negative slippage. A dealing desk model can be problematic if there is a conflict of interest, although broker regulation has helped to significantly reduce this happening.
STP/ECN forex brokers
Other brokers have no dealing desk and provide STP/ECN accounts with direct access to trade the markets through liquidity providers (LPs) for a small fixed commission fee. This model usually gives lower spreads, faster execution and more favourable trading conditions as there is no broker interference with your trading. This is why it is so important to compare and choose only the best forex brokers with strict regulation in place.
What is forex?
The Forex (FX) is a currency trading market. The forex market is the largest financial market in the world, with trillions of dollars in volume traded every day. Anyone who opens a forex trading account with a forex broker can trade the extremely liquid forex market.
The forex market does not have a centralized location, instead it is an electronic network consisting of participants who have foreign exchange currency needs such banks, financial institutions, brokers and speculative retail traders. The main factors that move the forex market are speculation, economic growth and strength and differentiating interest rates.
Those who participate within the forex market place orders to buy and sell currencies from each other through a forex broker. The forex market is open 24 hours a day, five days a week, excluding holidays. The size and deep liquidity of the forex market, combined with its availability make it an appealing choice for traders. This allows you to buy or sell currency pairs anytime during the week.
The largest forex markets are based in major global financial locations such as London, New York, Singapore, Tokyo, Frankfurt, Hong Kong, and Sydney. Trading liquidity usually peaks when these markets are open or overlap, especially when trading a currency pair that includes a major markets currency.
FX currency pairs
Forex currencies are listed in pairs, such as the most popular fx pairs the EUR/USD and GBP/USD. When you are trading the forex market, you buy and sell a currency pair of one country that is relative to another. When you sell one currency, you are buying another and if you buy a currency you are selling another. The most traded currency is the U.S. dollar whereas the euro is the most traded counter currency. Other significant pairs include the Japanese yen, British pound and Swiss franc.
Each currency pair has its own price on which traders can speculate to make profits from increasing or decreasing value of the associated currencies. If you anticipate a currency pair will decrease in value then you would look to short (sell) the pair. If you expected a price increase, then you would look to long (buy) the pair. A profit or loss is made between the difference in prices from when you entered and exited your trade position.
The forex market is traded in lots which can be micro, mini or standard.
Micro Lot: 1,000 currency value (0.01 lots)
Mini Lot: 10,000 currency value (0.1 lots)
Standard Lot: 100,000 currency value (1 lot)
You can trade single or multiple lots, e.g. six micro lots (0.06) or thirteen standard lots (13).
Retail forex brokers will usually charge a rollover fee for holding trade positions that is applied at 5pm EST each day. This rollover can be a credit or debit for the difference in interest between the two currency pairs being traded. Rollover fees or either added or deducted from the transaction when the trade is closed. Weekend rollover is charged on Wednesday which will give a credit or debit of triple the normal amount. Some forex brokers offer Islamic accounts (also known as swap free accounts) for clients who cannot earn or pay interest due to their religious beliefs.
Forex market differences
The forex market is different from other major markets. There are less rules especially when not using a regulated forex broker. Fees and commissions can vary depending on the forex broker you use. Most will charge a commission for each trade you make whereas some may also add a mark up to the spread. The spread being the difference between the bid and ask prices. The forex market is available to trade 24/5. Forex brokers can provide leverage of up to 1:500 or even higher in certain jurisdictions. This means that you can have $1,000 in your account and take a position of $100,000 when using 1:100 leverage. Whilst this may seem attractive, it can increase both profits and losses. High leverage makes forex trading very risky and most traders lose money attempting to trade in this way.
Trading with a regulated forex broker that has no dealing desk can help to provide the best possible forex trading conditions. Traders should always manage their position size and control risk so that one trade does not results in a large loss.
What other markets can I trade online?
Forex is one of the most popular markets for online traders and is a large focus of the service that trading brokers offer. One of the reasons is due to the advertising campaigns and high leverage on offer. However, there are other markets that you can trade including CFDs, Indices, Commodities, Energies, Precious Metals, Stocks, Bonds, ETFs and Cryptocurrencies.
How much money do I need to start trading forex online?
You can start trading forex with as little as $1 depending on the minimum deposit required by the broker. As forex trading is risky by nature, never trade with more than you can afford to lose.
Can you make money trading forex online?
Forex trading requires patience, discipline and lots of practice. According to our research across hundreds of forex brokers, most online forex traders actually lose money. Most aspiring traders start trading on a demo trading account before going live.
How to open a forex trading account?
Simply choose an online forex broker, follow the account opening process and you will be able to start trading currencies online through one of their trading platforms.
Need help choosing from the best forex brokers in 2020?
If you are still unsure which is the best forex broker for you then you can use our free online broker comparison tool to quickly compare online brokers based on regulations, minimum deposit, leverage, spreads, commissions, funding options and more. You can also read our broker reviews and choose from our best brokers, best trading platforms, best copy trading platforms, best social trading platforms and best trading apps. If you would like to look for the best trading brokers in a particular country, we have pages dedicated to our best brokers USA, best brokers UK, best brokers Australia, best brokers South Africa and best brokers Canada.
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