Forex Brokers in Canada
There isn’t really a fantastic choice of forex brokers in Canada as regulation there tends to be quite strict when compared to some other countries. The Investment Industry Regulatory Organization of Canada (IIROC) is the pan‑Canadian self‑regulatory organization that oversees all investment dealers and trading activity on Canada’s debt and equity marketplaces. Despite this stringent regulation and the limitations that it imposes on Canadian forex brokers, there are some good options if you shop around and know what to look for.
Best forex brokers in Canada
We have conducted many hours of thorough research and analysis into the quality of service provided by many Canadian forex brokers. From there, we were able to collate what we consider to be amongst the most important factors to consider when choosing a broker and allocated them an unbiased broker rating based on our findings. You can see a selection of our best forex brokers in Canada in the table below.
How to choose a Canadian forex broker?
The most important factor for us to consider when choosing the best Canadian forex brokers was that they are regulated by the Investment Industry Regulatory Organization of Canada (IIROC) to provide online forex trading services in Canada. From there, we look at other important things when it comes to trading forex online such as the platforms, apps, payment options, fees, spreads, execution policies, education, market analysis, tools, accounts and customer support.
Forex Regulation in Canada
We believe that it is of upmost importance that a forex broker in Canada is regulated and authorised to provide such services. Using a regulated broker helps to give traders peace of mind that they are using a broker which is subject to strict rules and regulations put in place to help protect investors.
It is worth mentioning that there are some offshore forex brokers that still solicit clients located within Canada. There are also Canadian forex brokers who offer online trading services to clients located in some countries outside of the Canada. In this instance, it would be a considered a wise idea to ensure that the broker in question has the relevant regulation within the jurisdiction that they operate from.
If a broker is licensed and regulated, they should be provided with a registration number as proof that they are registered. This number is usually located on the brokers website, near the footer where they state who they are regulated by. You should check on the relevant regulators website to validate the current status of the broker registration to ensure that it is valid and up to date.
It has been known for some scam brokers to fake regulation, some even going as far to clone another brokers website. When you are looking up the registration number, you should find details of the broker including their website, contact details and if they have any cases brought against them.
Investment Industry Regulatory Organization of Canada (IIROC)
The Investment Industry Regulatory Organization of Canada is the national self-regulatory organisation which oversees all investment dealers and trading activity on debt and equity marketplaces in Canada. IIROC was established as a non-profit corporation on June 1st, 2008 as part of the consolidation of the Investment Dealers Association of Canada (IDA) and the Market Regulation Services Inc. (RS).
IIROC operates under Recognition Orders from the Canadian Securities Administrators (CSA), which is the umbrella for Canada’s provincial and territorial securities regulators. IIROC is subject to CSA oversight and regular operational reviews. The organisation sets regulatory and investment industry standards and has quasi-judicial powers in that it holds enforcement hearings and has the power to suspend, fine and expel members and registered representatives.
Forex Platforms
The best Canadian forex brokers should have a variety of different forex trading platforms for multiple devices including desktop, web and mobile forex trading apps. The brokers trading platforms should be user friendly, with plenty of trading tools and advanced functionality for all types of forex trading strategies.
Currency Pairs
The Canadian forex broker should provide traders with a wide range of currency pairs and trading instruments across multiple asset classes including Forex, Commodities, Cryptocurrency, Stocks, Indices, Options, ETFs, CFDs and Futures. The more choice that the broker has, the easier it would be to expand your portfolio in the future, should you wish to do so.
Forex Spreads
When you place a trade position with a forex broker, you will usually need to pay the spread which is the difference between the bid and ask prices at the time of executing your order. In general, the lower the spreads, the cheaper the trading costs can be and the better the prices you may have your trade executed at. Although, this can also be dependent on other factors such as the brokers liquidity, slippage and execution model.
Commission
Many brokers will charge a small commission fee for each trade that you place with them. The lower the commission fee per trade, the lower your overall trading costs can be in the long term. Some forex strategies actually depend on low commissions. Thus, the best Canadian forex brokers should have the most competitive commissions.
Forex Fees
In addition to the spreads and commissions that forex brokers may charge, there can be additional fees. These include overnight swap fees, funding fees, platform fees, trading tool fees, educational resource fees, etc. Any other fees charged by the broker should be competitive and transparent to the trader. If you are looking to save as much as possible on your trading costs, you can take a look at our best discount brokers.
Execution Speeds
The execution speed can determine the price your order will be executed at. Instant execution should mean that the order is placed as close to your desired price as possible. The best forex brokers in Canada should have rapid execution speeds with minimal slippage so that traders get the best available prices more often than not. Some trading strategies such as scalping are dependent on reliable execution speeds. I find that brokers with no dealing desk such as ECN forex brokers have superior execution and the tightest spreads.
Liquidity Providers
The best Canadian forex brokers should have top liquidity providers (LPs) with deep liquidity pools so that they can offer competitive bid/ask prices along with reliable trade execution speeds.
Forex Trading Tools
Whilst the trading platforms offered by brokers will usually have more than enough trading tools for the average trader, there are some brokers who offer additional trading tools such as economic calendars, trading calculators, forex market analysis, forex signals and more. The best forex brokers in Canada will usually offer some additional trading tools to support traders with their daily trading activities.
Educational Resources
Educational resources can help forex traders to improve their trading skills and knowledge. They also encourage informed trading. The best forex brokers will usually offer clients a range of free educational materials such as tutorial videos, trading guides, eBooks, trading glossary, FAQs, webinars and seminars. If you are new to trading and need as much guidance as possible, you might want to explore our best brokers for beginners.
Forex Account Types
Trading brokers can have a variety of different forex account types that are designed to cater to the differing needs of clients. The accounts can vary according to the minimum deposit required, leverage offered, execution type, spreads, commissions, instruments, additional services and more.
The best Canadian forex brokers should have a selection of account types for different experience levels and trading strategies. Demo forex accounts can be useful to practice trading online with virtual funds whilst swap-free Islamic accounts that comply with Sharia law support Muslim traders.
Account Funding Options
In order to trade online, you will need to be able to deposit and withdraw funds to and from your forex broker account. Online brokers can offer a range of different account deposit and withdrawal methods. This will often include bank transfers, credit/debit card and online payment processors such as Skrill, Neteller and PayPal. The best forex brokers in Canada should have a generous variety of convenient funding options. It is worth considering the time taken and any fees involved for processing funds.
Customer Support
Most Canadian forex brokers can be reached via telephone, email and live chat. It is worth ensuring that the broker can be reached in a way that is convenient for your needs. The brokers customer support team should be prompt, polite and efficient in their responses to all clients general and technical questions. You may wish to consider if there is any different between your time zone and the brokers support hours, as this could have an impact on response times.
Is forex trading legal in the Canada?
The IIROC, the country’s regulatory authority, regulates forex trading, which is permitted in Canada. In contrast to other nations, Canada’s regulatory system is a little bit more complicated. In actuality, each Canadian province has a local regulator of its own. Either way, firms or individuals seeking to offer forex trading services must be appropriately registered in the province in which they intend to work and must also be a member of the Investment Industry Regulatory Organization of Canada.
Conclusion: should I trade with a Canadian forex broker?
Overall, there are some top forex brokers in Canada that are IIROC regulated and have an excellent range of trading products and services. Granted, they do impose some certain restrictions that you might not get from other regulators such as CySEC, but if you are in Canada then this regulation can bring you peace of mind which enables you to fully focus on your trading.
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