Forex.Com Vs Interactive Brokers

Category: Broker Guides | Author: Trading Brokers | Date: July 19, 2023

When it comes to choosing a forex broker, finding the right platform that suits your trading needs is essential. In this article, we will compare two renowned Forex brokers, Forex.com and Interactive Brokers. Both platforms offer a wide range of features and tools for traders, but they have distinct differences in terms of trading options, fees, and platform functionality. Whether you are a beginner or an experienced trader, understanding the strengths and weaknesses of each broker will help you make an informed decision. Join us as we delve into a comprehensive comparison of Forex.com and Interactive Brokers to determine which platform may be the better fit for your Forex trading journey.

Overview of Forex.Com

FOREX.com

FOREX.com

Forex.Com is a US-based online trading platform that was founded in 2001. It is a subsidiary of StoneX Group Inc., a Fortune 100 financial giant with revenues exceeding $54 billion. Forex.Com offers access to over 500 markets, including forex, cryptocurrencies, stocks, indices, commodities, and more. The platform stands out for its advanced trading technology and tools, providing traders with a competitive edge.

Notable features include TradingView charts, Performance Analytics, SMART Signals, and Capitalise.ai, empowering users with sophisticated analysis and automation capabilities. Maintaining regulatory compliance across various jurisdictions, Forex.com operates under the oversight of esteemed regulatory bodies such as the Commodity Futures Trading Commission (CFTC) and the National Futures Association (NFA) in the United States, the Financial Conduct Authority (FCA) in the United Kingdom, the Australian Securities and Investments Commission (ASIC) in Australia, and the Investment Industry Regulatory Organization of Canada (IIROC) in Canada.

Pros of Forex.Com

  • Commission-free trading on forex and cryptos
  • Low fees on stocks and indices
  • Wide range of assets to trade
  • Advanced trading technology and tools
  • Extensive educational resources

Cons of Forex.Com

  • High spreads on some assets
  • Withdrawal fee of $25 for wire transfers
  • Limited social trading features
  • No direct customer support phone line
  • High minimum deposit of $2,000 for futures accounts
Forex.com Logo

Since 2001, Forex.com has been providing traders around the globe with industry leading trading conditions including user-friendly platforms, tight spreads, low commission fees, rapid trade execution speeds. The broker is regulated in multiple jurisdictions and has a huge selection of trading instruments, powerful tools and educational materials.

Between 74-89% of retail investor accounts lose money when trading CFDs with this provider.

Overview of Interactive Brokers

Interactive Brokers

Interactive Brokers

Interactive Brokers is a US-based online trading platform that was founded in 1978 by Thomas Peterffy. It is one of the world’s largest brokers by trade volume and client assets. Interactive Brokers offers access to over 150 markets, including forex, cryptocurrencies, stocks, options, futures, bonds, and more. Recognized for its commitment to cost-effectiveness, Interactive Brokers adheres to a low-cost investing philosophy, enabling clients to minimize expenses while optimizing their returns.

Moreover, the platform’s investor-owned structure aligns its interests directly with those of its clients, fostering a relationship built on trust and shared success. Interactive Brokers operates under the regulatory oversight of various authoritative bodies worldwide, including the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) in the United States, the Financial Conduct Authority (FCA) in the United Kingdom, the Australian Securities and Investments Commission (ASIC) in Australia, and the Monetary Authority of Singapore (MAS) in Singapore.

Pros of Interactive Brokers

  • Low commissions on stocks, options, futures, and more
  • High-quality investment products
  • Investor-owned structure
  • Sophisticated trading technology and tools
  • Dedicated customer service

Cons of Interactive Brokers

  • High minimum deposit for some products
  • Limited asset selection
  • No social trading features
  • Complex pricing structure for some services
  • Steep learning curve for beginners
Interactive Brokers Logo

Interactive Brokers provide leading online trading solutions for traders, investors and advisors, with direct global access to stocks, options, futures, currencies, bonds and funds.

Between 74-89% of retail investor accounts lose money when trading CFDs with this provider.

Comparison between Forex.Com and Interactive Brokers

In this section, we will compare Forex.Com and Interactive Brokers based on the following features:

Regulation

Both Forex.Com and Interactive Brokers are regulated by reputable authorities in their respective jurisdictions. However, Forex.Com has a wider global reach than Interactive Brokers, as it operates in over 100 countries while Interactive Brokers is mainly focused on the US market. Therefore, depending on where you live or where you want to trade from, you may have more or less access to either platform.

Trading Platform

Forex.com offers a web-based platform that supports advanced charting, research, and analysis tools. Users can also access the platform through a mobile app for iOS and Android devices. Interactive Brokers provides multiple platforms for different levels of traders, including the web-based Client Portal, the desktop-based Trader Workstation (TWS), and the mobile app IBKR Mobile. All platforms offer advanced charting, research, and analysis tools.

Pricing and Fees

Both Forex.Com and Interactive Brokers offer commission-free trading on forex and cryptos, which is a great advantage for traders who want to save on costs. Forex.Com charges low fees on stocks and indices, but it has high spreads on some assets, such as commodities and currencies. It also charges a withdrawal fee of $25 for wire transfers. Interactive Brokers charges low commissions on stocks, options, futures and more, but it has complex pricing structures for some services, such as brokerage accounts, managed portfolios, savings accounts and more.

Broker Type

Forex.com is a market maker broker, which means it executes trades internally and acts as a counterparty to its clients. This may create a conflict of interest and affect the quality of execution. Interactive Brokers is an agency broker, which means it routes trades to third-party liquidity providers and does not trade against its clients. This may result in better execution quality and lower slippage.

Leverage

Both Forex.Com and Interactive Brokers offer leverage or margin trading, which allows you to trade with more money than you have in your account. Forex.com offers leverage up to 1:50 for forex trading. However, leverage is restricted to 1:30 for EU clients due to regulatory limitations. Interactive Brokers offers leverage up to 1:50 for forex trading.

Asset Selection

Forex.com offers a wide range of assets to trade, including over 50 currency pairs, over 15 commodities, over 10 indices, over 100 cryptocurrencies, and over 40 crypto pairs. Interactive Brokers also has a diverse asset selection, including over 70 currency pairs, over 300 mutual funds, over 10 commodities, over 20 indices, over 40 options strategies, and over 70 futures products.

Social Trading

One of the main differences between Forex.com and Interactive Brokers is their social trading features. Forex.com does have a social trading platform, but it is not integrated into its main trading platforms. It is called Trade Signals, and it is powered by Autochartist, a third-party provider of automated technical analysis and trade ideas for forex and CFDs. You can access Trade Signals from the Forex.com website or app, and you can choose to follow the signals of other traders or create your own. Users can also access TradingView, a popular social network for traders, from the Forex.com web platform. Interactive Brokers does not have any social trading features, except for a community forum where users can share ideas and strategies.

Minimum Deposit

Another difference between Forex.com and Interactive Brokers is their minimum deposit requirements. Forex.Com has a low minimum deposit of $100 for most countries (except for some regions where it is higher), which makes it accessible for beginners or small investors. Interactive Brokers has a high minimum deposit for some products, such as brokerage accounts ($2,000), managed portfolios ($50,000), and savings accounts ($100), which may be prohibitive for some investors.

Withdrawal and Deposit Methods

Both Forex.com and Interactive Brokers offer various withdrawal and deposit methods for their users. Forex.Com supports withdrawal and deposit methods such as credit/debit cards, bank transfers, PayPal, Skrill, Neteller, and more. However, it charges a withdrawal fee of $25 for wire transfers regardless of the amount or method used. It also has a minimum withdrawal amount of $100. Interactive Brokers supports withdrawal and deposit methods such as bank transfers, checks, ACH transfers, wire transfers, and more. However, it does not support credit/debit cards or online payment services like PayPal. It also charges fees for some methods such as wire transfers ($10 for domestic wires and $40 for international wires).

Which Should You Choose: Forex.Com or Interactive Brokers?

The answer to this question depends on your personal preferences, goals, and needs as a trader or investor. There is no one-size-fits-all solution when it comes to online trading platforms. However, here are some general guidelines that may help you make an informed decision: If you are a beginner or casual trader seeking access to a variety of assets with simple clicks or taps, zero commission on forex and cryptocurrency trading, advanced trading technology and tools, and a low minimum deposit requirement, Forex.com may be the preferred option for you. Forex.com offers a user-friendly interface that simplifies trading execution and provides access to a wide range of forex and cryptocurrency trading options. It also offers advanced trading technology and tools to assist traders in their analysis and decision-making processes.

On the other hand, if you are an investor looking to access various financial products and services with a low-cost investing philosophy, personalized advice, high-quality investment products, an investor-owned structure, and dedicated customer service, Interactive Brokers might be a better fit. Interactive Brokers focuses on providing investors with a diverse selection of investment options, including stocks, ETFs, options, and more, with competitive pricing. It also emphasizes personalized advice and offers dedicated customer service to support investors’ needs.

Conclusion

In this article, we have compared two of the most well-known and widely used online trading platforms: Forex.Com and Interactive Brokers. We have looked at their backgrounds, pros, and cons, and how they differ in terms of regulation, trading platform, pricing and fees, leverage, asset selection, social trading, minimum deposit, and withdrawal and deposit methods. We have also provided some general guidelines on which platform suits you better depending on your preferences, goals, and needs. However, the final choice is yours to make based on your own research and due diligence. We hope this article has been helpful and informative for you. Happy trading!


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