The post Best Forex Brokers for Beginners by Luke Jacobi appeared first on Benzinga. Visit Benzinga to get more great content like this.
A solid online forex broker can help you get started as a retail forex trader. Your broker will serve as your primary access point for the foreign exchange market, so it’s to make sure it offers the services and currency pairs you require, as well as dealing spreads competitive enough for your trading strategy.
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5 Best Forex Brokers for Beginners
Since your online forex broker will likely be your main interface with the forex market, make sure you choose wisely.
Your ideal choice for a forex broker should be well-regulated in its local jurisdiction, accept clients from your country, have tight dealing spreads and a sufficient variety of currency pairs and other assets to suit your trading needs.
- Best for U.S. Traders: FOREX.com
- Best for CFD Trading: IG Markets
- Best for Zero Commissions and Low Spreads: CedarFX
- Best for Copy Trading: eToro
- Best for Active Multi-Asset Traders: Interactive Brokers (IBKR)
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1. Best for U.S. Traders: FOREX.com
get started
securely through FOREX.com’s
website
FOREX.com is a one-stop shop for forex traders. With a massive range of tradable currencies, low account minimums and an impressive trading platform, FOREX.com is an excellent choice for brokers searching for a home base for their currency trading. New traders and seasoned veterans alike will love FOREX.com’s extensive education and research center that provides free, informative forex trading courses at multiple skill levels. While FOREX.com is impressive, remember that it isn’t a standard broker.
Best For
- MetaTrader 4 users
- Beginner forex traders
- Active forex traders
- Impressive, easy-to-navigate platform
- Wide range of education and research tools
- Access to over 80 currencies to buy and sell
- Leverage available up to 50:1
- Cannot buy and sell other securities (like stocks and bonds)
FOREX.com ranks No. 1 as our choice for the best forex broker for U.S.-based traders. The broker is strictly regulated by the NFA and CFTC, while its subsidiaries are overseen by 6 other major regulators around the world.
You need just $100 to open a trading account that allows you to start taking positions in 80 currency pairs. All traders can use FOREX.com’s proprietary Advanced Trading Platform, while non-U.S. clients can use the MetaTrader suite that includes a mobile trading option.
Pros
- Available for U.S. and international forex traders
- Low fees
- 90+ currency pairs
- High quality educational resources
- Easy to navigate platform
Cons
- MetaTrader 5 is only available outside the U.S.
- No educational video content available
2. Best for CFD Trading: IG Markets
get started
securely through IG Markets’s
website
IG is a comprehensive forex broker that offers full access to the currency market and support for over 80 currency pairs. The broker only offers forex trading to its U.S.-based customers, the brokerage does it spectacularly well. Novice traders will love IG’s intuitive mobile and desktop platforms, while advanced traders will revel in the platform’s selection of indicators and charting tools. Though IG could work on its customer service and fees, the broker is an asset to new forex traders and those who prefer a more streamlined interface.
Best For
- New forex traders who are still learning the ropes
- Traders who prefer a simple, clean interface
- Forex traders who trade primarily on a tablet
- Easy-to-navigate platform is easy for beginners to master
- Mobile and tablet platforms offer full functionality of the desktop version
- Margin rates are easy to understand and affordable
- Access to over 80 currency pairs
- U.S. traders can currently only trade forex
- Customer service options are lacking
- No 2-factor authentication on mobile
IG Markets is a top contract for differences (CFD) broker overseen by the CFTC and NFA, so it can accept U.S.-based clients. It’s also strictly regulated in the U.K. by the Financial Conduct Authority (FCA).
IG Markets lets clients trade CFDs on over 17,000 different assets, including 80 forex currency pairs, as well as equities, commodities, indices, bonds, exchange traded funds (ETFs) and short-term interest rates. The broker requires a minimum deposit of $250 to get started and allows U.S. clients to use a maximum leverage ratio of 50:1.
Like any good online forex broker, IG Markets keeps clients’ money in accounts segregated from its own. IG Markets has a proprietary trading platform and also supports MT4 and ProRealTime. It lets clients automate their trading via its application programming interface (API).
Pros
- Excellent trading platforms and tools
- Over 19,000 tradeable instruments
- Great educational tools
Cons
- Limited product range on MT4
- Slow customer service responses
3. Best for Zero Commissions and Low Spreads: CedarFX
get Started
securely through CedarFX’s
website
Billing itself as the world’s 1st eco-friendly broker, CedarFX makes it easy to trade and give back to the planet. You can choose a 0% Commission Account or an Eco Account — or open multiple accounts to meet all your needs.
CedarFX offers access to a wide range of tradable securities, including stocks, futures, major and exotic forex pairs, cryptocurrencies and more. Though CedarFX could introduce a few additional educational resources, the broker remains a unique option for traders invested in giving back.
Best For
- Forex investors
- Investors interested in 0% commission or eco conscious trading
- Investors looking for 24/7 customer service
- Allows users to offset their carbon footprint
- 0% commission investing
- Offers demo account access
- 24/7 customer service available through live chat
- Eco Account Option (10 trees planted for each lot traded)
- Fast deposits/withdrawals with Bitcoin
- Limited number of educational resources for new investors
Excellent for beginners, CedarFX offers a free demo and live accounts on the MetaTrader 4 platform. You can work on your strategy and acquaint yourself with the platform when you’re first getting started by observing identical market conditions so you can go live for the first time.
You can trade on any mobile device, tablet or desktop by downloading the MT4 App or using Web Trader.
CedarFX offers 2 account types — 0% commission accounts and Eco Accounts. You pay $1 commission per lot traded and all commissions support environmental causes through Ecologi. All other aspects of the account, such as spreads, leverage and instruments, are identical.
If you experience any type of problem or have any questions, you can contact CedarFX’s 24/7 customer support team. Reach the company through live chat, email or by requesting a phone call.
Pros
- Low minimum deposit
- Multiple instruments to trade
- Tight spreads
- High leverage
Cons
- Lack of regulations
- Educational resources are lacking
4. Best for Copy Trading: eToro
get started
securely through eToro’s
website
Though Australian and British traders might know eToro for its easy stock and mobile trading, the broker is now expanding into the United States with cryptocurrency trading. U.S. traders can begin buying and selling both major cryptocurrencies (like Bitcoin and Ethereum) as well as smaller names (like Tron Coin and Stellar Lumens).
eToro offers traders the opportunity to invest their assets into premade portfolios or cryptocurrencies, similar to services offered by robo-advisors through traditional brokers. Though eToro isn’t a one-stop-shop for everything an investor needs, its easy-to-use platform and low spreads is a great way to enter the cryptocurrency market.
Best For
- International Forex/CFD Traders
- New cryptocurrency traders looking for an easy-to-use platform
- Traders who want to buy and sell cryptocurrencies on-the-go
- Simple platform that is easy to master
- CopyTrader feature that allows new traders to copy the same strategies used by professionals
- Virtual dummy account that gives you $100,000 to practice trades
- U.S. traders currently limited to cryptocurrencies
- Only 15 major coins available to trade
Copy trading involves selecting an experienced trader whose trades you copy automatically in your own account. eToro specializes in social trading accessed via its CopyTrader tool and offers an excellent social trading network. This trading option seems ideal for beginners since you can sit back and let expert traders with a proven track record direct the trades in your account.
The multi-asset broker lets you trade in more than 2,000 different assets, including cryptocurrencies, and you can start off with a minimum deposit of just $50. eToro accepts clients from most U.S. states.
It’s registered as a Money Services Business with the U.S. Financial Crimes Enforcement Network (FinCEN), instead of as an online broker regulated by the National Futures Association (NFA) and Commodities Futures Trading Commission (CFTC). The company also submits to regulation in the U.K., Australia and Cyprus.
eToro provides excellent educational resources beginners will find useful, and its highly intuitive trading platforms and apps can be quickly picked up by a trading novice. On the downside, eToro does not support the popular MT4/5 platforms from MetaQuotes.
Pros
- Sizeable number of investors to copy
- Extensive range of markets to trade
- User-friendly platforms and app
Cons
- Stops and limits are mandatory on trades
- High fees for non trading
5. Best for Active Multi-Asset Traders: Interactive Brokers (IBKR)
get started
securely through Interactive Broker Primary’s
website
This latest groundbreaking technology is IBKR GlobalAnalyst, a new trading tool that helps investors compare the rate of PEG or price-earnings growth valuations and provide more immediate and comprehensive financial metrics of stocks, globally.
Recognizing that stock selection can be challenging for investors to compare the valuations of domestic and international stocks, Interactive Brokers created GlobalAnalyst to offer investors a simple, yet powerful tool to easily evaluate investment opportunities around the world.
Using GlobalAnalyst, investors can search for stocks by region, country, industry, market capitalization and currency to uncover undervalued stocks worldwide. The resulting table displays the current market and financial metrics, including the PEG Ratio. The PEG Ratio is the PE ratio divided by the three-year compound earnings growth rate, and smaller PEG Ratios typically indicate undervalued companies.
Best For
- Price earnings growth valuations
- Easily evaluate investment opportunities
Interactive Brokers is our pick for the best online broker if you want to trade actively in many different markets and asset classes. The broker offers some of the lowest transaction costs around, including a $0 commission for U.S.-listed equities and ETFs.
IBKR offers access to 150 markets and up to 26 currencies (Available currencies vary by Interactive Brokers affiliate.) IBKR does not charge inactivity fees and does not require minimum deposits.
Interactive offers its top quality proprietary trading platforms, including the Client Portal, Trader WorkStation (TWS) and mobile apps, which have received high customer ratings. If you plan on trading actively in many markets and are looking for a sophisticated broker to grow into, then IB would make an excellent choice.
Pros
- Low fees and account minimums
- Commission free trading
- Great research tools
Cons
- Complicated pricing structure
- Poor customer service
What is a Forex Broker?
Retail forex brokers are financial institutions that act as an intermediary between individual trader clients and the forex market. These forex brokers have an online presence in the form of an official website, and they target smaller traders who wish to operate in the forex market on a margin basis.
Online forex brokers generally allow traders to execute forex deals largely using their supported electronic trading platforms. In addition to offering their own proprietary trading software, many online forex brokers support popular 3rd party forex trading platforms like MetaTrader 4 and 5 (MT4/5) from MetaQuotes.
Some forex brokers also offer very useful educational information for beginners you can use to increase your knowledge about trading. They might also provide access to expert forex market analysis and financial news feeds to help you make better trading decisions.
Start Trading Forex with the Best Forex Brokers for Beginners
If you want to get started trading forex today, select a well-regulated online broker and visit its website to begin the process of opening a margin account. You should expect to fill out an online form and provide proof of your identity and address.
As a beginner, you’ll probably also want to open a demo account funded with virtual money so you can practice using your chosen broker’s trading platform. You can also use a demo account to test your trading strategy in a real-time trading environment before implementing it in a live account.
Keep in mind that forex trading involves a significant risk of loss, so only fund your live trading account with risk capital that you can afford to lose in its entirety.
Beginner forex traders should consider webinars for forex trades and using a forex trading platform such as MT5 when choosing a forex trading broker. Trading costs, forex fees and inactivity fees are important factors to consider when selecting a broker for retail investor accounts. Spread betting is also a viable option for novice traders.
Frequently Asked Questions
Can I trade forex with $10?
Yes, some online forex brokers will accept clients with a very low minimum deposit like $10 or even less.
Answer Link
What is a PIP?
An acronym for “percentage in point”, a pip is the traditional smallest change in a currency pair’s exchange rate. For most currency pairs, a movement of 1 pip is a 0.0001 change.
Answer Link
Can I trade forex without a broker?
Yes, you can trade in the over the counter (OTC) forex market with major financial institutions using credit lines if you are a high net worth individual or corporation, and you can even perform rudimentary forex trading via local cambios. If you’re a retail trader with a modest amount of risk capital to use as margin, you’ll need an online forex broker to trade currency pairs through.
Answer Link
The post Best Forex Brokers for Beginners by Luke Jacobi appeared first on Benzinga. Visit Benzinga to get more great content like this.