Best Forex Brokers

The post Best Forex Brokers by Jay and Julie Hawk appeared first on Benzinga. Visit Benzinga to get more great content like this.

Want the best forex brokers? Forex trading is arguably one of the easiest financial markets to begin trading in. To get started, you just need to open and fund an account with a regulated online broker. Choosing the best forex broker to trade forex does require some initial research to find the one most suitable for your trading needs and experience level.

Quick look: Best Forex Brokers

• Best for Earning Cash Back: FOREX.com
• Best for a Straightforward MetaTrader Experience: HYCM
• Best for Eco-Conscious Traders: CedarFX
• Best for Execution: IG Markets
• Best for MT4 Traders: AXI
• Best for Advanced Forex Traders: Interactive Brokers
• Best for Non-US Traders: eToro
• Best for Leverage: AvaTrade
• Best Bonus: FXCC
• Best for Customer Service: Pepperstone

10 Best Forex Brokers

Benzinga’s picks for the best forex brokers in 6 key categories appear below along with details about each broker and a screenshot of their trading platforms. As you read through your options, remember that the majority of forex brokers can help you open a basic account and begin your investing journey. With these 6 brokerage houses, you are choosing based on the services and extras they provide above and beyond what a traditional broker would do.

1. FOREX.com

Best for Earning Cash Back: FOREX.com

FOREX.com is a subsidiary of StoneX (NASDAQ: SNEX) and ranks as the best overall forex broker.

This broker accepts U.S. clients and is regulated in the U.S. by the Commodities Futures Trading Commission (CFTC) and the National Futures Association (NFA). FOREX.com also has oversight from regulators in 6 major world jurisdictions through its subsidiaries.

Pros:

• 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

Cons:

• Cannot buy and sell other securities (like stocks and bonds)

Read Benzinga’s Full FOREX.com Review

2. HYCM

Best for a Straightforward MetaTrader Experience: HYCM

HYCM is a top-rated forex broker, offering investors access to 69 currency pairs. In addition to Forex trading, HYCM provides its customers with leverage, stock trading, ETFs, commodities and more. Signing up for an account is fast and easy — you can open an account in just 10 minutes.

With a customizable fee system, HYCM has something to offer everyone, including experienced and new investors. The platform contains plenty of educational materials and investing resources for all its users. Unfortunately, HYCM does not serve customers in the USA; however, it is a great choice for individuals living in 140 other countries.

Pros:

• Wide range of currency pairs offered
• Extensive education tools
• Streaming forex news headlines via the MetaTrader platform suite
• Competitive pricing 
• Up to 200:1 leverage on many pairs

Cons:

• Not currently accepting US Clients
• Inactivity fees

Read Benzinga’s Full HYCM Review

3. CedarFX

Best for Eco-Conscious Traders: CedarFX

CedarFX believes in combining the finest market conditions with excellent pricing and technology so clients can grow their accounts. A low spread generally indicates that volatility is low and liquidity is high and CedarFX prides itself

CedarFX offers 2 account types: 0% commission accounts and eco accounts.

Pros:

• 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/withdrawls with Bitcoin

Cons:

• Limited number of educational resources for new investors

Read Benzinga’s Full CedarFX Review

4. IG Markets

Best Execution: IG Markets

IG Markets gives clients access to trade up to 80 different currency pairs. The broker requires a $250 minimum deposit.

IG accepts U.S.-based clients due to oversight from the CFTC and NFA. IG holds your money in segregated accounts under trustee arrangements for added security. In addition to its proprietary trading platform, IG offers support for 3rd-party forex platforms such as MetaTrader 4 and ProRealTime. It also allows application programming interface (API) trading.

Pros:

• 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

Cons:

• U.S. traders can currently only trade forex
• Customer service options are lacking
• No 2-factor authentication on mobile

Read Benzinga’s Full IG Markets Review

5. AXI

Best for MT4 Traders: AXI

Axi Trader is a unique platform that focuses on helping you sharpen your skills. When you sign up, you get $50,000 to use for paper trading so that there’s no risk as you learn more about the forex and CFD markets.

Axi Trader also makes it easy to learn as you go, providing you with:

Pros:

• More than 70 forex pairs
• CFDs on stocks, indices, oil, precious metals, commodities and crypto
• User-friendly MetaTrader 4 platform
• Copy trading to learn from professional traders
• Good educational material including a demo account, tutorials and videos
• Advanced analytics driven by AI and ML

Cons:

• Customer service 24/5

Read Benzinga’s Full AXI Review

6. Interactive Brokers

Best for Advanced Forex Traders: Interactive Brokers

Interactive Brokers is a premier broker for trading forex, stocks, ETFs, cryptocurrency, bonds, options, futures, and more. Clients have access to 100+ tradeable currency pairs, tight spreads as narrow as 1/10 PIP, real time quotes from 17 of the world’s largest FX dealers, and low commissions with no hidden spreads or markups.

Pros:

• Comprehensive, quick desktop platform
• Mobile app mirrors full capabilities of desktop version
• Access to massive range of tradable assets
• Low margin rates
• Easy-to-use and enhanced screening options are better than ever

Cons:

• Trading platform may be intimidating for new investors

Read Benzinga’s Full Interactive Brokers Review

7. (Non US) eToro

Best for Non-US Traders: eToro

eToro specializes in social trading, which is ideal for beginners since you can follow the trades of expert traders with a proven track record. In addition to its world-class social trading network, eToro has excellent educational resources for forex beginners. eToro’s intuitive multi-asset trading and social trading platforms and apps can be used by anyone immediately. Unfortunately, eToro does not support the MetaTrader 4 and 5 (MT4 and MT5) trading platforms. 

Pros:

• imple 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

Cons:

• High non-trading fees

Read Benzinga’s Full eToro Review

8. (Non US) AvaTrade

Best for Leverage: AvaTrade

AvaTrade, one of the most secure brokers in the industry, carries 7 regulations across 6 continents (Europe, Australia, Japan, British Virgin Islands, UAE and South Africa). You’ll be pleasantly surprised by its asset availability, leading platforms and generous trading conditions (you can leverage your positions up to 400:1).

Pros:

• Controlled by regulatory agencies of multiple countries
• Choice offered in terms of trading platforms
• Support available in 14 languages and trading platforms in 20 languages
• Practice/demo account available for trying out
• Breadth of trading assets

Cons:

• Does not accept customers from the U.S. as it isn’t regulated in the U.S.
• Transferring funds to the account may take up to five days; withdrawals could take up to 10 days

Read Benzinga’s Full AvaTrade Review

9. (Non US) FXCC

Best Bonus: FXCC

FXCC is the best brokerage for non-U.S. users, allowing you to choose from 70 currency pairs, several CFD options, spot metals and the top 8 cryptocurrencies. Bitcoin, Ethereum and Litecoin are just a taste of the popular cryptocurrencies that are available. You might also invest in 12 popular stock indices, spot WTI and Brent crude oil.

Pros:

• ECN/STP broker model
• 100% first deposit tradable bonus
• Free Virtual Private Server (VPS)
• Supports MetaTrader 4
• Has an offshore subsidiary for high leverage trading

Cons:

• Does not accept U.S. based traders or U.S. citizens as clients
• Only supports 1 trading platform

Read Benzinga’s Full FXCC Review

10. Pepperstone

Best for Customer Service: Pepperstone

Investing with Pepperstone makes it easy for you to invest in a range of options like:

• Forex
• CFDs
• Stocks
• Crypto

The platform offers 24/7 customer service and the option to use MetaTrader or cTrader. Looking into foreign currency pairings makes it easier to protect yourself against losses and market fluctuations. You can learn as much as you need through Pepperstone’s educational platform, and you can build a diverse portfolio that will help you increase your net worth and build wealth.

Pros:

• Access to over 61 forex pairs and over 60 stock CFDs
• Leverage available for both forex and cryptocurrency trading
• Wide range of educational tools and courses that both beginners and experts can use
• 24/7 customer service

Cons:

• Not currently available to U.S. traders
• No option to purchase stocks, bonds or mutual funds directly; only CFDs are available

Read Benzinga’s Full Pepperstone Review

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.

If you choose a forex broker that uses automation, you can try trading bots. These bots are AI-enabled programs that use prevailing information to trade on your behalf, and each bot uses a specific trading plan that is designed to help increase your earnings. However, trading bots are not perfect. You must do your research, set a budget and monitor your account for best results.

Why Trade Forex

Making a forex transaction involves the simultaneous purchase of 1 currency and the sale of another at a given rate of exchange known as an exchange rate. Forex traders make a profit by buying 1 currency pair low and selling it high, or by selling 1 currency pair high and buying it low.

Many people like to trade forex because they can get started so easily by opening up a trading account and downloading a free trading platform like MetaTrader. You can get in and out of positions rather quickly, easily trade a your pace and make money. This is often the place where investors start because they can get a handle on the market without feeling confusion over the asset they’re trading.

Forex Pros and Cons

The forex market has a unique set of pros and cons for traders that include those listed below.

Pros

• High leverage: Because an exchange of currencies at the going market rate has no net value, the use of leverage in forex trading allows you to control quite large positions with a rather small margin deposit. This increases your risk but also lets you benefit from relatively small exchange rate movements. 
• High liquidity: The forex market is the largest financial market in the world, so it has a very high level of liquidity in the major currency pairs. This allows for sizable transactions to be executed in those pairs at virtually any time during normal trading hours. 
• Around-the-clock trading: The forex market remains open for trading at all times from 5 p.m. EST on Sunday until 5 p.m. EST on Friday, even during U.S. holidays. This provides constant trading opportunities during market hours. 

Cons

• Fewer asset choices: While many stocks can be traded, only a relatively few currency pairs are available to forex traders, and not all of them are highly liquid like the majors.
• Volatility: Strong movements can occur in the forex market as new information is digested by participants. This volatility can result in unexpected gains or losses for traders. 
• Unregulated OTC market: The Interbank forex market trades over the counter (OTC) and so it remains largely unregulated. Still, some regulations are put in place in many jurisdictions to protect retail traders making transactions through online brokers. 

Forex Markets Explained

In the forex market, traders agree to exchange 1 currency for another to make a transaction in that currency pair at a particular level known as the exchange rate. Like stock prices, this exchange rate fluctuates based on supply and demand factors, as well as on the forex market’s overall expectations of future events. 

Forex traders can make money on a currency transaction in 2 ways. First, if they buy or go long a currency and it goes up in value versus the sold currency, then they earn a profit. Second, if they sell or go short a currency and it goes down versus the bought currency, then they also profit. 

Many currency pairs quoted in the forex market show substantial volatility or fluctuations, which can result in gains or losses for traders. You can review the EUR/USD pairing over the past week, month, year or more. Seeing the history of the pairing gives you quite a bit of information, and you can compare the stock’s movements to current events in either the U.S. or European Union.

During the comparison process, you may notice that the pairing moves inverse to the news you’re reading. As you read further, you learn how to anticipate where currencies will move based on current events.

Risk and Reward in Forex Trading

Rewards are generated in forex trading when you take a long or short position in a currency pair that subsequently appreciates in value. The risk in doing a forex transaction is when the market doesn’t perform as expected once you have done a forex trade. 

Many brokers allow traders to magnify the gains or losses they take on a position via the use of leverage. Leverage is typically expressed as the ratio of the size of a position you can control by placing one unit of base currency on deposit as margin. Hence, a 500:1 leverage ratio would mean that you can control a $500 position with a $1 margin deposit. 

Furthermore, most successful traders have a minimum risk/reward ratio for a trade before they will consider taking it, such as 1:2 or 1:3. For example, if you think the chances of a trade making 20 pips is around the same as the chances of it losing 10 pips, then your risk/reward ratio of that trade is 1:2. If that meets your risk/reward ratio criteria, then you might consider that trade worthy of executing. 

Choose Your Forex Broker Wisely

Since your forex broker will be your primary trading partner, you want to choose one carefully to make sure they are reputable and will fit your requirements as a trader. Open a demo account with an online broker you’re thinking of using to see whether it is a good fit. Demo account trading can also help prevent potentially costly errors that might arise from you being unfamiliar with the broker’s trading platform. 

Frequently Asked Questions

Q

Can I trade forex with $10?

1

Can I trade forex with $10?

asked 2023-01-12

Jay and Julie Hawk

A

1

Yes, some online forex brokers will accept clients with a very low minimum deposit like $10 or even less.

Answer Link

answered 2023-01-12

Benzinga

Q

What is a PIP?

1

What is a PIP?

asked 2023-01-12

Jay and Julie Hawk

A

1

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

answered 2023-01-12

Benzinga

Q

Can I trade forex without a broker?

1

Can I trade forex without a broker?

asked 2023-01-12

Jay and Julie Hawk

A

1

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

answered 2023-01-12

Benzinga

Methodology

These top brokers were chosen for this review for various reasons depending on the specific category in which we felt they excelled. Baseline requirements included the strength of their regulatory environment, their generally good overall reputation with clients earned over an extended period and a substantial number of currency pairs available for trading. 

The post Best Forex Brokers by Jay and Julie Hawk appeared first on Benzinga. Visit Benzinga to get more great content like this.