Best Forex Broker
Using an unregulated forex broker in the United States can be very risky. Luckily, you have a few legal options to explore. Read on to find out more.
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Here are best 5 forex brokers in the USA:
- tastyfx for low spreads
- OANDA for transparent pricing
- Forex.com for automated trading
- Thinkorswim for experienced traders
- Interactive Brokers for professionals
Despite strict regulations, there's a reason why forex trading remains popular. It is the most liquid financial market. Plus, it's open 23 hours a day for 5.5 days a week.
Forex is the perfect market for risk-takers. But which broker can be trusted? Which forex broker can help you reach your trading goals?
In this list, find out which forex brokers have the best trading tools, lowest fees, and authorization to operate in the US.
Earn Cash Rebates of up to $17 per Million
Earn cash rebates from $5 to $17 per million with the Elite Trader Program. Designed exclusively for high volume traders. Terms and conditions apply.
| Monthly Volume Requirement | Rebate per Million Traded |
|---|---|
| $10M-$49M | $5 |
| $50M-$249M | $7 |
| $250M-$499M | $10 |
| $500M-$1B | $15 |
| $1B+ | $17 |
Best Forex Brokers
Traders who plan to actively day trade forex typically need $2,500 or more since forex is leveraged.
If you still want to trade forex despite the margin required, read on.
tastyfx: Best For Low Spreads
| Pricing | Spread-only ($0 commission) |
|---|---|
| Number of Currency Pairs | 80+ |
| Spread | Starts at 0.8 pips[1] |
| Inactivity Fee | None[2] |
| Withdrawal Time | 24 hours for bank wire; 3-5 working days for card or ACH[3] |
tastyfx (formerly IG US) is an award-winning forex broker and is great for those looking for low spreads. Its spread starts at only 0.8 pips on major pairs like EUR/USD, one of the lowest in the industry for retail traders.
In the Market Data section, there are tools you can use to study currency pairs and aid you in your trading decisions. You can see current chart patterns, price correlations, and client sentiment.
tastyfx's trading platform is easy to use. There are free technical packages such as RSI, Moving Average, and Fibonacci. It also features third-party signals if you want to simply copy a trade.
For those who want a more professional platform, ProRealTime enables you to completely customize your charting. However, for those who trade less than 4 standard contracts a month, there is a fee of $40.[4]
As of September 2024, it has an average speed of 0.017 sec between order ticket and execution.[5]
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OANDA: Best For Transparent Pricing
| Pricing | Spread-only ($0 commission); Elite Trader |
|---|---|
| Number of Currency Pairs | 68 |
| Spread | Starts at 1.4 pips[6] |
| Inactivity Fee | $10 monthly after 12 months of inactivity[7] |
| Withdrawal Time | 1-2 business days for bank wire; 3-5 business days for debit card[8] |
OANDA is a forex broker you can trust with its transparent pricing. On their website, you can easily check the latest spread they charge for the 68 currency pairs they offer.[9]
It has partnered with third-party platforms to elevate your forex trading experience. Some of these include:
- Technical Analysis (powered by Autochartist)
Scan and analyze charts easily with automatic chart pattern recognition. Receive alerts for specified patterns, correlating signals, and potential trading opportunities. - TradingView Charts
Get access to the thousands of built-in and community indicators from one of the most popular technical analysis platforms.
OANDA also has its Economic Overlay, where you can check important economic announcements and events within its platform. With the Dow Jones FX Select, you get real-time breaking news, expert trend analysis, and in-depth policy commentary.
If you have an unused margin over $10,000, you can earn interest when you meet the terms.[10] Your money earns even if it's not invested.
High-volume traders may also benefit from the Elite Trader program. Eligible traders can enjoy discounts, cash rebates, expert market analyst insights, etc.
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Forex.com: Best For Automated Trading
| Pricing | Spread-only ($0 commission); RAW Spread (tight spreads + low commission) |
|---|---|
| Number of Currency Pairs | 80+ |
| Spread | Starts at 1.2 pips (Spread-only); as low as 0.0 pips (RAW pricing)[11] |
| Inactivity Fee | $15 monthly after 12 months of inactivity[12] |
| Withdrawal Time | 48 hours (bank transfer); 48 business hours (debit); 2 business days (wire)[13] |
Forex.com is the only forex broker in the United States that features an easy automation tool for non-programmers. You can easily automate your trades through Capitalise.ai.
Capitalise is a user-friendly auto-trading strategy builder. You can backtest, simulate, and set alerts. Automation is very easy since it's done in plain English.
Another great feature is the algorithm-based signal provider called SMART Signals. Here, you can find potential trade ideas on whether to buy or sell. It also automatically sets the stop loss and takes profit levels for you.
Forex.com also has a tool that helps you manage your trading psychology. Through Performance Analytics, you can monitor your discipline and analyze your trading behavior and habits, which can reduce your mistakes.
It has two pricing models. First, a spread-only account is ideal for traders who want a traditional currency trading experience. Then, there is a RAW Spread account that is for traders who are seeking ultra-tight spreads with fixed commissions.
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Thinkorswim: Best For Experienced Traders
| Pricing | Spread-only ($0 commission)[14] |
|---|---|
| Number of Currency Pairs | 70+ |
| Spread | Around 1.9 pips for EUR/USD* |
| Inactivity Fee | $0 |
| Withdrawal Time | Same-day for internal bank transfer and external wire transfer; 1-2 business days for external bank transfer[15] |
thinkorswim® (TOS) is one of the most famous platforms used by traders. It's more commonly used for stocks, but it also features forex trading. This is perfect for traders looking to trade various assets in a single platform.
Although not published on their website, the spread is around 1.9 pips for EUR/USD, as checked in the TOS platform.
It has a comprehensive list of studies that you can use like candlestick recognition studies.
At thinkorswim, you also get access to economic data and real-time news that can be filtered according to the currency pair. You can also set custom alerts so you don't miss any trading opportunities.
It takes a while to get used to the platform, but you can create a guest pass account to access the platform for free and simulate trades. This way, you can check if this is a good match for you.
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Interactive Brokers: Best For Professionals
| Pricing | Tight spread + low commission |
|---|---|
| Number of Currency Pairs | 100+ |
| Spread | Starts at 0.10 pip[16] |
| Inactivity Fee | $0 |
| Withdrawal Time | Same-day processing if before cut-off[17] |
Interactive Brokers (IBKR) is better suited for professional forex traders. It has the most pairs offered, low commissions despite the large amount traded, and flawless execution.
Spreads are as narrow as 0.10 pip and commissions only range from 0.08 to 0.20 basis points (bps), with no hidden spreads or markups.[16] You can convert a million dollars and the fee is only $20.
There are ways to trade forex: currency conversion or leveraged forex trading. However, for leveraged trading, only those with over $10 million in assets are eligible.[18]
The minimum order size for spot USD FX trades is $25,000.[19] For orders that exceed the standard maximum, IBKR has a large-size order facility that will still execute your orders.
Its FXTrader provides you with an optimized trading interface and tools built for the currency markets. It includes real-time streaming quotes, up and down indicators, trading volumes, pending trades, executions, positions, and average price plus P&L.
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What is Forex Trading?
Forex trading, or foreign exchange trading, involves buying and selling currencies for profit. The major currency pairs traded are the following:
- EUR/USD (Fiber)
- GBP/USD (Cable)
- USD/JPY (Gopher)
- USD/CHF (Swissie)
- USD/CAD (Loonie)
- AUD/USD (Aussie)
You can either scalp, day trade, or swing trade currency pairs. It doesn't matter if the exchange rate appreciates or depreciates, at forex, you can profit both ways.
With that being said, you can also lose money even on an uptrend.
Is Forex Trading Allowed in the USA?
Yes, forex trading is allowed in the United States, but it has stricter rules than its global counterparts thanks to the Dodd-Frank Act.[21]
For instance, the maximum leverage for US retail forex traders is limited to 50:1 on G11 currency pairs and 20:1 on minor pairs as part of the rules set by the NFA Rulebook.[22]
In comparison, leverage can be as high as 1000:1 for some European forex brokers. Other global brokers also allow CFDs for forex, while the US does not.
Is CFD available in the US?
No, Contract for Difference (CFD) is unavailable in the United States because it's an over-the-counter product.
This is also why many legitimate global brokers do not accept US clients since forex trading is typically offered in the form of CFDs.
For example, EU-based brokers such as XTB, Saxo, and CMC Markets are legitimate forex brokers. However, since they do not have the necessary licenses from US regulatory bodies, they do not accept US clients on their platforms.
No, you cannot. Forex trading is all about making the most out of price fluctuations, which can change within seconds. You need a forex broker to execute trading strategies quickly and with minimal fees.
How Do I Start Trading Forex?
Ready to get started? Here's how you can start trading forex:
- Choose a forex broker and open a demo account
Register with a forex broker that best fits your needs. Try their free trial or open a demo account to test its features. - Backtest and simulate to find your trading edge
Using your demo account, try out all the trading strategies that you want. Select the best one, then backtest and simulate it on the FX market to see if it can be profitable.A common strategy traders use in forex is price action.
- Trade with real money
Once you start getting consistent wins and can risk real money, begin trading with a live account.How much money do I need to start trading forex? It ultimately depends on the minimum deposit required by your FX broker. If you're using a broker with a low or no minimum deposit, you can start trading with just $50 or $100. - Master your trading psychology
Trading live can bring out extreme emotions you didn't even know you had. If you don't manage them well, they can really mess with your trading journey.Reading books about trading psychology can help you navigate your emotions better. You might want to check out Trading in the Zone by Mark Douglas or The Essence of Trading Psychology by Yvan Byeajee.
HOW TO KNOW WHICH BROKER IS FOR YOU?
Not all forex brokers are the same. Here are some factors to consider when choosing your forex broker.
- Pricing
The two types of pricing used by forex brokers are spread-only and RAW Spread accounts. Spread-only accounts have zero commission as it's already included in the spread. RAW Spread accounts have a lower spread but will charge you a commission per trade. - Withdrawal Options
Brokers have different processing times and methods for withdrawals. If you want a faster transaction, choose brokers with same-day processing on your preferred withdrawal method. - Ease of Use
If you have to spend so much time navigating the platform every time you open and close a trade, consider another broker. Speed is crucial in trading and your broker shouldn't be too complex for you. - Execution Speed
The forex market is extremely liquid, so bad executions are almost not a problem for brokers. However, some brokers execute trades better than others. You can check the website for their latest average execution speed. - Trading Tools
Depending on the strategy you use, you might require specific trading tools from your broker. If there is a free trial, you can use this to get a feel of how trading on the platform is. - Compliance
The US has stricter rules for forex brokers compared to other countries. All brokers on our list are properly registered with US regulators. But if you decide to choose a different broker, make sure to check their license.
Methodology
We understand that each forex trader would have a different preference for a broker depending on the pricing, speed, and trading tools offered. So we looked for platforms that could address the various needs of forex traders.
First of all, we made sure that all the forex brokers on our list were properly registered and regulated by the US. We also checked the reliability of each broker by checking how established they are in the industry.
We also checked various pricing methods offered by brokers to accommodate traders who would prefer having spread-only or RAW Spread accounts.
Lastly, we looked for brokers who can cater to all types of brokers from retail traders to professional traders by checking the minimum and maximum trade sizes allowed by the brokers.
How to Avoid Forex Trading Scams
If you're new to forex trading, remember that you shouldn't let anyone trade your money for you. Just by following this one rule, you'd be able to avoid many, though not all, forex scams out there.
If someone is telling you to "buy forex" or "invest in forex" to double your money with low risk, run. The actual foreign exchange market is too volatile for a retirement account.
To avoid fraudsters, watch out for these common forex scam signs:
- Promising you'll make guaranteed profits with low risk.
- Claiming there's no such thing as a bear market in forex.
- Charging high spreads, making it tough for you to break even.
- Offering forex trading robots that haven't been properly reviewed or tested.
- Engaging in Ponzi or pyramid schemes.
- Offering high leverage; remember, the US limits it to 50:1.
- Rushing you to buy because the market is supposedly "opening" in a few minutes.
- Offering CFDs to US clients, even though it's not allowed in the USA.
- Accepting US clients even though they're an unregulated offshore broker.
- Soliciting money as signal sellers, promising over 90% win rates.
All legitimate forex brokers must be properly licensed and regulated by the Commodity Futures Trading Commission (CFTC) and the National Futures Association (NFA).
BOTTOM LINE
Forex trading can be a great way to earn from the financial markets, especially for those who have a high-risk appetite. Choosing a broker to start forex trading would mainly depend on your priorities as a trader.
Do you prefer brokers with low spreads? With a short withdrawal processing time? With an alternative pricing model?
By first listing the factors you're looking for in a broker, it would be easier to choose among the five we have listed in this article.
References
- ^ tastyfx. Forex Spreads, Retrieved 09/01/2024
- ^ tastyfx. How do I manage my closed forex trading account?, Retrieved 09/01/2024
- ^ tastyfx. Why haven't I received my funds?, Retrieved 09/01/2024
- ^ tastyfx. How much does ProRealTime cost?, Retrieved 09/01/2024
- ^ tastyfx. Execution scorecard, Retrieved 09/01/2024
- ^ OANDA. Our forex pricing, Retrieved 01/27/2024
- ^ OANDA. Inactivity fees, Retrieved 01/27/2024
- ^ OANDA. Withdrawals, Retrieved 02/21/2024
- ^ OANDA. Spreads and margins, Retrieved 01/30/2024
- ^ OANDA. Your money never sleeps, Retrieved 02/22/2024
- ^ FOREX.com. Trading prices and execution, Retrieved 03/15/2024
- ^ FOREX.com. Does FOREX.com charge inactivity fees?, Retrieved 03/15/2024
- ^ FOREX.com. Withdrawals, Retrieved 02/21/2024
- ^ TD Ameritrade. Pricing: Forex Currency, Retrieved 03/15/2024
- ^ Schwab. How to transfer funds out of your account, Retrieved 02/21/2024
- ^ Interactive Brokers. Commissions Spot Currencies, Retrieved 03/15/2024
- ^ Interactive Brokers. Withdraw Funds, Retrieved 02/21/2024
- ^ Office of the Law Revision Counsel. 7 USC 1a: Definitions, Retrieved 03/15/2024
- ^ Interactive Brokers. Spot Currency Minimum/Maximum Order Sizes, Retrieved 03/15/2024
- ^ BIS. Triennial Survey shows global foreign exchange trading averaged $7.5 trillion a day in April 2022, Retrieved 03/15/2024
- ^ Forbes. New CFTC Forex Trading Rules Call For 50:1 Leverage, Retrieved 09/04/2024
- ^ NFA. Financial Requirements, Retrieved 09/04/2024
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Note: This website is made possible through financial relationships with some of the products and services mentioned on this site. We may receive compensation if you shop through links in our content. You do not have to use our links, but you help support CreditDonkey if you do.
OANDA Corporation is regulated by the CFTC/NFA. OANDA is a member Firm of the NFA (Member ID: 0325821). CFDs are not available to residents in the United States. Affiliate receives a commission for accounts opened through the link on this page
OANDA CORPORATION IS A MEMBER OF NFA AND IS SUBJECT TO NFA'S REGULATORY OVERSIGHT AND EXAMINATIONS. HOWEVER, YOU SHOULD BE AWARE THAT NFA DOES NOT HAVE REGULATORY OVERSIGHT AUTHORITY OVER UNDERLYING OR SPOT VIRTUAL CURRENCY PRODUCTS OR TRANSACTIONS OR VIRTUAL CURRENCY EXCHANGES, CUSTODIANS OR MARKETS
Trading in digital assets, including cryptocurrencies, is especially risky and is only for individuals with a high risk tolerance and the financial ability to sustain losses. OANDA Corporation is not party to any transactions in digital assets and does not custody digital assets on your behalf. All digital asset transactions occur on the Paxos Trust Company exchange. Any positions in digital assets are custodied solely with Paxos and held in an account in your name outside of OANDA Corporation. Digital assets held with Paxos are not protected by SIPC. Paxos is not an NFA member and is not subject to the NFA's regulatory oversight and examinations.
Leveraged trading in foreign currency contracts or other off-exchange products on margin carries a high level of risk and may not be suitable for everyone. We advise you to carefully consider whether trading is appropriate for you in light of your personal circumstances. You may lose more than you invest. Information on this website is general in nature. We recommend that you seek independent financial advice and ensure you fully understand the risks involved before trading. Trading through an online platform carries additional risks.
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