The trading of foreign currencies, or simply ‘Forex’ or ‘FX’, is arguably one the largest investment markets in the world. To illustrate just how big the forex scene has become, it is estimated that the industry is responsible for more than $5 trillion in trading volumes – each and everyday.
It is important to note that this trading scene is not just reserved for institutional investors. On the contrary, the forex investment space is utilized by traders of all sizes. Whether you’re looking to trade forex full-time, or for a couple of hours a day, there are now heaps of established trading platforms available to choose from.
But with so many platforms to choose from, how do you go about finding the best forex brokers? What should you look for when choosing a FX brokerage service? Read our guide to find out the best forex brokers for 2019.
Forex Brokers Ranked By Category
The main types of forex brokers are Dealing Desks (DD ) and No Dealing Desk (NDD).
Forex brokers that operate through Dealing Desks (DD) make money through spreads and providing liquidity to their clients. They are also called “market makers”. On the other hand, NDD brokers simply link two parties together and do not execute their clients’ orderes through a Dealing Desk.
Now that we understand the division of forex brokers, it is also important to know that there are many different types of forex brokers out there. The different options available nowadays means that you are more likely to find a forex broker suited to your needs – whether it be high leverage, low spreads, or a large forex bonus. Below are the different types of forex brokers explained.
- Paypal Forex brokers
- High Leverage Forex Brokers
- STP Forex Brokers
- Low Spread Forex Brokers
- Islamic Forex Brokers
- Forex broker bonus
High leverage forex brokers provide the chance to use borrowed capital as a funding source. With leverage trading, traders can open FX positions with a small balance, and employ risky tactics such as opening a large number of trades at the same time.
Leverage in FX trading can go as far as 1:1000, meaning that for every $100 in your trading account, you could be trading up to $100,000 in value. Some of the most popular forex brokers with high leverage include XM Global currently offering leverage up to 1:888 and FXGlory with 1:3000 max leverage.
It is crucial to note that higher leverage in a forex trading account is perceived as riskier due to the possibility of losing all capital. Therefore, we recommend that you take precautions when opening trades with leverage, especially for beginners who tend to be unfamiliar with forex money management techniques.
STP forex brokers are platforms offering STP trading accounts (“Straight Through Processing”). STP brokers are similar to ECN brokers in that the broker’s trading commission is included into the spread, which makes it highly affordable.
STP trading accounts also begin at a low minimum deposit of $10 and offer very small transaction sizes. The trades are executed in the real market (the interbank market), where the big banks play the role of liquidity providers.
Trading with STP forex brokers is typically more cost-effective since STP brokers do not profit from the loss of traders (unlike Dealing Desk brokers) and they typically only charge on the spread. STP forex brokers also accommodate traders with different strategies (scalping, hedging, etc) , and offer the possibility of using high leverage. These USPs make STP brokers one of the best choices for forex trading. Some of the best STP forex brokers for 2019 are IC markets and Vantage FX.
Low spread forex brokers charge small trading fees, which is particularly interesting for traders using scalping strategies who open various trades within one day and want to keep their commissions as low as possible. In order to cut their losses, those traders benefit from cheap forex brokers with tight spreads.
Since the main goal of trading is to secure personal funds and limit losses, using a low spread fx broker makes up a large part of any profitable forex trading stategy. Different brokers offer different spreads, but some of the cheapest options in the market today include Pepperstone with spreads starting at zero, and IC Markets, with an average spread of 0.1 pips.
According to Islamic law, Muslims are prohibited from trading for profit and their finance must be driven by ethics and justice. Islamic clients are also prohibited from executing risky trading strategies, and must not use brokers with high interest fees which according to Islamic law is exploitative and unlawful. Islamic forex brokers, also known as ‘no swap brokers” have therefore emerged in order to allow Muslim clients to trade forex in compliance with the Shariah law. These accounts do not charge rollover interest on positions held overnight but do charge a trading fee on open positions. Some of the best Islamic trading accounts are eToro and IC Markets.
A good Forex broker bonus is a key characteristic for choosing a forex trading account. A forex bonus is a promotion offered to new or existing customers by a forex broker which can be accessed by signing up on a website or by depositing funds into your forex trading account.
There are 2 different types of forex bonuses. The first type is a forex deposit bonus which is trigger when a client makes a deposit. These are usually measured in %. An example of this is a 50% forex deposit bonus, which means that if you deposit $1000 you will receive $500 on top and have $1500 to trade with.
A forex no deposit bonus is a promotion which does not require the client to deposit funds. The only thing the client must do is sign up to the website, and their free forex bonus will be immediately available to trade with. This is a great option for beginners or those with limited funds as it allows you to trade the forex markets without risking your own funds, and to potentially make profits. Some of the best forex broker bonuses available are offered by Xtream Forex (100% initial deposit bonus), and RoboFX with a classic bonus of up to 115% on deposit.
Best UK Forex Brokers for 2019
If you’re looking for a forex platform that makes is super easy to trade, alongside a full range of educational tools and fundamental analysis guides, then we would suggest exploring Markets.com.
The platform has a number of regulatory licenses, including that of CySEC, the FSCA (South Africa) and ASIC in Australia. In terms of the number of currencies you can trade at the broker, Markets.com host more than 50 different pairs, across majors, minors and even exotics.
✅ Information portal covers trading guides, fundamentals and technicals
✅ Regulated by multiple jurisdictions
✅ Free demo accounts
✅ More than 50 forex pairs
✅ Spreads include commission fees so all costs are transparent
✅ Withdrawals are free
❌ Not authorized by the UK’s FCA
Best Forex brokers for U.S customers
Although U.S. citizens are somewhat restricted when it comes to trading CFDs, the forex marketplace is a different story. As such, there are a range of well-established forex platforms that allow U.S. citizens to trade currencies without any hindrances.
Just remember, if you are based in the U.S., you’ll be required to submit additional information during the application process with respect to your tax obligations. Furthermore, all of the following forex brokers are registered with the Commodity Futures Trading Commission (CFTC), meaning they are fully authorized to accept U.S. citizens.
Best Forex brokers for Australia & New Zealand
For those looking for a forex broker and located in either Australia or New Zealand, we would recommend taking a closer look at Plus500. Although the broker have a very strong presence in the UK space, they hold all of the required licenses to accept traders from both Australia and New Zealand.
As a company listed on the stock exchange, Plus500 discloses all its financials and is considered one of the most reputable forex trading platforms in the industry. The minimum deposit for forex trading on Plus500 is $100 and the leverage offered on their forex trading accounts is a maximum of 1:30.
Best Forex sites for beginners
If you are starting out in forex, we would point you in the direction of eToro. Not only is their forex platform really easy to navigate through, but the broker is also pioneer for social and copy trading.
With their copy trading feature, you will have the ability to follow top-rated forex brokers on the network and copy their trades or even their entire portfolio if you wish to do so. By mirroring the trades of more experienced investors, you will have a much better chance of making profits than if you were to rely on trial and error learning. Their platform is also highly interactive and you can discuss forex trading tips and strategies with other members in the community to get the most out of your experience.
Best Forex brokers for advanced traders
If you are looking for a highly advanced platform and you are a more experienced trader, then FP Markets is probably your best bet. Launched in 2005 and based in Australia, the broker offers huge leverage levels of up to 500:1. On top of this, and perhaps most importantly, FP Markets are an ECN broker, meaning that among other benefits, you'll have access to ultra-low spreads.
Cheap Forex brokers
Trading fees are an important factor to consider when searching for a new forex broker. This is especially true if you trade smaller amounts, as low-level traders are often penalized for small trade sizes. As such, Plus500 are potentially one of the most competitively priced forex brokers operating in the market. Their commission-free pricing system is further amplified by tight forex spreads, especially in the major pairings.
Top Forex brokers by reputation
Although there are a plethora of forex brokers that have been established for longer, eToro have one of the strongest reputations in the online forex space. One of the key reasons for this is that their platform is suited for all investor-types. Moreover, they guide beginners through the forex process via their highly comprehensive trading academy.
What is Forex trading?
Forex, or simply FX, refers to the trading of foreign currencies. As domestic currency valuations fluctuate on a second-by-second basis, this makes it a highly active investment segment. The forex trading industry is now so fundamental that more than $5 trillion is traded on a daily basis.
When trading two currencies against one another, this is known as a ‘pairing’. For example, GBP/USD would be one pairing, while USD/JPY would be another.
Generally speaking, forex pairings can be broken down into three key categories.
Firstly, and as the name suggests, major pairings must include the world’s most dominant currency - the USD. As such, each pairing must contain the USD on one side. These pairings must also include an additional major currency, such as GBP, EUR or JPY.
Here's a full list of the major pairings.
- EUR/USD: Euro/US dollar
- USD/CAD: US dollar/Canadian dollar
- USD/JPY: US dollar/Japanese yen
- USD/CHF: US dollar/Swiss franc
- GBP/USD: British pound/US dollar
- AUD/USD: Australian dollar/US dollar
- NZD/USD: New Zealand dollar/US dollar
Minor pairings refers to currencies that are still ultra-strong, however they do not need to include the USD. Example pairings includes the likes of EUR/GBP, GBP/JPY and AUD/JPY.
Here's a list of some of the most widely traded minor pairings.
- CHF/JPY: Swiss franc/Japanese yen
- EUR/GBP: Euro/British pound
- GBP/CAD: British pound/Canadian dollar
- NZD/JPY: New Zealand dollar/Japanese yen
- EUR/AUD: Euro/Australian dollar
- GBP/JPY: British pound/Japanese yen
Finally, exotic pairings will include one major currency alongside a currency from a less dominant economy. These trading pairs often struggle to attract as much liquidity as major and minor pairings and thus, operate in a more volatile nature.
Here are some examples of some widely traded exotic pairs.
EUR/TRY: Euro/Turkish lira
NZD/SGD: New Zealand dollar/Singapore dollar
USD/HKD: US dollar/Hong Kong dollar
How does a Forex broker work?
Essentially, the role of an online forex broker like ATFX is to facilitate currency trading for investors. The platform will be responsible for matching buyers and sellers, subsequently allowing investors to trade in the open marketplace.
On top of providing the required tools for online investors, forex brokers will facilitate deposits and withdrawals, and in most cases, will provide an array of educational tools, as well as fundamental and technical analysis.
Due to the sheer size of the forex broker marketplace, each platform will have its own advantages and disadvantages. However, one of the most important factors that you need to consider is whether or not the broker holds the required regulatory licenses, and that they have acquired an established reputation.
What kind of Forex trading platforms are there?
1. MetaTrader 4 (MT4)
The underlying trading platform used by the vast majority of online forex brokers is that of MetaTrading 4, or simply MT4. First launched in 2005, MT4 is an electronic trading platform that facilitates ultra-fast forex trades in a safe and secure eco-system.
Prior to MT4, forex brokers were forced to design and host their own trading technologies. However, due to the sheer popularity of MT4, alongside the ease at which online brokers can install it in to their platforms, the protocol is now commonly used by most forex brokers.
2. MetaTrader 5 (MT5)
Alternatively, some brokers now use the more recent MetaTrader platform, which is that of MT5. MT5 has the capacity to facilitate trades across stocks, futures and of course CFDs that represent forex pairs.
Competing with both MT4 and MT5 is that of cTrader. The platform also offers highly advanced capabilities in the trading of forex, subsequently providing up to 70 charting indicators across 54 time-frames.
What type of Forex trading accounts are there?
Although forex trading is accessible by investors of all shapes and sizes, most brokers will allocate a specific trading account based on your individual circumstances. In most cases, this will either be in the form of a retail/individual account, or for more experienced traders, an institutional account.
Retail/Individual client account
Regarding the former, this will be an account best suited for casual traders, or for those with very little experience. By having a retail/individual client account, you’ll ability to obtain leverage is likely to be limited. If leverage is offered, this will be for ratios significantly lower in comparison to institutional accounts.
Depending on where your are based, retail/individual traders are sometimes accustomed to regulatory compensation schemes and financial protections, should the broker in question not have your best interests at heart.
Institutional client account
When it comes to an institutional account, you’ll need to go through a much more stringent client onboarding process, and be able to prove that you have the required knowledge and experience to trade significant volumes. Once you are set up, you’ll likely be offered substantial levels of liquidity, with brokers facilitating ratios of up to 500:1.
How to choose a Forex broker? 10 tips
Due to the sheer size of the forex brokerage industry, it can be a difficult task trying to find the best platform for your individual needs. Here’s 10 tips to consider to help you along your way.
Perhaps the most important factor that you need to consider when looking for a forex broker is their regulatory status. Not only do you need to ensure that they hold the required regulatory licenses, but also that they are authorized to offer their forex services to your country of residence.
On the other hand, depositing funds with a broker that does not hold any regulatory licenses should be avoided at all costs. You have to ask yourself why they are operating in a financial arena without the correct legal status. In most cases, regardless of how your trades perform, such a relationship won’t end well.
If you want to utilize leverage within your trading strategies, then take some time to understand what the broker offers. Although they might state that leverage is freely available, this might be on the proviso that you are an institutional investor. Leverage levels can also be capped based on where you are located.
If leverage is something that you want to use, you’ll also need to check what the overnight financing costs amount to. As you are essentially borrowing the money from the broker to trade more than you have in your account, this of course comes at a cost.
Understanding the fee structure of a forex broker is of utmost importance. While some brokers are very upfront as to what they charge, others are more opaque. Take the time to explore what the broker charges in terms of trading fees, commission and overnight costings.
Furthermore, some brokers claim to offer zero-commission fees. However, what they often do instead is to include their commissions within the spread. As such, although commission fees are zero per-say, you might be paying for this indirectly in the form of an unfavorable spread.
- Copy and social trading
If you are an absolute beginner in the forex trading space, then it might be worth considering a broker that offers copy and/or social trading features. Not only will this expand your knowledge of forex trading, but it will also allow you to copy the trades of top-performing traders.
One thing that you need to look out for is how the results of traders are evaluated. For example, let’s say that the broker displays a trader that made 50% gains in the previous month. This might look good, however if they lost 40% in each of the three months prior, then it is misleading. All copy and social forex brokers should be transparent with how they gauge their trading statistics.
- Payment methods
Before you register an account, check what payment methods the broker supports. You don’t want to go through the client onboarding process, only to find that you desired payment method isn’t accepted.
In the vast majority of cases, brokers will accept either a debit/credit card (such as Visa or MasterCard) and a traditional bank wire. Others will also delve into more modern payment methods such as PayPal. Don’t forget, each payment method might have different transaction fees attached to it, so also check this too.
Although the broker might hold the required regulatory licenses, you should still perform some due diligence on their overall reputation. If the general consensus from the online community is that the broker is reliable and credible, then this should act as notable sign of approval.
To further support your due diligence checks, find out when the forex broker was established, and whether they are owned by a separate parent company.
- Educational and information
If you are a novice forex trader, then it is worth choosing a broker that offers a full range of educational tools. This might include webinars, videos and guides that contain all of the required information to begin your forex trading journey.
On top of this, you should also check whether or not the broker publishes frequent fundamental and technical analysis developments. Experienced traders rely on these information sources when they attempt to determine which way a particular currency will go in the open marketplace.
The spread between the buy and sell price can have a significant impact on your ability to make profit, especially if you are looking to scalp micro-gains. Spreads will usually differ depending on the underlying pairing, so check what’s on offer prior to opening an account.
In an ideal world, you want to choose a broker that offer super low pips, especially in the major pairings. You should expect higher spreads with minor and exotic pairings, however make sure these are not too unreasonable. Furthermore, just because a broker offers low spreads, this doesn’t mean that their overall fees are good value. They might instead charge high commission fees to profit off of your trades.
- Account security
Always explore what security safeguards the broker has installed to keep your funds secure. From the perspective of the trader, this should cover two-factor authentication (2FA) and key-account notifications at an absolute minimum.
On top of this, it is also a minimum requirement that your chosen forex broker has installed SSL (Secure Sockets Layer) safeguards into their platform. In layman terms, this ensures that all of the personal information that you enter in to the broker's website remains private, by encrypting the data.
- Number of Forex pairings
Finally, you should also ascertain how many forex pairings the broker lists. Although the vast majority of the forex industry is dominated by major pairings such as the GBP/USD or USD/JPY, some traders like to explore other markets.
As such, not only should major pairings be readily available to trade, but also minor and exotic currencies too.
List of Forex brokers
Recommended Forex Brokers
Here is a list of recommended forex brokers for 2019. We have tested these brands and can confirm that they offer a great platform for trading all currency pairs, have reasonable spreads and are regulated by financial authorities.
Untested forex brokers
We have not tested these brokers yet and therefore cannot recommend them. We will be reviewing all of these sites in detail in the coming weeks so be sure to bookmark this page.
How we rated these Forex brokers
When we go through the process of reviewing forex brokers, we look at a full range of factors. The reason for this is that we understand each forex trader will have their own individual needs. For example, while some forex traders are more interested in low fees, others look for platforms that have the best reputation.
In doing so, we give you the opportunity to make an informed decision.
In conclusion, the online forex space is facilitated by a huge number of brokers. While listing them all would be beyond the remit of this guide, we have discussed the most notable.
As you have probably now ascertained, you need to consider a full range of factors before joining a new broker. Take some time to understand what is most important for your needs.
In an ideal world, you want to choose a forex broker such as eToro that is heavily regulated, has a full range of currency pairings, offers low fees and spreads, and if possible, has an excellent range of educational tools.
In its most basic form, the vast bulk of ‘real-life’ forex trading is performed by financial institutions of phenomenal size. Known as inter-bank trading, these institutions trade currencies on a direct basis. For lower level trading, such as that found via online forex brokers, the broker will purchase currencies on behalf of its clients. As such, this is why you must pay brokerage fees. The vast majority of the forex brokers we have recommended within our comprehensive guide also allow you to buy stocks. This will either be in the traditional sense (where you actually own the equity), or via a CFD (Contract-for-Difference). You can. Purchasing stocks online is super easy, and much more efficient in comparison to the days where you would need to make a purchase via the telephone. Each stockbroker will have their own fee structure and thus, you should also check this before making a purchase. In most cases, this will be in the form of commission, and is usually charged when you both buy and sell the asset. In order to trade stocks without a broker, you would need to be recognized as an institutional investor. This would require a significant amount of financial clout, not least because you would be dealing directly with the stock exchange that lists the stock. This is why the services of a broker are crucial for every day investors. Forex brokers usually offer a full range of tradable pairings, which is usually determined by majors, minors and exotics. Majors are strong currency pairings that always contain the USD on one side. Minors are also strong currency pairings, but they don’t need to contain the USD. Exotic currencies contain emerging currencies from weaker economies. If you believe the currency listed on the left-hand side of pairing will rise in value, then you’ll want to ‘buy’ the pairing. Alternatively, if you think the currency of the right-hand side of the pairing will rise in value, then you’ll need to ‘sell’ it. The position size is the amount of money you want to risk per ‘point’. For example, if you risk $10 per point, and the pairing rises in your favor by 20 points, then you would make a profit of $200. Forex stands for ‘Foreign Exchange’. It is also commonly referred to as ‘FX’. This is entirely dependant on how you set up your trade. Keeping position sizes low and free from liquidity will reduce your exposure, as will installing sensible stop-losses. On the other hand, utilizing high levels of liquidity and failing to install stop-losses is an ultra-high risk strategy. The amount of leverage available is dependant on the broker that you use, and the type of investor status you hold. Institutional investors will be afforded much higher liquidity levels than retail/individual investors. Each broker will have their own minimum deposit amounts, as well as the minimum position size you can implement per trade. Some brokers allow you trade really small amounts, which is perfect for newbies. Always check this before you register an account. Contents
In its most basic form, the vast bulk of ‘real-life’ forex trading is performed by financial institutions of phenomenal size. Known as inter-bank trading, these institutions trade currencies on a direct basis.
For lower level trading, such as that found via online forex brokers, the broker will purchase currencies on behalf of its clients. As such, this is why you must pay brokerage fees.
The vast majority of the forex brokers we have recommended within our comprehensive guide also allow you to buy stocks. This will either be in the traditional sense (where you actually own the equity), or via a CFD (Contract-for-Difference).
You can. Purchasing stocks online is super easy, and much more efficient in comparison to the days where you would need to make a purchase via the telephone.
Each stockbroker will have their own fee structure and thus, you should also check this before making a purchase. In most cases, this will be in the form of commission, and is usually charged when you both buy and sell the asset.
In order to trade stocks without a broker, you would need to be recognized as an institutional investor. This would require a significant amount of financial clout, not least because you would be dealing directly with the stock exchange that lists the stock. This is why the services of a broker are crucial for every day investors.
Forex brokers usually offer a full range of tradable pairings, which is usually determined by majors, minors and exotics. Majors are strong currency pairings that always contain the USD on one side. Minors are also strong currency pairings, but they don’t need to contain the USD. Exotic currencies contain emerging currencies from weaker economies.
If you believe the currency listed on the left-hand side of pairing will rise in value, then you’ll want to ‘buy’ the pairing. Alternatively, if you think the currency of the right-hand side of the pairing will rise in value, then you’ll need to ‘sell’ it.
The position size is the amount of money you want to risk per ‘point’. For example, if you risk $10 per point, and the pairing rises in your favor by 20 points, then you would make a profit of $200.
Forex stands for ‘Foreign Exchange’. It is also commonly referred to as ‘FX’.
This is entirely dependant on how you set up your trade. Keeping position sizes low and free from liquidity will reduce your exposure, as will installing sensible stop-losses.
On the other hand, utilizing high levels of liquidity and failing to install stop-losses is an ultra-high risk strategy.
The amount of leverage available is dependant on the broker that you use, and the type of investor status you hold. Institutional investors will be afforded much higher liquidity levels than retail/individual investors.
Each broker will have their own minimum deposit amounts, as well as the minimum position size you can implement per trade. Some brokers allow you trade really small amounts, which is perfect for newbies. Always check this before you register an account.