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.
Ready to start trading forex? Learn more about which forex brokers are best for beginners.
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.
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.
Benzinga has reviewed the field of available online forex brokers to come up with a short list of the best forex brokers for beginners. Take your pick, open a funded account and you’re ready to trade currencies.
Best for Zero Commissions and Low Spreads: CedarFX
Excellent for beginners, CedarFX offers 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.
Best for Copy Trading: eToro
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.
Best for U.S. Traders: FOREX.com
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 $50 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.
Best for CFD Trading: IG Markets
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 client’s 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).
Best for Active Multi Asset Traders: Interactive Brokers (IBKR)
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.
Interactive offers world-class brokerage services in 33 countries, covers 134 markets worldwide and lets you trade 23 different currencies and their pairs. But you need a hefty $10,000 minimum margin deposit to start trading with this broker that also charges inactivity fees.
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.
Best for Low Minimum Deposit: Oanda
Oanda was established in 2001 and accepts US clients since it submits to strict oversight by the CFTC and NFA. As 1 of the world’s largest forex brokers, Oanda has international offices situated in London, Tokyo, Toronto, Singapore and Sydney. You can access its website in 8 different languages.
You can use Oanda to trade over 70 currency pairs, plus CFDs on metals, indices, commodities, energy products, and U.S., U.K. and German government bonds. Oanda provides maximum leverage ratios of 50:1 to U.S. clients, 100:1 to Australian and New Zealand clients and 30:1 to EU clients.
The award-winning broker will definitely suit those just starting out with little risk capital since it notably requires no minimum deposit to open a live trading account. Oanda operates as an electronic communications network (ECN) and straight-through processing (STP) broker, which allows it to offer unusually fast execution and tight dealing spreads.
Trading platforms supported by Oanda include MT4 and its proprietary desktop, mobile and web-based Oanda Trade platforms that feature TradingView charts. Oanda also provides an API for automated trading.
Trade Forex Today
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.
Frequently Asked Questions
Q: Can I trade forex with $10?
A: Yes, some online forex brokers will accept clients with a very low minimum deposit like $10 or even less.
Q: What is a PIP?
A: 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.
Q: Can I trade forex without a broker?
A: 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.
Get a Forex Pro on Your Side
FOREX.com, registered with the Commodity Futures Trading Commission (CFTC), lets you trade a wide range of forex markets plus spot metals with low pricing and fast, quality execution on every trade.
You can also tap into:
- EUR/USD as low as 0.2 with fixed $5 commissions per 100,000
- Powerful, purpose-built currency trading platforms
- Monthly cash rebates of up to $9 per million dollars traded with FOREX.com’s Active Trader Program
Learn more about FOREX.com’s low pricing and how you can get started trading with FOREX.com.
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