Thanks to tough regulations, forex leverage maximums are capped and products like CFDs are completely banned in the United States. Many brokers who deal in these markets offer pared-down services to U.S. traders or simply avoid the U.S. altogether. That's why Benzinga offers this Nadex vs Forex.com review.
Thankfully, FOREX.com and the North American Derivative Exchange (Nadex) operate with the needs of American clients in mind. While both focus primarily on U.S. clients, the similarities between the two brokers end there. FOREX.com and Nadex target distinctly different groups of traders and it’s important to identify what type of trader you are before choosing between the two.
FOREX.com vs. Nadex: Overview
FOREX.com vs. Nadex: Platform and Tools
FOREX.com is a market maker forex broker with a wide selection of currency pairs to trade. There’s no shortage of forex news and research available to clients.
Nadex is the first regulated U.S. exchange to offer lawful trading of binary options, touch brackets and call spreads. Nadex isn’t a broker or market maker, but a live exchange that matches buyers and sellers. The strategies used here are complex, but Nadex’s educational materials can bring you up to speed in no time.
What FOREX.com Offers
FOREX.com has a few different ways for account holders to trade currencies. First, there’s the ever-popular MetaTrader 4, a sophisticated forex trading platform in which you can write your own automated trading programs.
All Expert Advisors are supported and FOREX.com even provides a few of its own to clients. Mac users can use the MT4 desktop app without sacrificing functionality and both iOS and Android phone users can use the mobile platform.
FOREX.com also has its own proprietary trading platform called the Advanced Trading Platform. You’ll have more than 80 technical indicators to use on charts with 15 different time periods to backtest. Like MetaTrader, the Advanced Trading Platform is also available in the browser and mobile versions.
What Nadex Offers
Nadex offers two different ways for clients to trade: Nadex Desktop and NadexGO for mobile users. On the desktop version, you’ll be plugged directly into the Nadex exchange with the ability to take the best price at the top of the book or work in order to try to secure a better price. Since binary options are an “either/or” proposition (either a price point is reached at a certain time or it’s not), you’ll easily find a counterparty using the market depth feature.
If you’re a Nadex client, you’ll also have Market Order Protection in your arsenal, which means you’ll get the price you want when your order is filled.
Two mobile options are available at Nadex: NadexGO and the legacy mobile app. NadexGO requires no download and gives traders all the functionality of the desktop platform, including chart tools and technical indicators. The legacy app is still available in the App Store but only spread trading is supported.
Bottom Line
Both FOREX.com and Nadex have tremendous proprietary trading platforms that allow seamless trading from both a desktop and mobile screen. Charting tools are plentiful on both platforms as well, but Forex.com simply has more to offer clients with outside apps like MetaTrader and NinjaTrader.
FOREX.com vs. Nadex: Research Offerings
What FOREX.com Offers
Research is in great supply at Forex.com and can be consumed in a number of different ways. FOREX.com has webinars every Monday at 9 a.m., which feature commentary on markets, trading strategies
FOREX.com also has a five-man research team led by CFA Matthew Weller, a senior analyst at Faraday Research. The team is constantly looking for new insights and ideas on forex markets through the lens of geopolitics, technical analysis
What Nadex Offers
Since Nadex traders have access to more markets than forex, additional analysts are needed, and the company has a boatload. You’ll locate the Market News tab at the top of the Nadex homepage. Here you’ll find news and analysis from over a dozen sources on forex markets, commodities, equities and more.
Nadex also offers webinars that break down market moves every Sunday, Monday and Tuesday, along with occasional shows with special guests. For example, each week you’ll get a show hosted by Gail Mercer, founder of TradersHelpDesk.com.
Bottom Line
Both companies take similar routes with their research offerings, but Nadex has a volume of material that FOREX.com can’t match. Webinars are scheduled more frequently and Nadex commentators outnumber FOREX.com commentators by more than two to one. Nadex offers more markets to cover, but the sheer volume of research is impressive.
FOREX.com vs. Nadex: Commission and Fees
FOREX.com’s Fees
The fees charged by FOREX.com depends on the type of account you’d like to open. As mentioned above, FOREX.com has three different account types.
The commission account comes with reduced currency spreads but a fee of $5 is charged for every 100,000 units moved. The other two accounts are spread only and have direct market access. Direct access means you choose the path and counterparty you want your order to go to on the other side of the trade.
You’ll need $250 to open an account and monthly fees do exist for inactivity, but only after 12 months. Withdrawals done via ACH or debit cards aren’t charged fees but wire transfers do cost $25.
Nadex's Fees
Nadex has a simple fee schedule designed to lower trading costs. Since all securities traded on Nadex are derivatives, a small commission is charged on each one. At Nadex, this charge is $1 per contract, but only up to the first 50 contracts. After you’ve paid for 50 contracts, any additional contract purchases are commission-free.
You’ll need at least $250 to open a Nadex account. There’s no fee for inactivity, account setup or wire transfers, but you will be charged a $1 settlement fee for each option that sells or expires in the money. If the contract lands out of the money, this settlement fee won’t be charged. Also, there’s a $25 charge for returned deposits and wire withdrawals.
Bottom Line
FOREX.com and Nadex both require $250 minimum to open an account. Comparing fees is difficult since the companies operate differently, but trading on Nadex is more expensive. You’ll pay $10 for a 100,000 contract order on Nadex, while FOREX.com’s commission-based account charges $5 for 100,000 forex units.
FOREX.com vs. Nadex: Security
What FOREX.com Offers
FOREX.com has relationships with numerous regulatory bodies, including the Commodities and Futures Trading Commission (CFTC) and the National Futures Association (NFA). Forex.com is a subsidiary of GAIN Capital (GAIN), a publicly-traded firm that publishes liquidity statistics on the website quarterly. Customers' funds are held in affiliate banks away from the firm’s capital.
What Nadex Offers
Nadex also partners with the CFTC, which is important because binary options were an unregulated jungle before the Nadex exchange went online. As a U.S.-regulated exchange, Nadex cannot get involved in trades and must only match buyers and sellers. Nadex only makes money from exchange fees, not market participation. Customer funds are held separately in various U.S. banks such as BMO Harris.
Bottom Line
Both Nadex and Forex.com provide security and completely legal trading. There’s still plenty of risk involved with forex and derivatives trading, so a strong legal framework doesn’t automatically mean easy money.
FOREX.com vs. Nadex: Customer Support
What FOREX.com Offers
FOREX.com customers will have no problem reaching customer service should they run into problems. All three key contact methods are available: online chat, email
If you need a question answered on a Saturday, FOREX.com has plenty of resources, FAQs and educational programs listed right on its website.
What Nadex Offers
Nadex offers some unique and complex products, so quality customer service is a must. Email and phone support options are available at Nadex, but the lack of live chat means getting answers in real-time could be difficult. Nadex also lists its downtown Chicago address in case potential clients want to snail mail something (or maybe just pop in and ask a few questions).
Bottom Line
Nadex loses points for the lack of chat features, but both companies provide ample time for customers to reach out and problem-solve with company representatives. The FAQs, how-to videos and glossaries are all excellent resources for customers in need.
FOREX.com vs. Nadex: Tradable Asset Classes
What FOREX.com Offers
What markets does FOREX.com deal with? You guessed it: forex. Over 80 currency pairs are available on FOREX.com and trading is done through one of three different accounts.
Spread-only and commission accounts are standard
What Nadex Offers
Nadex offers three ways to trade financial products:
- Binary options
- Touch brackets
- Call spreads
These three products are unique and can be used to purchase from a number of different markets. Nadex contracts are written for stock indices, commodities and forex. Options trading of this kind is an advanced strategy, so be sure to comb the educational tools before diving in.
Bottom Line
Nadex and FOREX.com are highly specialized companies that deal with specific markets. Forex.com only offers currency trading (along with a little gold and silver trading), but Nadex contracts can be written about pretty much any type of financial product. However, Nadex only has 10 currency pairs and provides no leverage on forex trading.
FOREX.com vs. Nadex: Ease of Use
What FOREX.com Offers
FOREX.com is one of the easiest currency brokers to learn and use. If you use MetaTrader or NinjaTrader, you won’t even need to learn a new platform. Setting up an account is a quick task and plenty of support is available if you get stuck on something. Once you know the ins and outs of forex trading, there’s nothing you can’t do here.
What Nadex Offers
Nadex’s offerings are a little more sophisticated, so the learning curve is a bit steeper. You can only use Nadex’s proprietary platform to trade and the products do take a little time to understand clearly. There’s a healthy dictionary of support FAQs and customer service has convenient hours.
Bottom Line
Nadex is harder to use because the derivatives are complex and more difficult to digest than regular forex trading. Once you get the hang of strategies, the platform is very user-friendly. FOREX.com keeps things simple for most customers, although the DMA account does require a little know-how.
Final Thoughts
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
The products and services available to you at FOREX.com will depend on your location and on which of its regulated entities holds your account
On the surface, FOREX.com and Nadex couldn’t be more different. One is a forex market maker with a host of third-party applications and the other is a derivatives exchange with its own proprietary trading platform.
Are Forex.com and Nadex the same thing?
Forex.com and Nadex are not the same. One is a forex market maker and the other is a deriviatives exchange.
How many currency pairs does Nadex offer?
Currently, Nadex offers 10 currency pairs.
Is there riks when trading forex and derivatives?
Yes, there is risk involved when trading forex or derivatives.
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 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.
About Dan Schmidt
Dan Schmidt is a finance writer passionate about helping readers understand how assets and markets work. He has over six years of writing experience, focused on stocks. His work has been published by Vanguard, Capital One, PenFed Credit Union, MarketBeat, and Fora Financial. Dan lives in Bucks County, PA with his wife and enjoys summers at Citizens Bank Park cheering on the Phillies.