Best Forex Brokers: How to Choose a Broker for Forex Trading

Last Updated:
Disclosure: Your support helps keep Commodity.com running! We earn a referral fee for some brokers & services we list on this page. Learn more...

Risk Warning: Your Capital is at Risk.

Foreign exchange currency pairs, also called forex or FX, are moving price-quotes for an exchange rate between two currencies.

Typically, FX pairs are between fiat currency pairs, but cryptocurrency-to-fiat pairs are also becoming popular.

To trade currency pairs, you need a forex broker. A forex broker’s job is to facilitate these trades and make the currency pairs accessible to trade at the current exchange rate.

Many forex brokers also provide educational resources to help you learn about trading.

Fiat currency is money issued by a government as legal tender.

All forex brokers that operate legally are regulated in the jurisdictions they accept traders from. Alongside appropriate regulation, there are several important factors to keep in mind when choosing a forex broker.

Forex Brokers Compared

Loading table...

Important: Foreign exchange and other leveraged trading involves significant risk of loss.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 71.00%-89.00% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

How to Choose the Best Forex Broker

Forex trading is a serious financial undertaking, and choosing a forex broker requires care. These are the factors we urge traders to consider when choosing an online broker to trade currency pairs:

  1. What products do you want to trade?
  2. Who is the broker regulated by?
  3. How is the trading platform?
  4. What fees and payment methods are there?
  5. Can I rely on customer support?
  6. What is the broker’s reputation like?

What Products Do You Want To Trade?

The first factor that will determine your broker is what currency pairs you’re looking for. The common groupings for currency pairs are:

  • Major pairs: All major currency pairs include the US Dollar and other leading world currencies. Some examples are USD/JPY, USD/CAD, and GBP/USD.
  • Minor pairs: Minor currency pairs are other major world currencies, excluding the US Dollar, like AUD/JPY, CAD/EUR, and EUR/JPY.
  • Exotic pairs: Currency pairs made of a major currency and the currency of a developing country, like USD/MXN and EUR/HUF.

Brokers like FXCM also offer forex baskets, where profit and loss are determined by how multiple currencies move against a dominant major currency.

Forex and cryptocurrency pairs are instruments that consist of two currencies, one fiat currency (like USD or CAD) and one cryptocurrency (like Bitcoin or IOTA). Traders may choose these instruments due to a significant difference in volatility between fiat and cryptocurrencies.

Which Agency Regulates the Broker?

Trading always carries risks, but you can mitigate chances of fraud by ensuring your online forex broker of choice is regulated by an established regulatory body.

Regulators function as agents of consumer protection and ensure your funds are secured while in the hands of the broker. They also allow a broker to function in particular countries. If a broker isn’t regulated in your area, you can’t trade with them by law.

Some of the largest global regulators include:

  • Financial Conduct Authority (FCA)
  • Commodity Futures Trading Commission (CFTC)

Be sure to read our full regulators article.

How Is The Trading Platform?

Trading platforms are similar at first sight — they all offer basic charting tools and trade screens. They usually also include trading insights via news or social media.

When choosing a forex platform, demo accounts are available for testing. This allows you to see what features are offered, how they work, and how they differ from platform-to-platform.

What Fees and Payment Methods Are There?

Forex brokers make their money in different ways. Some charge commissions per-trade, although this is rare. Most of them make money on spreads, also known as “pips.”

The payment methods for deposits and withdrawals also vary from broker to broker, and this will determine whether you can freely move funds. Most forex brokers accept credit and debit cards, e-wallets like PayPal, and wire transfers.

Can I Rely On Customer Support?

Customer support teams have set times of availability — most online brokers offer support 24 hours-a-day, five days a week.

The most important factors to consider with customer support are:

  • Methods of support: are they available via live chat, phone, e-mail, or all three?
  • Supported platforms: do they offer mobile support or only desktop?
  • Knowledgebase: is there any material I find without having to contact support?

What Is The Broker’s Reputation Like?

There is a wealth of information online about brokers. Traders can find expert reviews and professional reviews alike.

When reading online broker reviews, focus on the facts rather than the writer’s opinions. Ensure you have a good idea of the quality of service out there, and so what you can expect as a customer of a regulated broker.

What Makes a Good Forex Trading Platform?

When trading forex, traders may have preferences for specific features. However, there are some features that will benefit any forex trader. We selected five standout features from five top brokers.

Information On Your Instrument by AvaTrade

Avatrade's forex dashboard
This screenshot is only an illustration. Current market prices can be found on the broker website.

AvaTrade has an information box feature that opens as a toggle-able tab.

It shows the market sentiment, buy and sell price, FX unit, lot size, trading hours, and price changes within daily, weekly, or monthly time frames.

This information is accessible with most brokers, but it’s handy to have it easily available while trading.

Related Forex Instruments by Markets.com

Markets.com has a tab where traders can view related forex currency pairs. The tab shows the recommended currency pairs as boxes, with which traders can execute trades in one click.

Considering there are dozens of currency pairs, this feature allows a different overview of what’s on offer.

FX Sub-Categories for Browsing by CityIndex

CityIndex's forex dashboard
This screenshot is only an illustration. Current market prices can be found on the broker website.

This is a very simple feature, but extremely helpful when trying to find a particular FX currency pair to trade. CityIndex has several sub-categories for forex instruments.

Unlike the usual majors, minors, and exotics, CityIndex made categories by continent and by other major pairs like EUR, GBP, CAD, and CHF.

Multiple Trade Windows by Trading 212

Trading 212 has a multi-tab feature with which traders can have multiple currency pair windows open simultaneously.

You can toggle between tabs while the right side of the screen shows essential trading information like:

  • Target spread
  • Margin
  • Long and short position limits
  • Min. trading quantity
  • Price change over time

Traders can also set alerts directly within the trading tab.

Forex Sentiment Alerts by Plus500

Alerts are typically set based on price movement — set price targets or % of change. Plus500 offers an alert feature that allows traders to set forex instrument alerts based on trader sentiment.

For example, if you set a sentiment alert for the concentration of sellers to reach 35%, Plus500 will alert you via e-mail or push notifications.

How to Open a Forex Account

Online forex broker accounts are opened in the same way as any other accounts. Here is a step-by-step on how to get started.

Once you’ve found the ‘Sign Up’ or ‘Open Account’ button, you’ll be asked to:

  1. Fill in some personal information like your name, date of birth, country of residence, e-mail address, and phone number
  2. Create a secure, memorable password for your account
  3. Provide details of your overall financial standing, including your annual salary, amount of savings, and source(s) of income*
  4. Declare any trading experience, including past trade volumes, total amounts, and future intended trading volume*
  5. Declare any experience as a finance professional in a relevant industry
  6. Verify your account with a form of identification, and a proof of address from the past 3 to 6 months (utility bill, mobile bill, or bank statement)

*Important for eligibility to open a professional trading account

Once the above steps are done and your account is approved by the forex broker, you are ready to start trading.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 71.00%-89.00% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

FAQs

Choosing a forex broker can be tiresome without the right information. Here is some additional information to help you get started.

How do I choose a forex broker?

When choosing a forex broker, the main factors to pay attention to are the currency pairs you are interested to trade, whether the broker is regulated in your jurisdiction, fees / commissions, the quality of the trading platform and customer support, and the overall reputation of the broker.

You can see these points covered in further detail here.

How do I know if my forex broker is regulated?

A regulated forex broker will have its regulatory information publicly declared on its website. This is typically presented as the accreditation with the registration number alongside it. Brokers tend to display this information in website footers or “About Us” pages.

How do I calculate forex trading costs?

Forex trading costs are determined by all the fee which the broker charges for your trades. These fees can come in the form of spreads (pips), funding fees, administration fees, and per-trade commissions. Some brokers like Trading 212 operate on a zero-commission model and only make money from margins and spreads.

For a fee breakdown, see our table of forex brokers.

What is the best forex broker for beginners?

There is no one best forex broker for beginners because the best forex broker depends on the individual trader’s preferences. When choosing a forex broker as a beginner, it is important to familiarize yourself with the important considerations of selecting the right broker for you. Once you understand what these points mean and how they impact your trading experience, you are able to make a more informed decision.

What Are Forex CFDs?

A forex contract-for-difference (CFD) is a trading method that allows you to speculate on the rise or fall of a particular currency pair. Forex trading is in-fact a CFD-style trade, where you may bet on a price movement without actually owning the asset you’re betting on.

There are many other kinds of CFDs, like commodities (precious metals, agricultural goods), shares, indices, and cryptocurrencies.

The following brokers offer forex CFDs or similar products to traders in :

Loading table...

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 71.00%-89.00% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

IMPORTANT: CFDs are not available in the USA due to local regulation, and regulated brokers do not accept US citizens or US residents as clients.

Further Reading

Prospective forex traders might be interested our guides to technical analysis indicators, concepts, and strategies including Elliot Waves, Market Thrust, and  Moving Averages.

[[{{Country}} Welcome]]
[[{{Country}} Welcome]]