Trading forex, which involves exchanging one currency for another on the foreign exchange market, involves a level of risk and complexity that you might not find in traditional investing. That's why it's especially important to choose a broker that helps you understand and navigate the potential costs and benefits associated with forex.
When selecting your forex broker, you should consider trading platforms and tools, the number of currency pairs offered, customer service and, of course, trading costs.
But comparing costs is tricky in forex trading. Some brokers charge a commission, while others are compensated with a spread, or a markup between the price they pay for an asset and what they sell it for.
That’s just one reason why the search for the best forex broker is complex. Another is that there are a variety of brokers, many of them unregulated or regulated in countries outside of the U.S. For our list of best currency trading brokers, we considered only those that are regulated by the National Futures Association and the Commodity Futures Trading Commission.
Among the riskier elements of forex trading is the rapid pace at which transactions are carried out. Forex trades also often use high leverage, which means investors can quickly lose more than their initial investments.
Of course, leverage means you can also profit at the same speed, which — combined with liquidity — is what attracts investors to currency trading.
One suggestion: All of these brokers offer free demo accounts so you can test the market with virtual dollars. Dip a toe in with some play money before using your own cash.
Here are NerdWallet's top brokers for forex trading.
3 best brokers for forex trading
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Learn More on Interactive Brokers' website 4.9 | Commission: 0.20 basis points if trading at or below 1,000,0000,000 in value per month. $2 minimum commission per order. Volume discounts available. Currency pairs: 100+ Account minimum: $0 Inactivity fee: None. |
| Commission: Choice of spread markup or commission account. Commissions are $5 per 100,000 traded per side. Currency pairs: 80+ Account minimum: $100 Inactivity fee: $15 per month after there is no trading activity for 12 months. |
| Commission:Spread markup. Elite trader program offers commissions and rebates for those who trade $10,000,000 per month. Currency pairs: 60+ Account minimum: $0 Inactivity fee: 10 units of the currency your account is denominated in if there are no open trades for a period of at least 12 months. |
How do we review brokers?
NerdWallet’s comprehensive review process evaluates and ranks the largest U.S. brokers by assets under management, along with emerging industry players. Our aim is to provide an independent assessment of providers to help arm you with information to make sound, informed judgments on which ones will best meet your needs. We adhere to strict guidelines for editorial integrity.
We collect data directly from providers through detailed questionnaires, and conduct first-hand testing and observation through provider demonstrations. The questionnaire answers, combined with demonstrations, interviews of personnel at the providers and our specialists’ hands-on research, fuel our proprietary assessment process that scores each provider’s performance across more than 20 factors. The final output produces star ratings from poor (one star) to excellent (five stars).
For more details about the categories considered when rating brokers and our process, read our full methodology.
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| Interactive Brokers IBKR Lite | J.P. Morgan Self-Directed Investing |
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Fees $0 per online equity trade | | |
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Promotion None no promotion available at this time | Promotion None no promotion available at this time | Promotion Get up to $700 when you open and fund a J.P. Morgan Self-Directed Investing account with qualifying new money. |
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Frequently asked questions
Which forex broker is the best choice for beginners?
Forex trading in general isn't where we'd suggest beginner investors get started — if you're brand new to investing, check out our list of the best brokers for beginners. That said, if you're a seasoned investor looking to dabble in trading forex for the first time, you might benefit from going with a more traditional broker to start, like Interactive Brokers.
How can I learn how to trade forex?
Many forex brokers offer paper trading tools that let you test different strategies without putting any money at stake. Virtual trading simulators like those are a good way to learn how to trade and understand the different strategies you might employ.
Which forex brokers offer the most leverage?
Many forex brokers will offer leverage of up to 50:1 on major currency pairs. Some brokers will reduce that for minor currency pairs, offering as little as 20:1 instead.
FAQs
This forex trading style is ideal for people who dislike looking at their charts frequently and who can only trade in their free time. The very lowest you can open an account with is $500 if you wish to initiate a trade with a risk of 50 pips since you can risk $5 per trade, which is 1% of $500.
What is the best broker to use for forex? ›
- Best Forex Brokers.
- CMC Markets: Best Overall and Best for Range of Offerings.
- London Capital Group (LCG): Best for Beginners.
- Saxo Capital Markets: Best for Advanced Traders.
- XTB Online Trading: Best for Low Costs.
- IG: Best for U.S. Traders.
- Pepperstone: Best for Trading Experience.
- Frequently Asked Questions.
Top 10 Most Successful FOREX Traders in the World
- George Soros. George Soros, often referred to as the «Man Who Broke the Bank of England», is an iconic figure in the world of forex trading. ...
- Paul Tudor Jones. ...
- Bill Lipschutz. ...
- Stanley Druckenmiller. ...
- Michael Marcus.
You cannot achieve wealth through forex trading solely with your capital; you need the support of investors' funds. That's why forex billionaires like George Soros, Paul Tudor Jones, and Bruce Kovner all have hedge fund companies.
Can you make money with $1000 in forex? ›
Believe it or not, you can start forex day trading with $1,000 or even less. It requires mastering position sizing and managing risks, but if you navigate your way to success, the rewards can be significant. In this article, we will discuss in detail how you can day trade with $1000.
Do you need $25,000 to day trade forex? ›
This rule, set by FINRA, states that any trader who executes four or more day trades within a five-day period is considered a pattern day trader (PDT) and must maintain a minimum equity of $25,000 in their margin account at all times.
Which is the safest forex broker? ›
A safe broker will be regulated by a reputable financial authority, have a good track record, offer competitive trading conditions, and have a strong customer support team. Some of the safest forex brokers in the world include Pepperstone, IC Markets, FXCM, OANDA, FBS, XM, eToro, AvaTrade, IG, Saxo Bank, and FXTM.
Which broker do most traders use? ›
Breaking Down the Best Stock Brokers
| Stock Broker | Overall | Commissions & Fees |
|---|
| Fidelity | 99 | 100 |
| E*TRADE | 97 | 90 |
| Charles Schwab | 97 | 90 |
| Merrill Edge | 94 | 90 |
13 more rowsJan 23, 2024
A professional Forex chart technician uses price charts to analyze and trade the market. By trading with an EDGE in the market, professional traders can put the odds in their favor to successfully trade price movement from point A to point B.
Who is the No 1 forex trader? ›
George Soros is undoubtedly one of the most successful forex traders in the world. His bold and aggressive trading style has earned him a place in history, and his philanthropic efforts have made a positive impact on many lives. However, his controversial reputation may not sit well with some investors.
Ray Dalio is widely recognized as the wealthiest forex trader in the world. With a net worth of billions, Dalio's success in the forex trading industry is a testament to his exceptional skills and strategies. Starting his career in finance, Dalio founded the highly successful hedge fund, Bridgewater Associates.
What is the number one forex strategy? ›
Carry trade strategy
A trader using a carry trade strategy will try to profit from the difference in interest between the two different currencies that make up a currency pair. A trader would go buy a currency with a high-interest rate and sell a currency with a low interest rate.
Can you make a living off forex? ›
The answer to this question ultimately depends on your individual goals, dedication, and skill level. While it is possible to make a living off Forex trading, it requires hard work and continuous learning. It is crucial to have realistic expectations and understand that success does not come overnight.
Can you actually get rich from forex? ›
It also involves a steep learning curve, as traders must understand complex concepts such as technical analysis, fundamental analysis, and risk management. Therefore, while it is possible to get rich from forex, it is by no means an easy or guaranteed path to wealth.
How much can forex traders make a day? ›
On average, a forex trader can make anywhere between $500 to $2,000 per day. However, this figure can vary significantly depending on market conditions, trading strategy, and risk management techniques. Some traders may make more than $2,000 in a single day, while others may make less or even incur losses.
How much money do I need to trade forex? ›
Answer - You can start trading with as little as $10 or invest more, like $100, $1,000, or even $15,000. Higher investments can potentially lead to higher profits in forex. However, it often requires substantial investments to achieve significant gains.
Can you day trade with only $500? ›
With careful planning and execution, it is possible to start day trading with just $500. However, you need to be aware of the risks and be prepared to lose your investment.
What is the best lot size for a $500 forex account? ›
It is better to trade with 0.05 lot if you have $500 account. If you are risking 50 pips per trade with 0.5 lot, you will lose all your capital if there are 10 consecutive losses. On other hand with 0.05 lot you can try for 100 times & you can save your capital.
Can I trade forex with $200? ›
In summary, if you are interested in trading forex with a $200 budget, it's possible, but it's crucial to proceed with caution, make informed decisions, and develop a strong understanding of forex market dynamics.
