US-based traders looking for a US Forex broker should always make sure that their broker is a member of the National Futures Association (NFA).
This is a legal requirement for US Forex brokers and helps to provide an additional layer of security against potential fraud. I have intensively researched the tight field of US NFA regulated brokers offering Forex trading to identify the best NFA Forex brokers listed below.
- Plus500, multi-asset and CFD broker.
- Forex.com, Excellent trading conditions + NFA regulation.
- OANDA, Solid services + excellent currency converter.
- IG, No withdrawal fee.
- Interactive Brokers, The biggest online trading platform in the USA.
Best NFA Forex Brokers Comparison
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Regulators | ASIC, CySEC, FCA, FMA, FSCA, MAS | ASIC, CFTC, CIMA, CySEC, FCA, FSA, IIROC, NFA | ASIC, BVIFSC, CFTC, FCA, FSA, IIROC, MAS, MFSA | FCA | N/A |
Year Established | 2008 | 2001 | 1996 | 1974 | 1978 |
Execution Type(s) | Market Maker | Market Maker | ECN/STP, Matched Principal Broker | Market Maker | ECN/STP, No Dealing Desk |
Minimum Deposit | |||||
Average Trading Cost EUR/USD | 1.3 pips | 1.1 pips | 0.9 pips | 0.9 pips | 0.2 pips ($2.00) |
Average Trading Cost GBP/USD | 1.7 pips | 1.3 pips | 1.3 pips | 1.4 pip | 0.4 pips ($4.00) |
Average Trading Cost Gold | - | $0.63 | $0.30 | $0.30 | $0.17 |
Trading Platform(s) | Proprietary platform, Web-based | MetaTrader 4, MetaTrader 5, Proprietary platform, Trading View | MetaTrader 4, MetaTrader 5, Proprietary platform, Trading View | MetaTrader 4, Proprietary platform | Proprietary platform |
Islamic Account | |||||
Negative Balance Protection | |||||
Get Started Visit Website82% of retail CFD accounts lose money | Visit Website | Visit Website | Visit Website | Visit Website |
Plus500
In Summary multi-asset and CFD brokerPlus500 offers futures traders its user-friendly, web-based proprietary futures platform and mobile app. Traders get an asset selection of highly liquid futures contracts featuring mini and micro futures, covering 13 Forex pairs, 2 cryptocurrencies, 23 commodities, 10 indices, and 2 interest rates contracts. Plus500 Futures has minimum commissions between $0.49 and $0.89 per side per futures contract. It makes Plus500 one of the best NFA-regulated futures brokers on my listing.
The minimum deposit requirement of $100 ensures accessibility to all US-resident futures traders, who can deposit via bank wires or credit/debit cards.
Pros & Cons
- Broad asset selection in equities and options
- Free and unlimited demo account
- Advanced free-of-charge analytical trading tools
- Global and regulated fintech platform
- Sub-standard trading platform without support for automated or social trading
Forex.com
In Summary Excellent trading conditions + NFA regulationForex.com offers Forex futures traders the StoneX Futures Standard desktop trading platform and user-friendly mobile app. It shines with its super order execution statistics featuring a successful trade execution ratio of 100.00%, with 99.20% of trades executed in less than one second. The price improvement technology delivers an average price improvement of 0.71 pips or $7.10 per 1.0 standard lot. It makes Forex.com one of the best NFA-regulated Forex brokers on my list.
Futures traders get 27 Forex futures contracts, including mini futures. It also offers diversification via futures trading in agriculture, cryptocurrencies, biofuels, indices, interest rates, and metals.
Pros & Cons
- Lower minimum deposit
- Islamic account available
- Good reputation
- Choice of account types
- Withdrawal fee
OANDA
In Summary Solid services + excellent currency converterI rate Oanda among the best NFA-regulated Forex brokers as it upgrades the MT4 trading platform with 28 plugins. Oanda also developed its in-house web-based trading platform and mobile app. Social traders can connect their Oanda account to TradingView to share ideas and discuss trades with 50M+ peers. Through the Oanda Technical Analysis service, beginners receive actionable trading signals, and quality education is also available.
High-volume traders can lower trading fees via the five-tier Elite Trader program, paying between 10% and 34% rebates. The lowest tier requires a reasonable monthly trading volume of $10,000,000 or approximately 100 standard lots.
Pros & Cons
- Excellent 28-tool MT4 upgrade package and outstanding trading tools
- Trustworthy broker with more than 25 years of experience
- Competitive pricing environment
- Quality market commentary on the OANDA blog MarketPulse
Does the CFTC Maintain a Forex Brokers list?
The CFTC, founded in 1974, is a trusted US regulator with oversight of the US derivatives markets. They include futures trading, swaps, and select options contracts. All US-based derivative brokers must register with the CFTC. While there is no CFTC Forex brokers list, the CFTC maintains a RED (Registration Deficient) list. It gives an overview of foreign entities operating without CFTC registration but offering products and services the CFTC believes require one.
Traders should avoid Forex brokers on the CFTC RED list. It increases the risks of fraud or scams. Inclusion on the RED list does not mean the entity violated any provision of the Commodity Exchange Act. The CFTC notes Forex as a sector with increased fraud complaints, together with cryptocurrencies, commodities, metals, and binary options.
Before opening a trading account with a broker, it is best to double-check if the broker operates with all the necessary registrations and licenses. The CFTC RED list offers one tool to avoid potentially fraudulent trading environments, but the CFTC also has a link to the NFA BASIC database. It lists the registration of market participants, their financial information, and the disciplinary or regulatory history.
How the NFA Regulates Brokers
The National Futures Association is not a government regulatory body but a self-regulatory organization (SRO) for derivatives in the US. Despite not being a regulator, membership is mandatory for many market participants and required for all market participants dealing in swaps. Therefore, all US-based Forex brokers should list membership with the NFA on their website. NFA brokers pay membership and assessment fees, which is how the NFA funds operations. It counts more than 4,000 member firms and 55,000 associates, with its headquarters in Chicago, the US hub for commodities and futures trading, with a representative office in New York.
NFA members must adhere to well-communicated standards, and the NFA ensures that US futures markets and the retail Forex market also operate under uniform standards. The aim is ensuring the safety, security, and transparency of the derivatives marketplace across the US for all market participants, from retail to professional.
NFA Forex Regulations
The most important NFA rules impacting Forex traders using NFA brokers are:
- Maximum leverage of 50:1 on Forex, lowered to 30:1 for some less liquid currency pairs (exotics).
- FIFO (first in, first out) rule – if traders have multiple positions open in the same Forex currency pair or cross, the positions can only be closed in the same order as which they were opened.
- Hedging is prohibited.
- Regulated brokers must hold a minimum of $20 million to ensure customer protection.
NFA regulated Forex brokers, in theory, ensure fair market practices to all clients, but that does not guarantee the absence of fraud. It does reduce the likeliness of it, but the biggest ones in history occurred under the watch of the NFA, together with the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC). Despite such occasional shortcomings, US-based traders should always trade with one of the NFA-regulated Forex brokers, as there is significantly more upside in doing so than not.
Pros and Cons of NFA Regulated Brokers
The main advantages of using an NFA regulated broker are:
- Access to a regulatory channel to resolve disputes with your broker without needing to resort to litigation.
- Knowing your broker is highly regulated and well-capitalized, and properly segregating client accounts.
- Knowing that your broker has a reputation to protect.
- They may provide US tax-friendly accounting.
The main disadvantages of using an NFA regulated broker are:
- Cap on Forex leverage at 50:1, although this should be more than enough leverage for anyone’s needs.
- FIFO rule, but this can be avoided by slightly varying the position sizes.
- Lack of access to CFDs and certain other assets, although CFD are not efficient vehicles for US persons anyway.
NFA Broker Check
Traders can locate the existence of NFA membership on the bottom of the homepage of a broker and then conduct an NFA broker check. The NFA allows visitors to check the status of all members via its search tool BASIC. Entering the name of a firm or individual in question will return any available information from the NFA database. It also includes regulatory action from the NFA and CFTC with complete details. The NFA also provides the monthly updates Futures Commission Merchant (FCM) financial data reports, offering information about the required net capital and the adjusted net capital of member firms. The “File a Complaint” button allows traders to report malpractice or fraudulent activity to the NFA, which it then must investigate.
Retail Forex traders in the US have a limited choice of brokers, and it is illegal under US law for non-NFA regulated brokers outside the US (where the trading environment is more competitive) to open accounts for US persons. Note that it is not illegal to be the person opening the account in this case.
Trading with NFA Forex brokers will limit the risk of fraud and notably increase the security of their deposits. Therefore, all US traders should conduct an NFA broker check using BASIC before opening a trading account.
Final Thoughts
US persons – especially US residents – wishing to trade Forex, face a choice between using an NFA regulated broker, or using an offshore broker outside the US which is not regulated. It is not illegal to use an offshore broker, but very few Forex brokers outside the US will now accept a US person as a client for fear of getting into trouble with US authorities, so traders wishing to go offshore are likely to find they have limited choice and may find problematic issues even with brokers where they are able to open an account. For these reasons, and as US regulations are not as restrictive as they are often claimed to be, it will usually make sense for a US Forex trader to open an account with an NFA regulated broker.
