Finding a good Forex broker in the US should not be too difficult, right?
With Forex being the most active financial market and the US economy the largest in the world, there should be plenty of choices when you are looking for brokers for Forex in the USA. Well, things get a little complicated here. Due to factors like trading costs and regulation, choosing the right FX broker is not as straightforward as you might think. Find out below what to look out for when picking the right brokers for Forex in the USA.
- Plus500, multi-asset and CFD broker.
- Forex.com, Excellent trading conditions + NFA regulation.
- Trading.com, A simplistic trading environment ideal for beginners.
- OANDA, Solid services + excellent currency converter.
- IG, No withdrawal fee.
- Interactive Brokers, suits demanding traders and algorithmic strategies.
Compare the Best Regulated Forex Brokers that Accept US Clients
Plus500
In Summary multi-asset and CFD brokerPlus500 Futures ranks among my best brokers in the USA listing due to its user-friendly, web-based trading platform and its choice of futures contracts, especially for commodity traders, where it provides broad-based sector coverage for soft and hard commodities. Another benefit for futures traders at Plus500 is trading fees consisting of tight spreads and a commission of $0.49 per micro contract and $0.89 per standard contract. A $10 auto-liquidation fee also exists if Plus500 must liquidate a contract.
Cunningham Commodities LLC, a wholly owned Plus500 subsidiary and National Futures Association member provides futures trading at Plus500 to US-resident traders.
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 regulationIf you are looking for the best US Forex broker, a true global market leader like Forex.com should be on your list. As a US trader, you can be comfortable knowing that Forex.com meets all necessary regulations that are required of Forex brokers accepting US clients. Forex.com is owned by StoneX Group, a publicly traded company on the NASDAQ exchange, meaning it must meet the highest standards of corporate governance, financial reporting, and disclosure. Forex.com offers its own Advanced Trading Platform with sophisticated features and integrated trading tools designed for serious traders. Forex.com is best for regulatory compliance, trading platforms, and trading software that provides ultrafast execution speed and transparency of performance.
Pros & Cons
- Lower minimum deposit
- Islamic account available
- Good reputation
- Choice of account types
- Withdrawal fee
Trading.com
In Summary A simplistic trading environment ideal for beginnersI rank Trading.com among the best US Forex brokers due to its Forex-only trading environment, a minimum deposit requirement of $50, and maximum leverage of 1:50. Forex traders get 69 currency pairs in a commission-free pricing environment with minimum spreads from 0.9 pips or $9.00 per 1.0 standard round lot and average Forex fees from 1.2 pips or $12.00. Trading.com offers algorithmic traders the MT5 platform, while manual traders may prefer the web-based platform.
Beginners can benefit from quality education and research, a $100 no-deposit bonus, and monthly demo trading competitions with real cash rewards of $1,000, $3,000, and $6,000.
Pros & Cons
- $100 promotional credit & monthly Forex Paper Trading Competition (US)
- One account type with a $50 minimum deposit
- Reasonable commission-free forex fees
- MT5 trading platform for algorithmic trading
- Customer support is available 24/5, not 24/7
OANDA
In Summary Solid services + excellent currency converterOanda brings the trusted MT4 trading platform to the US, which fully supports algorithmic trading solutions and has embedded copy trading services. Oanda upgrades MT4 via its 28-plugin MT4 Premium Upgrade and Autochartist. It also connects social traders to the active TradingView community, where 50M+ traders share ideas and discuss trades, while API trading caters to demanding algorithmic traders. Manual traders can opt for the user-friendly web based Oanda Trade platform. Forex traders get a selection of 70+ currency pairs. Active traders can lower trading fees via a rebate program by up to 34%.
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
IG
In Summary No withdrawal feeIG is a global giant in the world of retail brokers. To give you an idea of IG’s scope, here are some quick facts: IG serves over 239,000 clients worldwide, has access to over 17,000 markets, and has been in operation since 1974 (over 45 years). In a world where US Forex brokers come and go every year, maintaining a consistent presence decade after decade demonstrates a deep commitment to the industry. As a US trader, IG offers you their own award-winning web-based platform and mobile trading apps for iOS and Android devices. IG is also considered one of the best US Forex brokers for beginners because it has a comprehensive online trading academy with on-demand videos and live webinars to give you the knowledge you need to succeed.
Pros & Cons
- Broad asset selection for Forex traders
- Quality choice of trading platforms, including MT4
- Autochartist signals integrated with the proprietary web-based platform
- Limited deposit and withdrawal methods
- Higher minimum deposit requirement, but within a reasonable demand
Interactive Brokers
In Summary suits demanding traders and algorithmic strategiesIn Summary - An industry-leading option for demanding clients & algorithmic traders
Interactive Brokers ranks among the best-capitalized non-bank brokers for US-based traders and investors, offering an industry-leading asset selection covering 135 markets across 33 countries in 23 currencies. Its product and services portfolio caters to all requirements, from individual accounts to retirement planning and asset management to algorithmic portfolios. Trading fees at Interactive Brokers rank among the lowest industry wide. Interactive Brokers deploys cutting-edge trading platforms, and its flagship IB Trader Workstation supports algorithmic trading. Interactive Advisors is the Interactive Brokers Robo portfolio unit, granting traders access to portfolios from just $100. The Investors Marketplace lists 2,000+ services across five categories, and Probability Lab supports options traders.
Pros & Cons
- Many Different Features
- Many Educational Services
- Overwhelming Amount of Information
- No Mention of Bonuses or Promotions
How to Choose a Forex Broker as a US Trader
Here is a checklist you can employ for yourself, to use when evaluating the best Forex brokers for US traders.
1. Trading Costs: Spreads, Commissions, & Leverage
Spreads and commissions (if charged) can make a substantial difference to your overall cost of trading, as these are going to be the biggest cost you face by far, unless you make very few trades and hold for the long term. It is important to be sure that you really know what spreads and commissions are going to really be – do not rely upon what you see in a broker’s demo account.
Leverage – the amount that a broker will let you borrow to trade – is another critical issue. It is important to check the maximums allowed asset by asset.
2. Account Types
Some Forex brokers in the USA will offer their clients a choice of different types of accounts.
Some general rules about which account type is going to be most suitable for you:
- A Micro Account accommodates deposits lower than $500.
- A Mini Account accommodates deposits lower than $10,000 and will be the more suitable vehicle for most retail Forex traders with more than $500 to deposit.
- A Standard Account is most suitable for more experienced traders with more than $10,000 to deposit.
3. Minimum Deposit
Minimum deposits required by the top Forex brokers in the USA tend to be low and affordable for most Americans, at ranges between approximately $100 and $250.
4. Trading Apps
Every Forex broker in the US will offer their own dedicated trading app and they are mostly reaching extremely high standards.
5. Customer Service
Person-to-person customer service is something that you will probably never need, but you do want to know that if you need it, it is there and of a high standard.
All Forex brokers for US citizens today have automated FAQ searches which should troubleshoot a solid majority of any operational difficulties you might encounter.
Is Forex Legal in the US?
Yes. As a US trader, it is legal for you to trade Forex. US regulators exist to make sure Forex brokers accepting US clients are properly monitored to act ethically and lawfully.
Understanding the US Forex Market
With the popularity of Forex trading, the competition among US-based Forex brokers intensified. I have created an in-depth analysis of all regulated Forex brokers in the USA and narrowed down the list to our top US Forex brokers, so you can choose the best broker for you.
The US dollar is the world’s largest currency and is considered the world’s reserve currency. Oil, gold, and most other commodities are priced in US Dollars. The term “major pairs” are Forex pairs containing the USD, for example, EUR/USD, USD/JPY, GBP/USD, etc. That said, US Forex brokers usually offer Forex pairs that do not contain the US Dollar, for example, EUR/JPY, CAD/JPY, GBP/NZD, etc. Forex pairs not containing the US Dollar are known as “crosses.”
US Forex Market Regulation
If you are being offered services from a US Forex broker, they must be regulated by the Commodity Futures and Trading Commission (CFTC) and be a member of the National Futures Association (NFA). The NFA offers an online verification system called Background Affiliation Status Information Center (BASIC), where Forex brokerage firms can be verified for having the necessary regulatory compliance and approval.
What is the US Market Regulation?
If you are being offered services from a US Forex broker, they must be regulated by the Commodity Futures and Trading Commission (CFTC) and be a member of the National Futures Association (NFA). The NFA offers an online verification system called Background Affiliation Status Information Center (BASIC), where Forex brokerage firms can be verified for having the necessary regulatory compliance and approval.
How a Regulated Market Benefits You
Forex regulation in the US benefits you in two ways. Firstly, it ensures that regulated US Forex brokers are well run and capitalized, which helps lower the probability that your broker will collapse and leave you waiting to get your deposit returned while you wait for bankruptcy proceedings to be concluded. Secondly, it ensures that your broker cannot unfairly take advantage of you and must offer you a fair market, and the trading conditions which their advertising promises.
How to Verify Your Broker is Regulated
Regulated Forex brokers always publish the information verifying by whom they are regulated and usually also the details of their license. It is usually published at the bottom of the home page of their website, and sometimes at the bottom of every page within the website. Typically, regulated Forex brokers also have a dedicated web page giving full in-depth details of their regulatory arrangement.
Dodd-Frank Act
The Dodd-Frank Act, a set of US regulations passed in 2008 in response to the financial crisis, had a huge impact on US Forex brokers. Many feel that the stringent regulations resulted in US Forex brokers moving operations offshore or closing their doors completely. Those US Forex brokers that remain now face some of the most stringent capital requirements required by Forex brokers anywhere in the world plus hefty licensing costs.
It is worth noting that the Securities Exchange Commission (SEC) does not have authority over the Forex market because it does not consider currency pairs securities.
US Forex Brokers - Pros & Cons
The Pros are:
- Strong regulation
- Forex brokers for US citizens have worked very hard to meet all the regulatory requirements.
- Well-capitalized
- Excellent compliance
- No regional or state-level differences.
The Cons are:
- Stringent requirements have made it difficult and costly for Forex brokers to accept US clients.
- Limited choice of Forex brokers accepting US clients.
Forex Trading Times in the US
The US Forex market for retail traders concentrates around the eastern time zone. Although there is no hard line that defines when the Forex market opens for US traders as it runs 24 hours a day, five days a week, it is widely agreed that the US opening time for Forex is at 8 a.m. Eastern Time. The first couple of hours of the US open is typically the most liquid during any 24-hour Forex period because London and other European centers are still operating at that time.
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