Trading with the right broker remains essential but finding the best one among thousands on offer can be a tough challenge.
That is why we have done intensive research to compile a must-read list for you below of the best Forex brokers for beginners.
- FP Markets, ECN trading with leverage up to 1:500.
- Eightcap, Competitive pricing + excellent daily videos.
- BlackBull Markets, Best ECN trading environment, with scalping and hedging.
- Pepperstone, Great ECN execution on MT4/5, cTader, TradingView and Pepperstone proprietary platform.
- XM, Exception range of assets + negative balance protection.
Comparison of Forex Brokers for Beginner Traders
| | | | | |
Regulators | ASIC, CMA, CySEC, FSCA | ASIC, CySEC, FCA, SCB | FMA, FSA | ASIC, BaFin, CMA, CySEC, DFSA, FCA, SCB | ASIC, CySEC, DFSA, FSC Belize |
Year Established | 2005 | 2009 | 2014 | 2010 | 2009 |
Execution Type(s) | ECN/STP | ECN/STP, Market Maker | ECN/STP, No Dealing Desk | No Dealing Desk, NDD | Market Maker |
Minimum Deposit | |||||
Average Trading Cost EUR/USD | 1.2 pips | 1.0 pips | 1.3 pips | 1.1 pips | 0.1 pips |
Average Trading Cost GBP/USD | 1.4 pips | 1.2 pips | 2.0 pips | 1.4 pips | 0.2 pips |
Average Trading Cost Gold | $0.16 | $0.12 | $0.90 | $0.15 | $0.19 |
Trading Platform(s) | MetaTrader 4, MetaTrader 5, cTrader, Proprietary platform, Web-based | MetaTrader 4, MetaTrader 5, Trading View | MetaTrader 4, MetaTrader 5, cTrader, Trading View | Other, MetaTrader 4, MetaTrader 5, cTrader, Proprietary platform, Trading View+ | MetaTrader 4, MetaTrader 5, Proprietary platform |
Islamic Account | |||||
Negative Balance Protection | N/A | N/A | |||
| Visit Website | Visit Website | Visit Website | Get Started Visit Website75-95% of traders on margin lose | Visit Website |
FP Markets
In Summary ECN trading with leverage up to 1:500FP Markets offers quality education via trading course videos, webinars, podcasts, events, and e-books. Trading Central and Autochartist, available as plugins for the MT4/MT5 trading platforms, offer analytics and actionable trading signals. FP Markets also publishes in-house content via its newsletter, available via a free subscription. It makes FP Markets one of the best Forex brokers for beginners on my listing.
The excellent payment processor choices include 15+ cryptocurrencies. FP Markets offers copy traders its proprietary FP Markets solution, fee-based Signal Start, and the well-known Myfxbook Autotrade service. Traders can also use the embedded MT4/MT5/cTrader copy trading services.
Pros & Cons
- Choice of trading platforms and auxiliary trading tools
- Very competitive cost structure and excellent asset selection
- Low minimum deposit requirement and leverage of up to 1:500
- Well-regulated and trustworthy
- Availability of Iress geographically restricted
Eightcap
In Summary Competitive pricing + excellent daily videosEightcap is home to an outstanding technology infrastructure but fails to upgrade its out-of-the-box MT4/MT5 trading platforms. For a minimum deposit of $100, traders get maximum leverage of 1:500. The limited asset selection makes Eightcap a good choice for beginner traders and advanced ones with a focused trading strategy. One of the most notable benefits at Eightcap is the ECN pricing environment, offering traders access to raw spreads for a commission of $7.00 per round lot. When it comes to educating beginner traders, Eightcap presents a high-quality selection of articles. New clients can start their journey in the Trading Education section. It consists of broad topics that enhance the understanding of financial markets.
Pros & Cons
- Low minimum deposit and high leverage of up to 1:500
- Competitive cost structure
- Excellent technology infrastructure and seasoned management team
- Daily research and quality educational content
- Limited leverage in some areas
BlackBull Markets
In Summary Best ECN trading environment, with scalping and hedgingBlackBull Markets was founded in 2014 in New Zealand. Like many antipodean Forex brokers, BlackBull Markets is an ECN broker, offering raw spreads and commissions. They are regulated in New Zealand by the Financial Services Providers Register (FSPR) and offer a maximum leverage on some Forex currency pairs as high as 500 to 1. In addition to their global headquarters in New Zealand, BlackBull Markets also has presences in the form of branch offices in New York and Malaysia. BlackBull Markets offers a relatively tight range of tradable assets: 27 Forex currency pairs and crosses, gold, silver, crude oil, natural gas, and 6 major equity indices. That should be sufficient for those traders with more focused strategies not requiring wide diversification.
Pros & Cons
- ECN/NDD execution model with deep liquidity
- Institution-grade pricing for retail traders via proprietary price aggregation
- ZuluTrade and Myfxbook for social trading
- Leverage of up to 1:500
- Limited deposit options
Pepperstone
In Summary Great ECN execution on MT4/5, cTader, TradingView and Pepperstone proprietary platformI rank Pepperstone among the best Forex brokers for beginners, ensuring quality education featuring trading guides, educational videos, webinars, and content focused on core trading aspects like liquidity or a dedicated nine-lesson Forex educational course. Autochartist offers actionable trading signals on MT4/MT5, upgraded with the 28-plugin Smart Trader Tools package.
Pepperstone offers Capitalise AI, which supports algorithmic trading in a code-free environment. It is also a leading copy trading broker, presenting its proprietary mobile app ideal for copy traders. Copy trading services include MT4/MT5/cTrader copy trading, Myfxbook Autotrade, and DupliTrade. Social traders can connect to TradingView with 50M+ peers.
Pros & Cons
- Excellent choice of trading platforms consisting of MT4/MT5, cTrader, TreadingView and Pepperstone Platform
- Market-leading MT4/MT5 upgrade package, Autochartist, and API trading
- Social trading support via Signal Start, MetaTrader Signals, Copy Trading by Pepperstone, DupliTrade
- Leverage of up to 1:400 depends on jurisdiction and superb trade execution
- Demo accounts have 60-day time limits
XM
In Summary Exception range of assets + negative balance protectionI rank XM among the best Forex brokers for beginners as it provides exceptional education, with the live education room available Monday through Friday between 06:00 and 15:00 GMT at its core. Beginners also receive actionable trading recommendations, and the $5 minimum deposit ensures accessibility to all traders, boosted by deposit bonuses.
XM rewards active traders with a four-tier loyalty program and supports algorithmic traders with VPS hosting. The well-balanced asset selection exceeds 1,000 assets, and the proprietary copy trading service pays signal providers up to 50% profit share. Swap-free trading and low trading fees ensure a competitive edge.
Pros & Cons
- Outstanding trading tools and loyalty program
- Low minimum deposit, high leverage*, and competitive trading cost
- Excellent research and education
- Trustworthy and transparent with generous bonuses and incentives
- Inactivity fee
What is Forex Trading?
Forex trading basically refers to exchanging one currency for another one and speculating on price action. One example is buying euros for US dollars. Currencies remain quoted in pairs, with the EUR/USD the most liquid one. The first currency is known as the base currency, and the second one is a quote currency. Traders may buy or sell currency pairs, most conveniently online, via Forex brokers. A trader who buys or sells the EUR/USD exchanges euros for US dollars. One of the most notable benefits of Forex trading is leverage, which results in lower capital entry requirements versus other assets, like equities. The Forex market is the most liquid one globally, with daily turnover slowly approaching $7 trillion.
What is a Forex Broker?
A Forex broker acts as the intermediary between Forex traders and the Forex market. Some Forex brokers deploy the market-making model, profiting directly from client losses where they remain the counterparty. Other brokers use the ECN/STP/NDD execution model, matching orders and granting access to liquidity. The former has higher mark-ups in a commission-free pricing environment versus raw spreads for a fee and often a volume-based rebate program. A Forex broker also provided traders with a trading platform, either a proprietary solution, the retail market leading MT4 or the ECN favorite cTrader. Some try to push the MT5 trading platform, widely considered the failed successor to MT4. The best Forex brokers for beginners maintain a high-quality educational section, competitive market research and commentary, and excellent trading tools.
How Much Money Do You Need to Trade Forex?
One of the most frequent questions of beginner traders is “How Much Money Do I Need to Start Trading Forex?” While the answer depends on individual circumstances, new traders should consider no less than $100 and only trade micro-lots. One micro-lot equals 0.01 lots or 1,000 currency units in a standard Forex trading account and is usually the minimum trade size at most brokers. A $100 portfolio suffices for beginner traders to learn how to trade in a live trading environment and presents tremendous educational value.
What Are the Most Popular Currency Pairs?
The most liquid currency pair is the EUR/USD. Other major currency pairs include the EUR/JPY, the EUR/GBP, the EUR/CHF, the GBP/USD, the USD/JPY, the USD/CHF, the USD/CAD, the AUD/USD, and the NZD/USD. Per the latest Triennial Survey by the Bank for International Settlements (BIS), 88% of all Forex traders include the US dollar. The Chinese yuan (CNY) is the eighth most traded currency globally, positioned to become more dominant moving forward. Other emerging currencies to monitor are the Russian ruble, the Mexican peso, the Indian rupee, the Brazilian real and the South African rand.
Can You Get Rich by Trading Forex?
Getting rich by trading Forex remains a possibility, but a rare one. It requires discipline, patience, time, and capital. Traders must first master the psychology of trading before thinking about a trading strategy. It may require more than a decade of successful trading before a portfolio reaches the necessary size to take it to the next level and become rich. Most retail traders, between 70% and 85%, face trading losses, and less than 2% earn sufficient money from trading to rely on it as their sole source of income.
How Do I Start Trading Forex?
There are heated discussions about the best approach, but I recommend reading about trading psychology and Forex trading strategies suitable for beginners as first steps. The subsequent topics to study are fundamental and technical analysis. From there, learning in a live account with a small deposit and trading micro-lots presents the successful approach traders take. Many retail traders fall into the demo account trap, which provides no trading experience but can create a false sense of accomplishment.
How Do I Choose a Forex Broker?
Trading with a regulated Forex broker is a must, but the regulation should not diminish the competitiveness. One example is brokers in the US and EU, which are among the most regulated ones but are equally home to the least competitive trading environments. The best brokers offer a business-friendly regulatory environment with additional safety measures. I also recommend Forex brokers with a trader-friendly commission-based pricing environment and a volume-based rebate program. Traders must ensure that their preferred broker will offer the assets they wish to trade. A cutting-edge trading platform, not just the out-of-the-box MT4/MT5 trading platforms, is another aspect to demand. High-quality trading tools demonstrate the willingness of the broker to invest in its trading environment. Finally, traders should evaluate the execution statistics of a broker, if available.
Forex Trading Regulations
Traders should never open an account with an unregulated broker. Not all regulators ensure a competitive trading environment, and traders must consider the limitations and how they will impact their trading. Low leverage restrictions, like in the US and the EU, can have a long-term counterproductive impact.
The Forex Platform/Software
The Forex trading platform is where traders spend the bulk of their time researching, analyzing, and trading. Therefore, a cutting-edge platform is a requirement. Unfortunately, most Forex brokers only offer the core MT4/MT5 trading platforms without any required add-ons, rendering them sub-standard. I recommend that traders opt for brokers providing free upgrades and other competitive trading tools.
Commission & Spreads
Commissions and spreads are direct trading costs that will have a notable impact on the trading strategy and outcome. I recommend a commission-based trading account with a minimum mark-up of 0.0 pips and a commission of no more than $7 per round lot, plus a volume-based rebate program. Traders who favor a commission-free trading environment should not accept minimum spreads above 0.7 pips.
Account Types
Many brokers continue to offer tiered trading accounts, a dated practice slowly being replaced by one account type for all. Competitive brokers with multiple accounts generally have a different one based on the trading platform and execution type. Trades should avoid brokers who offer improved trading conditions for higher deposits.
Deposits & Withdrawals
All regulated brokers support bank wires and credit/debit cards. I recommend that traders keep their trading-related transactions and their day-to-day banking separate. Third-party payment processors are more cost-efficient and faster, which I highly recommend for trading purposes. Depending on the location of the trade, some offer debit cards, ensuring swift access to funds.
Customer Service
The best Forex brokers for beginners will describe their products and services transparently. It limits the need for customer support to emergencies, for which a quality broker will offer numerous methods of contact. Traders should ensure that a phone number and live chat remain two of the options.
Tips for Beginner Traders
- Focus on learning before earning from Forex trading
- Always trade with a regulated Forex broker from a competitive jurisdiction
- Have realistic profit expectations relevant to your deposits
- Trade with a Forex broker offering a cutting-edge trading platform and tools
- Opt for a commission-based trading account with a volume-based rebate program
- Learn to trade in a live trading account using a small deposit and micro-lots
- Ensure your broker has a phone number and live chat function
Forex Trading Strategies for Beginners
After evaluating Forex brokers for beginners, traders must decide which strategies to use. Ideally, traders settle for ones that reflect their personality, as it will make Forex trading more natural and smoother once turbulences arise, which they will.
Before diving into specific Forex trading strategies for beginners, I strongly recommend that beginners learn everything they can about candlestick patterns and formation. Even if a Forex strategy does not use them directly, they can often confirm core levels like support or resistance or hint at potential price action reversals. Therefore, candlesticks can help decide which Forex trading strategy to use.
Beginners can start thinking about the following strategies and customize them to their preferences:
- Price action - Traders who use price action strategies rely purely on price movements, where candlesticks are essential while ignoring technical indicators. Support and resistance are also core levels that price action traders rely on.
- Range trading - Traders will use range trading strategies on currency pairs that move within well-established support and resistance levels. Some technical indicators can help, especially when trading within support or resistance bands, which is more effective than focusing on one static level.
- Trend trading - Trend traders may use technical indicators to identify trends and locate entry levels. Moving average crossovers, the RSI, the MACD, and the CCI are among the most used technical indicators for trend traders.
Noteworthy:
- The above strategies have pros and cons.
- Profitable traders require more than one Forex strategy as market conditions change, and traders should adapt.
How to Choose the Best Account Type for Beginners?
When conducting due diligence on Forex brokers for beginners, one of the primary choices is account types. While some Forex brokers offer one account for all traders, others have multiple account type choices.
The most notable difference is trading fees. Some Forex brokers demand higher deposits for lower costs, but for beginners or seasoned professionals, trading fees are the most defining aspect of a Forex broker, as they directly impact profitability. They can also reveal which Forex trading strategies a broker actively supports or passively discourages.
Therefore, beginners should always select the account type with the lowest trading fees they can afford. The lowest trading fees are in commission-based Forex trading accounts, which allow raw spread trading.
Here is a quick snapshot of what the Forex account type should offer:
- Raw spreads trading with commissions not exceeding $7.00 per 1.0 standard round lot.
- Fast order execution times of less than 75 milliseconds.
- NDD order execution and no requotes.
- Price improvement technology
- A customizable, unrestricted demo account to test strategies, algorithmic trading solutions, and signal providers, as applicable.
- Commission-free and fast withdrawal via numerous payment processors, including cryptocurrencies.
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