Best forex brokers in March 2024

Best forex brokers in March 2024

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7 min read Published March 05, 2024

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Trillions in currency are zipping around the world, 24 hours a day, five days a week, making the foreign exchange (also known as forex or fx) markets the world’s most active. Fortunes can be won and lost quickly, as brokers routinely let traders borrow heavily to finance their speculations.

If you’re looking to get in on this action, you’ll need a broker who deals in currency, and many of the big names in stock trading simply don’t offer this feature. Because the markets are so different, you’ll also need to evaluate a forex broker on different criteria from what you would use to evaluate a stock broker.

Below are some top forex brokers, including one that allows customers to trade cryptocurrencies.

Here are the best online brokers for forex trading in 2024:

Overview: Top online forex brokers in March 2024

Interactive Brokers

Interactive Brokers is well known for its low costs and powerful trading platforms preferred by active and professional traders. Forex traders won’t be disappointed by the advanced trading tools available as well as real-time quotes from many of the world’s largest forex dealing banks. You can even trade stocks on international exchanges and attach a forex order to hedge the currency at the same time.

Interactive Brokers also began offering some cryptocurrency trading in 2021. You’ll be able to trade popular cryptocurrencies such as Bitcoin and Ethereum at attractive commissions.

• Pricing: Commission: 0.08 – 0.20 basis points
• Maximum leverage: Up to 50:1
• Currency options: More than 100 pairs

Forex.com

Like its name suggests, Forex.com specializes in currency trading (though it trades in metals and futures, too) and it offers a plethora of attractive features. Clients can select the pricing structure that suits them best: spread or commission.

Forex.com also gives traders access to more than 80 currency pairs, and its success with clients has the broker declaring that it’s the No. 1 forex broker in the U.S., in terms of assets held with the broker. You’ll get access to the broker’s own trading platform in web and mobile versions, or use MetaTrader platforms if you prefer.

• Pricing: Spread and commission, depending on account type
• Maximum leverage: Up to 50:1
• Currency options: More than 80 pairs

Ally Invest

Ally Invest is better known as a low-cost stock broker (and for its especially good prices on options trades), but currency trading really adds some breadth to its offerings. Ally is a good choice for traders just starting out, and it offers 50 currency pairs and the brokers’ easy-to-use charting software, including a mobile app, or you can go with MetaTrader.

Ally also allows you to open a $50,000 practice account so that you can see how currency trading works, even if you don’t intend to actually trade. Given the difficulty of forex trading, that’s a great resource for beginners to try it out.

IG

IG is a more specialized broker focused on forex, and it’s open to American investors. It’s a high-powered broker that nevertheless offers many features, such as a demo account, that may help novice traders. The broker offers a web platform, a mobile app and access to MetaTrader4 and ProRealTime platforms.

IG allows spreads as low as 0.8 pips (a pip is one ten-thousandth of a point) on the most traded currency pairs, and says that its pricing is at least 20 percent lower on the euro-dollar pair than the top U.S. brokers. The broker also provides an extensive range of charting capabilities across its platforms.

• Pricing: Spread
• Maximum leverage: Up to 50:1
• Currency options: More than 80 pairs

OANDA

OANDA offers forex trading across 68 currency pairs, including all the major and minor pairs, ensuring that you have the important options at your disposal. Clients will have a choice of the brokers’ own trading platforms in web and mobile versions or can turn to the popular MetaTrader 4 platform. Pricing is typically on a spread basis, though clients doing more than $10 million in volume a month may participate in the broker’s Elite Trader pricing structure and achieve significant discounts.

OANDA also allows cryptocurrency trading through Paxos, allowing you to trade a handful of digital currencies, including the most popular, Bitcoin and Ethereum. Bitcoin commissions are as low as 0.25 percent.

• Pricing: Spread, and volume discounts
• Maximum leverage: Up to 50:1
• Currency options: 68 pairs

What to consider when choosing a forex broker

While you may be familiar with many of the brand-name online stock brokers, only some of them deal in forex trading. Instead, a plethora of more specialized niche brokers populate the space, and they may cater to high-volume currency traders looking for every possible edge.

But regardless of which kind of broker you’re targeting, you’ll want to focus on at least a few features that are common to any forex broker:

• Pricing: Forex brokers have two ways to price their services: by baking the price into the buy-sell spread or on a commission basis. Spreads are typically quoted in pips, or one ten-thousandth of a point.
• Leverage: How much leverage will the broker let you assume? In general, traders look for a higher degree of leverage to magnify the moves in the currency market. The level may differ depending on the liquidity of the currency.
• Currency pairs: A handful of major pairs dominate trading, but how many other pairs (minors, exotics) does the broker offer? The most popular currencies include the U.S. dollar, the euro, the Japanese yen, the U.K. pound and the Swiss franc.
• Spreads: How wide are the broker’s spreads for trades? The larger the spread, the less attractive the trade. Of course, brokers who charge a spread markup will tend to have wider spreads because that’s how they get paid.

Investors looking to buy cryptocurrency may be able to do so through some of the traditional stock brokers such as Interactive Brokers or Robinhood, though the trading works differently from regular forex trading as described above.

One downside for American traders is that many top forex brokers are based in the U.K. and simply won’t accept them as clients because of their citizenship. The brokers above are all fine for Americans, however.

Forex trading FAQs

What is forex trading?

Forex trading involves exchanging one currency for another. There may be practical reasons for this, such as traveling abroad, or traders may look to speculate and profit off of currency movements. Foreign exchange markets tend to be the largest and most liquid in the world.

What are the risks of forex trading?

Forex traders face several risks including interest rate risk, risks due to leverage, country risk and counterparty risk. Traders will need to be familiar with many different variables that can impact a country’s currency including central bank developments, inflation, trade deficits and more.

How do I know if my forex broker is regulated?

Regulation of forex brokers is important for maintaining business standards and protecting clients. The Commodity Futures Trading Commission (CFTC) says that most scams involve unregistered people, products or companies. So if you’re engaging in forex trading, you’ll want to use a registered broker, and it’s actually easy to determine if you’re working with one.

The CFTC registers and regulates forex brokers. A broker must meet certain financial standards, its personnel must go through background checks, and the firm must adhere to certain conduct and disclosure requirements.

You can check whether a forex broker has been properly registered by going to the National Futures Association website (which is under the supervision of the CFTC) and using its search tool. You can check a broker’s registration, its disciplinary or regulatory history and financial information. Be skeptical of any entity that is not properly registered.

What’s the difference between a dealing desk and an agency broker?

When you trade forex, you need a broker to execute your trades, but the broker may not always be acting in your interest first. There are a couple different kinds of models – a dealing desk and an agency broker – and they have different incentives as they’re executing trades.

An agency broker is one who acts in the best interest of its clients, and whose job it is to find the best deal price. So the agency broker does not hold any inventory of the assets being traded, which could put the agent’s and client’s interests in conflict, and instead merely acts as an intermediary. The client pays the agent specifically for this service, which could save the client a lot of money. So agents are usually reserved for high-net-worth clients who move massive amounts of money.

In contrast, a dealing desk trades in securities and owns them at the same time. This structure means the dealing desk may not always be working in the client’s interest but rather in its own.

So a dealing desk can operate as both a principal and agent in a transaction, creating some strange conflicts:

• As a principal, the dealing desk trades for its own account, meaning that it may take a trade from a client in which it has a vested interest in the outcome. In other words, the dealing desk could profit at the client’s expense, perhaps unloading inventory to the client just before the market falls or buying it just before the market rises.
• As an agent, the dealing desk can execute trades for a client and will pass along the trade price.

Because of this structure, a client may never know where the dealing desk’s interests lie on any individual trade – a problematic setup if you’re the client.

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What Is Forex Trading and How Does It Work?

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The investment world is full of opportunities, and the stock and bond markets get most of the attention. But another market that significantly overshadows them when it comes to volume is the foreign exchange market, which trades trillions of dollars worldwide every day.

Forex trading, the common name for the foreign exchange market, entails trading currencies instead of securities (think the U.S. dollar, European euro or Japanese yen).

Although many entities trading foreign currencies via the forex market are banks, governments and high-volume brokers, there’s space at the table for individual investors as well. But, as with most investing opportunities, there’s also risk. Read on to find out more about the pros and cons of forex trading.

Table of contents

• What is Forex Trading?
• How does Forex Trading work?
• What is the Forex Market?
• How to Start Forex Trading
• What are the Best Forex Trading Brokers?
• What are the Most Common Forex Terms?
• Forex Trading FAQs

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What is Forex Trading?

Foreign exchange trading, or forex trading, is the buying and selling of foreign currencies to make a profit.

Trading forex requires the trader to anticipate the strength of foreign currencies when pitted against one another, using preset currency pairs like the euro and the U.S. dollar. The goal is to buy currencies at lower prices and sell them at higher prices to earn a profit.

The forex exchange operates 24 hours per day, five and a half days per week. The trading day starts in Australia, then moves to Europe and ends in North America, with markets overlapping during the day.

The market is highly volatile and can be affected by everything from consumer confidence to inflation to geopolitical events.

Pros and Cons of Forex Trading

• Offers a global marketplace
• Low cost of entry
• Potential for fast returns
• Many platforms offer free training

• High volatility
• High risk of fraud
• Steep learning curve

Pros explained

Offers a global marketplace

Investors are not limited to trading in their own country’s currency, which provides plentiful options for trades.

Low cost of entry

While many of the movers and shakers buy millions of dollars worth of trades, it’s possible and even easy to get started with as little as $5, depending on the platform you choose. By using leverage, even small amounts of money can have a big impact (though, again, with risk).

Potential for fast returns

The forex market almost never sleeps; it’s open 24 hours, five and a half days a week around the world. Because most traders use leverage, there’s also the potential for big gains — and big losses.

Many platforms offer free training

Since the forex market is known to be volatile, many trading platforms offer free training and a practice account. With a practice account, potential traders can make trades, explore leverage and learn while investing imaginary money until they are confident enough to invest their cash.

Cons explained

High volatility

Compared to the stock market, there are even more factors that affect the forex market, like political movements, tourism, interest rates and more. Anticipating what will move the price is extremely difficult, making this a risky market to enter.

High risk of fraud

The forex market is particularly susceptible to fraud schemes. Most recently, the Commodity Futures Trading Commission (CFTC) warned of romance scams involving dating apps. Since all trading is done digitally, it’s easy to get duped into transferring funds to an unscrupulous trader using a fraudulent platform.

Steep learning curve

Trading on forex is very different from buying shares on the stock market. Although practice accounts are available, there’s still the potential for loss on any given day.

How does Forex Trading work?

While trading forex does have some similarities to the stock market, it also has some stipulations that complicate trading. For example, rather than just buying one currency and waiting for it to appreciate, forex traders have to choose currency pairs.

The most common currency pairs that include the U.S. dollar are EUR/USD (euro), USD/JPY (Japanese yen), GBP/USD (Great Britain Pound Sterling), USD/CHF (Swiss francs), AUD/USD (Australian dollar), USD/CAD (Canadian dollar), and NZD/USD (New Zealand dollar). However, there are at least 30 currency pairs traded every day.

Forex trading is speculative by nature. Once an investor has chosen a currency pair, they speculate on how much of one currency they can purchase using the other currency in the pair.

For example, if someone buys EUR/USD, they speculate that they may be able to buy more euros now at a lower price using USD than they could in the future. If the price of euros increases, the investor can make a profit. If the price goes down, the investor may lose money.

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What is the Forex Market?

The forex market is different from the stock market in that it has no central, physical address like Wall Street. Instead, the forex market is a complex network of computers and brokers all over the globe. Within that network are three types of markets where foreign currency is traded daily.

Types of Forex Market

• Spot Market: The spot market is like a snapshot of currency prices. Currencies are traded at their value at that moment in time with no longer-term speculation. Spot trades can last minutes or even seconds and are typically conducted by large trading entities like banks and governments. Profits tend to be very small, but the volume makes it worth it for large traders.

• Forward Market: The forward market trades on the expectation of a future price change. A forward market contract is made between two parties, who both agree to transact at a mutually agreed upon date in the future. Forward market buys attempt to lower the risk inherent in forex trading.

• Futures Market: The futures market is similar to the forward market. But while the forward market contracts are typically bespoke contracts brokered between two parties, futures contracts are standardized based on the length of term and quantity of units and traded on the exchanges.

How to Start Forex Trading

Although large entities complete most forex trading, starting as an individual investor is fairly straightforward. Many broker sites allow investors to create a profile and fund an account, just like they would for fund or stock trading.

For those who want to try forex trading but want guidance, some sites offer advice and training. Some even provide the opportunity to practice trading without investing any money.

Forex trading is highly liquid and volatile, so investors should thoroughly research what they buy and the risks of trading before investing. Consider what affects the market and how long you want to keep your capital invested. Remember that on a 24-hour exchange, change can happen any time of day or night.

What are the Best Forex Trading Brokers?

There are as many forex brokers as there are stock trading apps. However, since forex is traded worldwide, you must verify that the brokerage you’re considering allows U.S. investors. Many do not.

Do research to determine which forex trading platforms make sense for you. If you’re primarily interested in foreign exchange trading, Forex.com could be an option. Other popular online stock trading platforms, like TD Ameritrade and IG, also offer forex trading.

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What are the Most Common Forex Terms?

Forex trading comes with its own terminology. Here are a few key terms to know.

• PIPs: PIPs stands for percentage in point or price interest point, and they are the smallest unit of measurement for forex trading.

• Leverage: Leverage allows retail traders to invest a small amount of money and use it to control a much larger amount. For example, 50:1 leverage is very common. That means that for every dollar you invest, you’ll be able to control $50. While this allows smaller investors to enter the arena, it also increases the stakes. Without leverage, you would have to deposit the entire amount you wished to hold. With it, you can invest much less and still trade a significant amount.

• Margins: Using leverage allows traders to earn greater profits, but they still must have the money to cover their investments. This collateral is called the margin. Margin rates vary based on which currency pairs are being traded.

Forex Trading FAQs

What is the difference between a forex broker and a forex platform?

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Forex brokers are very similar to online stock trading platforms — firms that execute trades on the forex markets. Forex brokers take on the heavy lifting of monitoring a nearly round-the-clock currency trading environment.

Brokers are regulated by the National Futures Association (NFA) and the Commodity Futures Trading Commission (CFTC) and typically charge a fee based on a price per trade or a percentage of the profits.

Similar to investing platforms, forex platforms are software programs that allow investors to trade forex independently rather than relying on financial advisors. Platforms also charge fees for each trade but they may be less expensive than a broker’s fees.

How do you avoid forex trading scams?

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Like any other investment method, forex trading can be susceptible to scams. According to the CFTC, the best way to stay safe is to execute trades with firms registered with federal or state authorities. You can check the registration of a person or firm by visiting cftc.gov/check.

Is forex trading profitable?

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Smart investors can profit from forex trading, but since it is a very volatile market, the potential for losses is also very high.

How risky is investing in forex trading?

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According to the CFTC, forex trading is one of the riskier investments available for two reasons. First, forex trading is highly volatile — markets can be affected by inflation, business confidence, geopolitical events and more.

The second reason is that forex trading has become a hotbed of fraud schemes. Unscrupulous figures often offer highly attractive and sophisticated offers that can be difficult to vet. Investors should proceed with caution.

How much money do I need to start trading?

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Every forex trading platform or brokerage has different minimums. Some will allow micro trades of as little as $1. However, $100-$500 is a typical minimum investment amount.

Your initial investment should be based on what type of trading you’re interested in. Different strategies require different minimums to have a chance of returning a profit.

How can I open a forex trading account?

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Opening a forex trading account is simple. First, choose a platform or broker. You’ll then be asked for basic information to verify your identity, create a username and password and to link a bank account to fund trades.

Many sites offer a training mode where beginners can try their hand at trading without using real money. Once you’re comfortable with how your account works, you can start trading.

Summary of our guide to forex trading

• The foreign exchange market is a high-volume market for trading international currencies available all over the world. It’s open 24 hours a day, five and a half days a week.

• Different currencies are paired up to determine which will gain value and which will lose value in order for traders to make a profit.

• While large players dominate, retail investors can make significant profits if they understand the system and do adequate research to buy and sell wisely.

• There’s a very low entry price to the market, and investors can utilize leverage to make each trade more impactful. This can increase profits when trades are good, but can also result in greater losses.

• There is a steep learning curve to forex trading, and the markets are very volatile. Given the risks involved, investors should proceed cautiously.

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