Opening an account with a Forex broker can prove a bewildering task which is why we have selected a range of the top brokers to make your task easier. All of the brokers in the below table have been carefully selected as for meeting the minimum requirements that we think a broker should provide.
These brokers are easily accessible with low opening deposits, offer competitive spreads, access to good trading resources and are fully regulated brokers. In addition they also each offer access to a free demo trading account which you can use to try out your skills without putting your capital at risk. You will find more information in our guide below.
NOTES TO TABLE
Min Deposit – This is the lowest account deposit required to open an account with the broker.
Spread – For comparison we show the typical spread of the EUR/USD available on the lowest level accounts provided by the broker.
* Denotes the broker provides fixed spreads.
Your Guide To Choosing A Forex Broker
To help you with choosing the best Forex broker for you trading, we have prepared the following Forex broker guide. This helps to explain the comparison table above and will assist you in finding the best fit broker for your trading.
Most brokers denominate the account currency in USD (United States Dollars). However you will find some that will also allow you to run your account in other currencies, most commonly EUR, GBP and JPY. If you want to operate your account in more ‘exotic’ currencies then you will need to check the availability with the broker before opening an account.
A wide range of funding options are available with most brokers. Here again this will vary, but all will accept funding via bank wire transfers, debit cards and credit cards. Alternative funding methods including Pay Pal, E-gold, e-Bullion and Western Union. Standard bank wires are also now supported by many brokers.
As Forex brokerages have become more competitive they have increasingly brought down the deposit requirement that is need to open a new trading account.
Accounts based on Mini and Micro lots are now commonplace and give a low cost access to the Foreign Exchange markets.1 Mini lot is equal to 10,000 USD. This means that to control 10,000 USD in the Forex markets you would risk only $50 with a standard leverage of 200:1. In comparison 1 Micro lot is equal to $1,000 and therefore you would risk only $5. This allows smaller ‘lot’ sizes and therefore the ability to balance risk while you get used to the markets.
Although there is no direct commission paid to a Forex broker for any deal (buy or sell) that you make on your account, you will be subject to a spread on a currency pair. This is the difference between the buying and selling price and will depend upon the actual currency pair being traded. The lowest spreads are on the most traded currency pairs such as the EUR/USD.
Two types of spreads are available from brokers; Variable and fixed. Variable spreads tend to be lower, but can widen under certain market conditions. Fixed spreads as the name suggests, while generally slightly higher, will remain constant throughout all market conditions and therefore give a known cost to trading.
Leverage is the ratio between the total capital that is made available for trading and the actual capital that you have on your trading account. For example, a ratio of 100:1 means that your broker would lend you $100 to use in the market for every $1 of your actual deposited capital. Therefore you could command $100,000 in the markets with an account of $1,000.
The amount of leverage offered by brokers will vary, typically starting at around 50:1 with 200:1 being a common level offered by brokers. Remember however that trading with a high leverage can not only increase your potential for profit, it can similarly lead to higher losses. Simply seeking out the highest leverage from your FX broker is not the aim of the game!
Regulated Forex Brokers
Trading with a regulated Forex broker account is a necessary requirement if you are looking to provide some protection for the capital that you deposit with your broker. Regulation provides some security for your funds as the broker is frequently audited by the regulator to ensure their financial solvency and any money you deposit must be held in a segregated account.
In addition regulated brokers must sign up to a code of conduct which governs the way in which they operate their business, manages their financial affairs and importantly serve their trading clients.
There are a number of varieties of trading platforms that are available for dealing on the currency markets. They tend to be split into two main types: web based and client based. Web based platforms offer the advantage that you can trade from any web browser, while client platforms will require that you download the trading terminal to your personal computing device to both access and deal on your account.
The MetaTrader platform is a popular client trading platform and is required if you want to make use of automated trading systems or ‘Expert Advisors’. It is often offered alongside other trading platforms and mobile trading solutions which most brokers now provide.
Many brokers now offer account bonuses when you make your first deposit with your broker. These can provide a great way in which to boost you available trading capital. This will allow you to trade at higher levels that you would normally be able to with your deposit alone, adopt additional strategies to trade on your account or even manage your trading risks.
Don’t expect to instantly withdraw your bonus. You will normally have to meet a minimum required trading level in your account before you are able to withdraw the bonus from your account. While account opening offers have many great advantages, you will only gain the benefit from them if you manage your account correctly.