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Huzefa Hamid
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.
The ratings shown on DailyForex.com are determined by hours of research from our editorial team into over 10 factors, including account fees, deposit/withdrawal options, regulatory status, tradable assets, and more.
The ratings shown on DailyForex.com are determined by hours of research from our editorial team into over 10 factors, including account fees, deposit/withdrawal options, regulatory status, tradable assets, and more.
The ratings shown on DailyForex.com are determined by hours of research from our editorial team into over 10 factors, including account fees, deposit/withdrawal options, regulatory status, tradable assets, and more.
The ratings shown on DailyForex.com are determined by hours of research from our editorial team into over 10 factors, including account fees, deposit/withdrawal options, regulatory status, tradable assets, and more.
High level regulation in multiple jurisdictions
Impressive range of tradeable assets including vanilla options and gold options
The ratings shown on DailyForex.com are determined by hours of research from our editorial team into over 10 factors, including account fees, deposit/withdrawal options, regulatory status, tradable assets, and more.
Solid broker for scalping and hedging
Institutional-style trading opportunities for retail traders
Best all-around broker with high floating leverage and fast execution
FXTM established itself as a market leader for traders from emerging and frontier markets. The upgraded MT4/MT5 platforms offer traders a better trading environment compared to most brokers. With a minimum deposit of $10 and maximum leverage of 1:2000, FXTM remains accessible to all types of traders and provides them with a distinct edge. The commission-based cost structure ranks among the industry-best with a minimum spread of 0.4 pips and a starting commission of $4.00, which can get as low as $0.80 for active traders. Beginner traders should take advantage of the award-winning education available at FXTM, for which it received a Best Education Provider 2020 Award. Thirteen well-thought-through guides provide new clients with an excellent introduction, divided into ten Beginners and 21 Advanced lessons.
Pros
Excellent commission-based Forex pricing environment and transparency
Upgraded MT4/MT5 trading platforms plus proprietary mobile trading app
Quality market research and educational content for beginner traders
Proprietary copy trading platform, low minimum deposit, and high leverage
Cons
Limited choice of cryptocurrencies and commodities
fpmarkets is an ASIC-regulated Australian brokerage which launched in 2005. For most traders, the unique selling point of this broker is in the extremely wide range of tradable assets offered, providing the opportunity to trade over ten thousand individual stocks and shares including publicly quoted Hong Kong and Australian companies. Ffpmarkets also offers 60 Forex pairs and crosses, 11 equity indices, the major commodities, and 5 cryptocurrencies including Bitcoin. fpmarkets offers an unusual hybrid ECN/STP execution model, meaning their clients can choose between ECN style of execution giving a very high level of speed, and a “straight through processing” execution style which allows for more “natural” spreads.
FP Markets Pros & Cons
Pros
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
Eightcap 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
Low minimum deposit and high leverage of up to 1:500
Competitive cost structure
Excellent technology infrastructure and seasoned management team
Highly regulated, choice of fixed or floating spreads
AvaTrade is one of the largest Forex / CFD brokers and well-known for offering their clients a choice of fixed or floating spreads. They have a very high and strong level of regulation. AvaTrade is directly regulated in Ireland (and by extension, the European Union), Australia, Japan, South Africa, and the British Virgin Islands. Outside the European Union, Ava offers maximum leverage on Forex currency pairs as high as 400 to 1. AvaTrade offers trading in over 55 different Forex currency pairs, 17 commodities, 20 equity indices, 14 cryptocurrencies, plus 66 individual stocks and shares. 2 bonds and 6 ETFs are also on the menu.
Pros
High-quality educational offering via SharpTrader
Excellent choice of trading platforms catering to various trading needs
Broad asset selection and cross-asset diversification opportunities
Well-regulated and trusted broker with oversight from a central bank
Best ECN trading environment, with scalping and hedging
BlackBull 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.
BlackBull Markets Pros & Cons
Pros
ECN/NDD execution model with deep liquidity
Institution-grade pricing for retail traders via proprietary price aggregation
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.
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
Methodology (How We Test/Choose)
We reviewed over 100 brokers in-depth based on eleven criteria from the perspective of a trader. Each research consisted of over 2,000 words and lasted more than ten hours. We ensured the most comprehensive approach to identify the best Forex brokers for beginners.
The eleven criteria used in our research consist of:
The best Forex broker for beginners will offer a high-quality educational program. I recommend the brokers from our list as a starting point.
Which broker is the best for Forex?
Any broker offering a cutting-edge trading platform, a broad asset selection, and a competitive pricing environment is best for Forex trading.
Can I start Forex with $10?
While it is possible to start with $10 at some broker, I highly recommend against it. Beginner traders should consider a minimum of $100 if trading micro lots, whereas a deposit of $10 can suffice for trading in nano-lots.
Can I teach myself to trade Forex?
The most successful Forex traders taught themselves how to trade. Learning from your mistakes is priceless, and traders should never pay for education, as all the material is available online and free of charge.
I’m a trader and manage my own capital. I trade the major Forex pairs, some Futures contracts, and I rely entirely on Technical Analysis to place my trades. Today, I am also a Senior Analyst for DailyForex.com. I began trading the markets in the early 1990s, at the age of sixteen. I had a few hundred British pounds saved up (I grew up in England), with which I was able to open a small account with some help from my Dad. I started my trading journey by buying UK equities that I had read about in the business sections of newspapers. The 1990s were a bull market, so naturally, I made money. I was fortunate enough in my early twenties to have a friend that recommended a Technical Analysis course run by a British trader who emphasized raw chart analysis without indicators. Having this first-principles approach to charts influences how I trade to this day.
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