Best Low Commission Brokers [year]

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Affiliate Disclosure DailyForex.com adheres to strict guidelines to preserve editorial integrity to help you make decisions with confidence. Some of the reviews and content we feature on this site are supported by affiliate partnerships from which this website may receive money. This may impact how, where and which companies / services we review and write about. Our team of experts work to continually re-evaluate the reviews and information we provide on all the top Forex / CFD brokerages featured here. Our research focuses heavily on the broker’s custody of client deposits and the breadth of its client offering. Safety is evaluated by quality and length of the broker's track record, plus the scope of regulatory standing. Major factors in determining the quality of a broker’s offer include the cost of trading, the range of instruments available to trade, and general ease of use regarding execution and market information.

Commissions and spreads are the two primary trading costs Forex traders should evaluate. Forex traders who keep positions open overnight, especially leveraged ones, must also consider swap rates, one of the most overlooked fees.

While it appears as a low-cost offer, at first sight, most commission-free pricing environments have higher overall trading costs compared to the best Forex brokers with low commission rates.

Read on to view my shortlist of the best low commission Forex brokers below, followed by an explanation of their associated account types and other issues, and an explanation as to how to choose the best low commission Forex broker for you.

Best Low Commission Brokers 2021

  1. IG – Best choice of assets.
  2. Pepperstone – Best ECN broker.
  3. FXTM - Best all-around pricing.
  4. FP Markets – Best upgraded trading platforms.

1
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.
Best all around broker
High floating leverage + fast execution
2
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.
ECN-style trading
Daily market research and Autochartist access
3
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
4
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
5
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.
Trade 1,000+ financial instruments
Experience low, competitive spreads
Multiple funding and swift withdrawal options

FXTM

5.0/5 in this category
In Summary
Best all-around broker with high floating leverage and fast execution

FXTM remains one of the best-priced Forex brokers industry-wide. The commission between $0.80 and $4.00 per round lot, dependent on monthly trading volume, ranks among the cheapest industry-wide, especially for high frequency and high-volume traders. The contract specifications list a minimum spread of 0.1 pips, available on five currency pairs, confirming broad-based liquidity. FXTM fixes MT5 commissions at $4.00 per lot, but they remain flexible based on volume in MT4.

The minimum deposit is $500 to get access to the FXTM Advantage account, but traders with a $25,000 portfolio qualify for commission-free trading and raw spreads of 0 pips. The FXTM dynamic leverage consists of six tiers. The minimum is 1:25 for trades with a notional value of $8M+, and the maximum is 1:2000 for transactions up to $50,000. FXTM provides Forex traders with MT4/MT5, upgraded via six plugins, VPS hosting, and FXTM Invest for retail account management.

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

FP Markets

5.0/5 in this category
In Summary
ECN trading with leverage up to 1:500.

FP Markets charges $6.00 per 1 round lot for raw spreads of 0 pips, and its minimum deposit is only $100. This places FP Markets among the best Forex brokers with the lowest capital requirements for access to low-cost commission pricing structures. FP Markets list minimum spreads of 0 pips on 35 currency pairs, but average one tick higher, with the EUR/USD and the USD/JPY at 0.1 pips, while the rest clocks in above that. Traders also get maximum leverage of 1:500 and order execution of 40 milliseconds, ideal for scalpers and high-frequency traders.

Adding to the advantages at FP Markets are upgraded MT4/MT5 trading platforms with twelve plugins and VPS hosting. Manual traders can rely on third-party services from Autochartist, while MAM/PAMM accounts support retail account management. FP Markets also developed its proprietary FP Markets Copy Trading, available alongside Myfxbook Autotrade and the embedded MT4/MT5 copy trading service.

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

  • Well-regulated and trustworthy

Cons
  • Availability of Iress geographically restricted

AvaTrade

5.0/5 in this category
In Summary
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

Cons
  • Trading costs competitive but nothing special

BlackBull Markets

4.5/5 in this category
In Summary
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

  • ZuluTrade and Myfxbook for social trading

  • Leverage of up to 1:500

Cons
  •  Limited deposit options

Eightcap

4.5/5 in this category
In Summary
Competitive pricing + excellent daily videos

Eightcap Pros & Cons

Pros
  • 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

Cons
  • Limited leverage in some areas

Why is Low-Cost Forex Trading Important?

Every profitable Forex trader understands the hard work, dedication, commitment, and personal sacrifices it takes to join the elite group of traders who can trade for a living. While the numbers vary from year to year, roughly 2% of all Forex traders achieve this status, while a further 8% to 13% earn enough to supplement their income.

The overall retail loss rate ranges between 60% and 90%, depending on the broker and the quality of its trader base. A Forex trader who earns $0.01 per year counts as profitable, painting a brighter picture than reality. Therefore, the data serves as a rough estimate, and the number of professional retail traders, those earning their primary income from Forex trading, remains slim.

Forex trading is like any other business, and costs fulfill a central role in defining the overall success. Low-cost Forex trading is necessary, as it allows traders to increase their profits as they pay less to earn them. Efficient trading makes a tremendous difference over the long term, and beginner traders may compare it to accumulating interest.

Three reasons why trading with the best Forex brokers with low pricing is necessary for all profitable traders:

1. Increased Profitability: The most notable impact is the bottom line. Most Forex brokers with a commission-based pricing environment maintain lower overall trading costs versus commission-free offers. Trading can never exist as a free service, as genuine Forex brokers have expenses to allow traders access to markets. Forex traders should always question any offer that includes the term free, as brokers will make sure that they cover their costs elsewhere.

  • Most commission-based Forex brokers offer lower overall trading costs compared to commission-free alternatives.
  • Trading at a low commission broker allows Forex traders to earn more profits per trade from the same strategies, boosting efficiency and profitability.
  • Commission-based Forex brokers offer ECN/STP/NDD order execution, aligning interest with their traders, instead of taking the other side of the trade.

2. Superior Trading Environment: Forex brokers who maintain low trading commissions earn their revenue from trading volume as they grant traders access to raw spreads.

  • Since interests between broker and trader are aligned, the broker will invest in technology, products, and services to ensure traders have a competitive edge.
  • The more money traders earn, the more revenues brokers earn.
  • Commission-free brokers often count on the initial deposit of first-time traders and profit directly from trading losses of clients, where profitable traders present costs to brokers.

3. Manipulation-Free Trading Conditions: Commission-based Forex brokers ensure traders get manipulation-free trading conditions. Natural trading conditions include the narrowing and widening of spreads, driven by liquidity, making trading more profitable during liquid times and less profitable during illiquid ones.

  • Swap rates are where most commission-free Forex brokers earn their revenues, and Forex traders should check and compare these carefully, which can range from fair to excessive, dependent on the broker.
  • Commission-based brokers do not engage in last-look pricing or requotes, while slippage remains minimal and includes positive slippage, benefiting traders.
  • No stop-loss hunting, a known practice at market makers, (commission-free pricing environments) where price action spikes or plunges momentarily to wipe out positions before returning to normal, often masked during liquidity events.
  • Commission-based Forex brokers always route client orders to the market, while many retail orders at commission-free brokers remain in-house and never reach the market.

What should traders look for in a low-cost Forex trading environment?

Trading costs can come in a complex structure with many moving parts, and each trading strategy will incur various fees. Therefore, Forex traders must evaluate each broker based on their trading requirements, but a few aspects apply across the board for all traders.

Here is what each low-cost Forex broker should offer:

  • Access to floating raw spreads from 0 pips, where the EUR/USD spread averages no more than 0.1 pips.
  • A Commission of $6.00 per 1 round lot is the industry standard, but the most competitive commission-based Forex brokers offer between $2.00 and $4.00.
  • A volume-based rebate program, which can drop commissions to below $1.00 per 1 standard lot.
  • Positive swap rates where market conditions warrant them (where the long currency clearly has a higher interest rate than the short currency), generating overnight profits for traders positioned in this way.
  • ECN/STP/NDD order execution and deep liquidity from multiple providers, which ensures tight spreads, order placement including positive slippage, and lower trading costs.

Conclusion

Forex traders who want to trade for a living or supplement their income will usually find cheaper trading costs from a commission-based cost structure compared to a commission-free structure.

What Account Types are Available at Low Commission Brokers?

Most commission-based trading accounts are ECN accounts. ECN is short for electronic communication network. An ECN broker links market participants and liquidity providers and matches their trades and does not make its own market.

The best Forex brokers with low commission rates have liquidity aggregators, sourcing the lowest bid and ask prices from numerous networks, resulting in the lowest spreads for each asset.

What are the benefits of ECN trading?

  • Traders get pricing transparency and Level 2 quotes.
  • Faster order processing which is ideal for scalpers and high-frequency traders.
  • Deeper liquidity which is necessary for high-volume traders.
  • More availability amid higher market participation, lowering requotes and slippage.

Access to an ECN comes with associated costs, which the ECN broker pays and passes on to traders, which is why all ECN accounts are commission-based and typically grant traders raw spreads from 0 pips.

Since ECN accounts cater to demanding traders like scalpers, high-volume, and high-frequency traders, the minimum deposit is usually higher than what is commonly seen at market making brokers. A few ECN brokers allow their minimum deposit to be as low as $100, but most require a minimum of $500. A few require a sum between $2,000 and $5,000.

Despite the higher capital requirement, the combination of low commissions, tight spreads, and volume-based rebate programs creates lower trading costs versus commission-free offers.

The industry-average commission is $6.00 per 1.0 standard lot, which is why some commission-free brokers quote minimum spreads of 0.6 pips or $6.00. While it appears to eliminate the pricing advantage over ECN brokers, actual trading costs remain notably higher. ECN brokers quote tight spreads across dozens of currency pairs, while commission-free offers have a minimum teaser spread of 0.6 pips on the EUR/USD and the USD/JPY, while average mark-ups are well above that.

How to Identify Brokers with the Most Competitive Trading Environments and Best Trading Platforms?

Regulatory safety and trading costs are clearly the two most important factors to understand and evaluate when looking for a Forex broker, but they should not be the only ones. The trading environment, centered around Forex trading platforms, must ensure traders maintain a competitive edge in today's ultra-competitive and high-speed financial markets. Unfortunately, some brokers market well but fail to deliver.

Here are the key aspects beyond trading costs traders should look for in a trading environment:

1. Regulation and Security: Trading with a regulated broker will decrease the risk of malpractice and fraud. Regulated brokers are less likely to violate rules and regulations. Some trustworthy brokers operate out of business-friendly jurisdictions but supplement the absence of regulators with security features similar or superior to those offered by regulated brokers.

2. Asset Selection: Asset selection differs between traders. Therefore, Forex traders must ensure their brokers provide them with the assets they require to execute their Forex trading strategies successfully. All Forex brokers provide traders with major and minor currency pairs, ideal for focused trading strategies, where traders get the lowest spreads. Commissions remain the same, as they apply per lot and not per asset.

3. Unique Features: While this is certainly a minor consideration, brokers offering value-added services show commitment to ensuring their traders get more than the minimum requirements. VPS hosting and API trading are two features for advanced traders available at the best Forex brokers with low commission structures.

4. Research and Education: Research and education are available free of charge online, and advanced traders generally ignore them. However, beginner traders may benefit from Forex brokers who dedicate resources to maintain an in-house section. The absence of research and education does not impact the core trading environment, but it creates a services gap and shows a lack of maturity.

5. Customer Support: The best Forex brokers with low commission structures usually explain their products and services well. Traders should ensure their brokers offer phone support for emergencies, especially for financial transactions, where most issues may arise. Live chat is convenient for non-urgent matters, but traders should always check the FAQ section before reaching out to support.

6. Bonuses and Promotions: Bonuses and promotions remain tertiary products but can complement a competitive core trading environment. Terms and conditions always apply and should be considered carefully, and traders should avoid non-withdrawable offers. A well-structured bonus with acceptable conditions can help traders with portfolio-building strategies and ultimately lower trading costs.

7. Account Opening Process: The account opening process should remain a hassle-free and swift process. Brokers should not collect unnecessary information. Account verification remains a mandatory step, and traders should avoid brokers who skip this step. A copy of the ID and one proof of residency document no older than three months will satisfy AML/KYC rules for most traders, but brokers may ask for additional documents.

8. Deposits & Withdrawals: Traders should ensure deposits and withdrawals remain free of charge with internal processing times of 24 hours or less. Keeping trading-related financial transactions separate from day-to-day banking operations will provide a clear overview and assist traders during the tax season. Traders should also consider the fees from their preferred payment processor to their bank unless a debit card is available.

What to look for in Forex trading platforms?

The following three Forex trading platforms cover over 90% of the retail sector:

  • MT4 (released in 2005)
  • MT5 (released in 2010)
  • cTrader (released in 2011)

What should Forex traders know about each of the three trading platforms?

  • MT4 remains the industry-standard, accounting for the bulk of the retail trading volume, but this number shrinks a little with every passing year.
  • Most consider MT5 the failed successor to MT4, and adoption remains anemic, with pockets of growth from new Forex brokers.
  • MT5 lacks backward compatibility with MT4, its most notable flaw, rendering 25,000+ applications unusable with MT5.
  • MT4 infrastructure allows traders to transform the core version into a cutting-edge trading platform, but it requires costly plugins or development.
  • cTrader, exclusively developed for ECN trading, continues to gain market share.
  • MT4 is the leader in algorithmic trading, also available on MT5 and cTrader.
  • Developers can code algorithmic trading solutions, referred to EAs in MT4/MT5, short for Expert Advisors.
  • MT4 and MT5 have their coding language, while cTrader uses C#.
  • MT4 is home to the most EAs, custom indicators, and plugins, with 25,000+ available from within the trading platform.
  • cTrader is the best out-of-the-box trading platform.
  • All three come with an embedded copy trading feature, but MT4 also has a MAM/PAMM module for traditional retail account management.
  • MT4 is the most versatile Forex trading platform, a fact most Forex brokers exploit.

How can Forex traders ensure they trade with a competitive trading platform?

  • Traders should ensure that Forex brokers offer upgrades to MT4/MT5
  • Services from third parties like Trading Central, Autochartist, and others can add value
  • Algorithmic traders can benefit from free VPS hosting available if traders transact a set minimum monthly

Trading Costs and Maintenance Fees: Commission-Based vs Commission-Free Forex Brokers

While many first-time traders, especially millennials and GenZ traders, seek brokers advertising commission-free trading, they ignore other trading fees and fall victim to a cost trap. Most commission-free Forex brokers charge more per trade, which is why successful Forex traders avoid them.

What costs should traders evaluate besides commissions?

  • Spreads remain the highest cost for scalpers and day traders, and they can vary tremendously between Forex brokers.
  • Swap rates, many refer to them as hidden costs, can drastically spike trading costs for traders keeping positions open overnight.
  • Currency conversion fees can add another layer of trading costs for traders who diversify their portfolios across currencies.

Below are three trading costs examples to illustrate why successful Forex traders prefer to manage their portfolios with the best Forex brokers with low commission offers and avoid commission-free traps.

  • The first example will compare commission-based and commission-free trading costs for scalpers and day traders, who close all open positions before the daily rollover expires, at which point swap rates apply.
  • The second example adds swap rates on leveraged overnight positions for one night, which brokers charge after the rollover time expires.
  • The third example extends swap rates for traders maintaining leveraged positions for ten calendar days.

Trading Cost Example One:

Table One features a commission-free example, and Table two is a commission-free example.

Average Spread
Commission per Round Lot
Swap Long
Swap Short

Total Trading

Costs
0.0 pips
$4.00
X
X
$4.00
0.0 pips
$4.00
X
X
$4.00

Minimum Spread
Commission per Round Lot
Swap Long
Swap Short

Total Trading

Costs
0.6 pips
$0.00
X
X
$6.00
0.6 pips
$0.00
X
X
$6.00

Noteworthy:

  • The price difference per 1 standard lot is $2.00 despite commissions, which accumulates over volume and time.
  • The best Forex brokers with low commission offers also have volume-based rebate programs, which lower trading costs between 15% and 75%+, further decreasing brokerage fees and increasing trader profitability.

Trading Cost Example Two:

Table One features a commission-free example, and Table Two is a commission-free example. Both include swap rates for one calendar day.

Average Spread
Commission per Round Lot
Swap Long
Swap Short

Total Trading

Costs
0 pips
$4.00
-$3.55
X
$7.55
0 pips
$4.00
X
$0.57
$3.43

Minimum Spread
Commission per Round Lot
TSwap Long
Swap Short

Total Trading

Costs
0.6 pips
$0.00
-$12.36
X
$18.36
0.6 pips
$0.00
X
-$10.97
$16.97

Noteworthy:

  • The cost advantage for a 1 standard lot buy position is $10.82.
  • The cost advantage for a 1 standard lot sell position is $13.54.
  • Many commission-based Forex brokers offer positive swap rates on select assets, where the interest rate differential warrants it, creating honest trading conditions as dictated by financial markets

Trading Cost Example Three:

Table One features a commission-free example, and Table two is a commission-free example. Both include swap rates for ten calendar days.

Average Spread
Commission per Round Lot
Swap Long
Swap Short

Total Trading

Costs
0 pips
$4.00
-$35.45
X
$39.45
0 pips
$4.00
X
$5.70
-$1.30

Minimum Spread
Commission per Round Lot
Swap Long
Swap Short

Total Trading

Costs
0.6 pips
$0.00
-$123.64
X
$129.64
0.6 pips
$0.00
X
-$109.69
$115.69

Noteworthy:

  • The cost advantage for a 1 standard lot buy position is $90.19.
  • The cost advantage for a 1 standard lot sell position is $116.99.
  • The commission-based short trade resulted in a profit, also known as a carry trade, assuming no change in price action.
  • The carry trade was a widely used trading strategy by high-frequency and high-volume traders, usually hedge funds and institutional clients, resulting from the interest rate differentials between central banks. However, due to the post-2008 low interest rate environment, there is very little carry trading left.

MT4/MT5 traders can access swap rates from their platform by following these steps:

1. Right-click on the desired symbol in the Market Watch window and select Specification.

2. Scroll down until you see Swap Long and Swap Short.

Bottom Line

The three trading cost examples above comparing commission-based and commission-free pricing environments illustrate why traders should evaluate all applicable fees when choosing a Forex broker.

Forex traders should know, understand, and consider the following:

  • Many brokers use the term commission-free as an advertising tool, successfully so, to attract first-time traders who follow social media trends.
  • Commission-free Forex brokers sometimes apply excessive mark-ups on spreads, swaps, and currency conversion fees, eliminating any cash events resulting in profits for traders and manipulating the trading environment in their favor at the expense of traders.
  • Commission-based Forex brokers maintain lower overall trading costs and a genuine trading environment dictated by market conditions and free of manipulation.
  • Most commission-based Forex brokers offer ECN/STP/NDD execution and are not the direct counterparty of traders, eliminating conflict of interest risks, while commission-free Forex brokers often earn from losses of their clients.
  • Trading costs at commission-based brokers decrease further if a volume-based rebate program exists, which most offer.
  • Cost savings between a commission-based and a commission-free cost structure magnify with trading volume and over time.
  • Commission-based Forex brokers offer traders deeper liquidity, resulting in tighter spreads, keeping trading costs low.
  • The technology infrastructure at commission-based Forex broker remains cutting-edge to accumulate high-frequency and high-volume trading, eliminating requotes and reducing slippage.
  • Most commission-based Forex brokers have no restrictions on trading strategies, including scalping, and fully support automated trading.
  • Exceptions exist, where a commission-free broker offers rebates, but the starting point is high, diminishing the favorable impact versus a competitively priced commission-based Forex broker with a volume-based rebate program.

FAQs

Which is the cheapest Forex broker?

Final trading costs always depend on the individual Forex traders. The cheapest cost structures usually come from Forex brokers with a commission-based pricing environment, raw spreads from 0 pips, and a volume-based rebate program.

Which Forex broker takes no commission?

While most Forex brokers offer a commission-free trading account, trading costs are generally higher amid more massive markups on spreads. They also increase swap rates on leveraged overnight positions to cover the absence of trading commissions.

Which broker has the lowest spread and commission?

ECN/STP/NDD brokers usually present Forex traders with the lowest spreads and commissions. Some Forex brokers acting as market makers can compete with core costs.

Huzefa Hamid

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.