The Forex market attracts thousands of new traders around the world every day. One of the most critical requirements for a successful trading career is trading with one of the many regulated Forex brokers.
High level regulation in multiple jurisdictions
Impressive range of tradeable assets including vanilla options and gold options
High floating leverage + fast execution
Daily market research and Autochartist access
CFD service 72% lose money
Best platform for new Forex traders
CFD service 72% lose money
Marketsi strategy builder helps traders trade smarter
Competitive trade execution with low slippage
, Highly regulated, choice of fixed or floating spreads.
, Best all-around: high floating leverage + fast execution.
, ECN trading with leverage up to 1:500.
, Wide range of CFDs + trailing stop losses.
5.0/5 in this category
Highly regulated, choice of fixed or floating spreads
AvaTrade remains one of the best-regulated Forex brokers in 2021, with primary oversight by the Bank of Ireland. Additional jurisdictions consist of the ASIC in Australia, the FSA in Japan, the FSCA in South Africa, the FSC in the British Virgin Islands, the FSRA in Abu Dhabi, and the IIROC in Canada. Established in 2006, over 300,000 clients trust AvaTrade and its clean regulatory track record with all authorities. It provides 24/7 customer support in 14 languages, maintains a commission-free trading environment, and a competitive asset selection above 1,250 CFDs and options contracts. AvaTrade is known for trust and transparency and continues to increase its market share. Traders with a deposit above $1,000 qualify for a $200 bonus, but only from operating entities in regulatory jurisdiction that permits bonus campaigns.
New retail traders have access to one of the most well-thought-through educational offerings via the spun-out SharpTrader. It is a trading academy with more than 40 lessons and 200 videos. AvaTrade provides traders with the core MT4 and MT5 trading platforms, equipped for automated trading. Manual traders may prefer the proprietary WebTrader. Mobile traders have a superior choice with AvaTradeGO, and options traders benefit from AvaOptions. AvaTrade supports social trading via DupliTrade, ZuluTrade and MQL5 Signal Service. Clients have increased cost control due to a choice between fixed and floating spreads. The above-average cost structure at AvaTrade remains acceptable amid the overall product and services portfolio.
5.0/5 in this category
Best all-around: high floating leverage + fast execution
FXTM is another superior choice for traders seeking one of the best-regulated Forex brokers in 2021. With its primary regulator, the FSC in Mauritius, FXTM has subsidiaries authorized by the FCA in the UK and the CySEC in Cyprus. Adding to the trustworthy and honest trading environment are excellent execution statistics, including order execution speed, slippage, and requotes. Big Four accountancy PricewaterhouseCoopers Limited (PwC) confirms them, and they point towards an outstanding technology infrastructure available at FXTM. It makes it a premier choice for scalpers, and FXTM enjoys a leadership position in emerging and frontier markets, where it offers domestic payment options. A total of 47 ensure many of its 2,000,000 traders have one suitable in their local currency.
The minimum deposit of just $10 allows all traders to implement a suitable portfolio building deposit strategy, boosted by the 30% deposit bonus up to $250. There are no restrictions on trading strategies, and FXTM grants maximum leverage of 1:2000. One of the most notable advantages is the excellent pricing environment at FXTM. The ECN account grants access to a minimum spread of 0.1 pips for a commission of $4.00 per round lot. The Loyalty Program, limited to $10,000, further lowers trading costs. Six add-ons improve the sub-standard out-of-the-box MT4/MT5 trading platforms, and FXTM Trader presents an advanced mobile trading platform. FXTM Invest supports retail account management, and the FXTM Pivot Point Strategy assists manual traders. New traders will benefit from the research and education provided by FXTM. The total asset selection remains the sole drawback.
5.0/5 in this category
ECN trading with leverage up to 1:500
FP Markets remains one of the best-regulated Forex brokers in 2021 out of highly competitive Australia, where the ASIC maintains a business and trader friendly environment. It does not extend to the CySEC-regulated entity in Cyprus, where the ESMA places clients at a distinct disadvantage. The asset selection exceeds 10,000 but is only available in the proprietary Iress trading platform. Regrettably, access remains restricted by the geographical location of clients. The MT4 and MT5 trading platforms provide significantly less trading choices, but FP Markets provides twelve upgrades to the below-average core versions, ensuring traders have competitive trading platforms. The execution speed below 40 milliseconds and maximum leverage of 1:500 make it an excellent choice for automated trading solutions and scalpers.
Traders enjoy a no dealing desk (NDD) execution model and no restrictions on trading strategies. The cost structure includes raw spreads of 0.0 pips for a commission of $6.00 per round lot, making it among the most competitive online Forex brokers. VPS hosting is another tool for automated trading solutions, Autochartist supports manual traders, and retail account management is available via MAM/PAMM accounts. Myfxbook AutoTrade caters to social trading, as FP Markets provides tools for all traders. Most global traders should note that they will trade with the unregulated international business company (IBC) registered with St. Vincent and the Grenadines Financial Services Authority (FSA).
4.5/5 in this category
Wide range of CFDs + trailing stop losses
Plus500 has a clean regulatory track record since 2017 but incurred a fine from the FCA in the UK in 2012 for not reporting transactions accurately for more than 18 months. In 2017 it misled investors about its exposure to client portfolios. Over the past three years, Plus500 improved its image, primarily attributed to its 2018 initial public offering (IPO) on the London Stock Exchange (LSE). It maintains an excellent regulatory environment provided by the FCA in the UK, the CySEC in Cyprus, the ASIC in Australia, the FMA in New Zealand, the FSCA in South Africa, the FSA in Seychelles, and the MAS in Singapore. Plus500 provides traders with more than 2,800 assets, including nearly 900 options contracts, in a commission-free trading environment.
Mobile traders, which account for over 40% of transactions at Plus500, will enjoy the mobile trading app with over 10,000,000 installations on Android devices. Unfortunately, Plus500 only maintains its below-average proprietary trading platform, available as a desktop client, webtrader and mobile app. It lacks core trading functions and does not support automated and social trading. Plus500 ignores the trading needs of most advanced clients. Research is not available and only limited, low-quality educational content inspired by marketing is provided. Plus500 is one of the regulated Forex brokers that suits traders seeking an execution-only service. The products and services portfolio remains uncompetitive, but manual traders seeking an excellent asset mix may consider Plus500 if they have access to third-party trading tools. Despite being operational since 2008, it is home to just over 200,000 traders.
4.5/5 in this category
Excellent educational offerings
Markets.com caters to investors via its Marketsi unit and to traders through the Marketsx division. It remains one of the best-regulated Forex brokers, operating out of the UK with the FCA as its primary regulatory authority. Completing the global framework is the CySEC in Cyprus, the ASIC in Australia, the FSC in the British Virgin Islands, and the FSCA in South Africa. It maintains an excellent asset selection above 3,600 with a competitive mix suitable for all types of client requirements. Safecap Investments Limited, the corporate owner of Markets.com, is a publicly listed company in the UK and a constituent of the FTSE 250 Index. Therefore, it complies with strict capital requirements and adheres to best business practices. Together with its clean regulatory track record, Markets.com remains one of the best choices for multi-asset traders.
The commission-free trading environment is one of the most competitive ones among all online brokers.The commission costs for CFD trading are average. Per the latest data available from 2019, 86% of all placed orders faced zero or positive slippage, confirming superior technology infrastructure that increases client profitability. Non-EU traders enjoy maximum leverage of 1:300, but a minimum deposit of $250 exists. The core MT4/MT5 trading platforms support automated traders, while eleven excellent trading tools enhance the overall trading experience at Markets.com. Two proprietary trading platforms offer manual traders an attractive alternative. The personalized financial live-stream service XRay further sets this broker apart from most competitors.
With daily turnover approaching $7 trillion, the low capital requirements to start a portfolio and high leverage combine with countless trading opportunities that drive demand. Many professional firms and multi-national companies deal with Forex every day, and retail traders remain indirectly exposed in numerous ways. A rapidly rising number of them show interest in the attractiveness of Forex trading. They open new online Forex broker trading accounts to get access to the fast-moving market, keeping demand for trading services elevated.
One of the most critical requirements for a successful trading career is trading with one of the many regulated Forex brokers. I cannot stress the significance of it enough. Never deposit with an unregulated Forex broker, regardless of how attractive an offer they make. The negatives outweigh any short-term positive marketing-related push. One of the worst nightmares of profitable Forex traders is the inability to withdraw their earned capital because their unregulated Forex broker does not honor it. Therefore, traders must ignore any offers from unregulated sources and pay attention to competitive trading environments maintained by regulated Forex brokers.
Not all regulators are the same, and trading from the proper jurisdiction provides a competitive edge. The UK was home to the best regulatory trading environment maintained by the Financial Conduct Authority (FCA). It changed following counter-productive regulatory changes by the European Securities and Markets Authority (ESMA). It made EU-based Forex brokers the least competitive globally. With the Brexit transition period ending at 23:00 on December 31st, 2020, European Central Time (ECT), the UK financial sector is expected to make changes and return to its previous glory. London remains the financial center of the world and is ideally positioned to expand its leadership position. UK Forex brokers have always been among the industry leaders. Australia offers Forex traders another excellent and competitive trading environment. The Australian Securities and Investments Commission (ASIC) ensures one of the best regulatory jurisdictions. Since former hotspot Cyprus and the Cyprus Securities and Exchange Commission (CySEC) fall under ESMA jurisdiction, one exciting regulatory environment to monitor is South Africa and the Financial Sector Conduct Authority (FSCA). South Africa shares the same time zone as Cyprus, is an English-speaking country and a G-20 member.
Forex regulation is a set of rules by an authority with enforcement powers that ensures brokers treat customers fairly. It also enables the financial health and stability of the system and provides dispute resolution. In some cases, an investor compensation fund in case of bankruptcy by a broker exists. Not all regulators grant equal protection and enforcement, and some maintain an uncompetitive trading environment like the ESMA, which applies to all EU-based brokers. I highly recommend that traders always trade with one of the thousands of regulated Forex brokers. While it cannot guarantee against fraud and malpractice, as well-documented cases in the US and Cyprus have shown, it offers a layer of protection and security that traders should demand from their brokers. Traders should seek a minimum of five years under a well-regulated environment and must also check the track record. Many brokers faced fines but continue to cater to clients. It shows that an attempt to take advantage of unknown retail traders was made, but the regulator caught them.
Most traders conduct some research and due diligence to identify a trustworthy Forex broker and often follow the best-marketed one or the one with the most appealing offer, usually in the form of bonuses and promotions. While the majority of brokers and all traders hope for the best outcome, issues may arise. They do not necessarily originate from malpractice, but a technological glitch, communication error, administrative backlog, or a third-party mistake may occur. Trading with a regulated broker provides traders access to a qualified team to resolve those issues. Regulated Forex brokers must adhere to financial regulations and maintain a certain amount of capital reserves before receiving a license to operate. Frequent audits ensure that client deposits and earnings reflect the accurate value, and regulated Forex brokers must segregate client funds from corporate ones. The processing times of financial transaction is faster and more transparent. It also enforces the protection of information provided by traders during the registration process.
Regulated Forex brokers must satisfy know-your-client (KYC) and anti-money laundering (AML) stipulations, adding another layer of security. A compensation fund protects against any unexpected financial failure of the broker, which remains dependent on the jurisdiction. Some take out additional insurance protection or apply for membership with the Hong-Kong-based Financial Commission, an independent self-regulatory organization and external dispute resolution (EDR) body focused on the Forex market. The Compensation Fund provides coverage for traders up to €20,000 per case if the broker defrauded traders. It emerged as a favorite to many regulators. It enables brokers to register in business-friendly jurisdictions while offering superior protection. Regulated Forex brokers also process withdrawals swiftly, act in the best interest of clients, and stay clear of manipulating prices or stop-loss hunting. An ECN execution model generally provides more safety than a market maker model. The broker is not the counterparty and receives compensation via volume-based commissions rather than a mark-up on spreads and client losses.
All countries have a financial regulator, but there are several major regulatory bodies for the Forex market with a distinct cluster of brokers. Below is a list of the most dominant ones for Forex traders to be familiar with and to recognize:
- Australia - Australian Securities and Investments Commission (ASIC): A member of the UK Commonwealth of Nations, Australia quietly grew into another Forex hotspot with excellent and competitive regulation.
- Belize - International Financial Services Commission (IFSC): The IFSC is another trusted regulator that offers excellent trading conditions and serves as a significant Forex broker location, especially for Latin American expansion.
- Canada – Investment Industry Regulatory Organization of Canada (IIROC): At a federal level, IIROC oversees Forex regulation in Canada, with a legal duty to supervise and regulate investment dealers although the provinces have their own localized regulations. The IIROC has a reputation of a strict regulator – many analysts would say overly strict, although Canadian residents are certainly well protected. In any case, much of the overly harsh Canadian regulation is imposed at provincial level, especially in Alberta.
- Cyprus - Cyprus Securities and Exchange Commission (CySEC): A former haven for Forex brokers, the ESMA turned it into the least competitive and most recognized Forex regulator. Numerous high-level scams operated under its oversight.
- Dubai - Dubai Financial Services Authority (DFSA): Regional traders, thanks to the DFSA, have a secure and competitive trading environment. Dubai is the financial service center of the Middle East, gaining traction among Forex brokers.
- Mauritius - Financial Services Commission (FSC): Another well-known regulator with a business-friendly environment preferred by many Forex brokers.
- Seychelles - Financial Services Authority (FSA): The FSA maintains an offshore center for many financial firms. It remains a top location for Forex brokers with an active regulator.
- Singapore - Monetary Authority of Singapore (MAS): Singapore remains an excellent gateway to Asia, is a growing Asian financial hub, and an attractive destination for Asian-focused international Forex brokers.
- South Africa - Financial Sector Conduct Authority (FSCA): An up-and-coming regulator set to benefit from missteps by the EU.
- Switzerland - Swiss Financial Market Supervisory Authority (FINMA): The global banking center provides well-trusted regulatory oversight with a forward-thinking approach.
- UK - Financial Conduct Authority (FCA): The FCA remains the best overall financial regulator globally. Many of the best-regulated Forex brokers operate under its jurisdiction. Following Brexit, the competitiveness the UK lost under the ESMA will return and enable UK-based brokers to increase their market share further.
- US - Commodity Futures Trading Commission (CFTC): Three of the most significant brokerage frauds occurred under its oversight over the past decade. This regulator cripples financial innovation, and US traders operate under the least competitive framework.
The above listing includes the most prominent national regulatory bodies. The reader is encouraged to explore our detailed listing of financial regulatory bodies for each country set out in alphabetic order.
Forex regulations protect traders by ensuring that brokers segregate client deposits from corporate funds. They also provide an enforcement mechanism against broker fraud, police the financial sector, and issue warnings. Traders can check their websites and databases to retrieve information about brokers. Regulators require brokers to submit trade execution and financial data and command minimum capital requirements before granting an operating license. Some regulations remain counter-productive, like the ill-advised ESMA crackdown on leverage and bonuses, but traders should never trade with an unregulated Forex broker. Trading with uncompetitive EU-based brokers can harm profitability and limit competitiveness, but there are many viable options. I urge all traders to conduct their due diligence and select any of the regulated Forex brokers in competitive jurisdictions with a clean track record.
Is Forex trading regulated?
Most Forex trading remains unregulated in the over the counter (OTC) market, but all trustworthy Forex brokers maintain regulation. Traders should never trade with unregulated Forex brokers, regardless of the offer they receive.
What does a regulated broker mean?
A regulated broker satisfied requirements by the supervising authority to receive an operating license. It includes financial stability, staff training, support infrastructure, risk management, and compliance.
Are Forex brokers regulated?
Many Forex brokers have an operating license from one or multiple regulators, but numerous brokers operate as unregulated entities, including subsidiaries, from well-known brokers.
How are brokers regulated?
The level of regulation depends on the authority. Not all regulated Forex brokers provide the protection and security that traders believe. Some rules and stipulations render the trading environment uncompetitive. Others do not enforce regulations or punish violations. I recommend trading with a broker operating under the oversight of the regulatory bodies mentioned above.
Do I need a license to trade Forex?
No, a license for individual traders who manage their capital in their portfolios does not exist. Some brokers will demand traders fill out a questionnaire to determine if they are fit to trade. Several countries ban retail Forex trading, and traders should consult legal advice if in doubt.
Can I trade Forex without a broker?
Yes, it is possible to trade Forex via a bank, exchange office, or peer-to-peer. Trading via an online Forex broker is more convenient and efficient.
How do I know if my broker is regulated?
Each broker provides its regulatory information at the bottom of their homepage. Traders can confirm it by checking the license number against the database of the issuing regulatory authority.