4 Best Scalping Forex Brokers in 2021

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Scalping is one of the most favored trading strategies, but not all Forex brokers allow it.  As with any trading strategy, traders need to understand what it is and how it works. See below our favorite scalping brokers.

1
FP Markets
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
2
FXTM
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
3
Eightcap
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.
Most extensive crypto derivatives offering. Choice of 250+ Crypto CFDs
Multiple funding and swift withdrawal options
Ultra-low spreads across all Crypto derivatives
4
AvaTrade
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

FP Markets

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

fpmarkets is an Australian brokerage which launched in 2005. Headquartered in Sydney, Australia’s financial capitol, they have carved out a solid niche for themselves as the best Forex / CFD broker enjoying ASIC regulation. Australian regulators are much more relaxed about leverage than their counterparts in the U.S.A., U.K., and the E.U. and so fpmarkets can offer a maximum leverage as high as 500 to 1.

For most traders, the standout unique selling point of this broker lies in the incredibly wide range of tradable assets offered, providing an opportunity to trade over ten thousand individual stocks and shares. These go beyond the typical U.S.A. and U.K. companies and include a good selection of publicly traded shares on the Hong Kong and Sydney exchanges, as you might expect from an Australasian-facing broker like fpmarkets. Also, over 60 Forex pairs and crosses, 11 equity indices, the major commodities, and 5 cryptocurrencies including Bitcoin are also on the menu here.

Unique Features

Headquarters

Australia

Regulation

CySEC, ASIC

Year Founded

2005

Type of Broker

No Dealing Desk

Minimum Deposit

$100

Maximum Leverage

1:500

Type of Platform

MetaTrader 4, MetaTrader 5, Web-based, IRESS

They offer an unusual hybrid ECN/STP execution model which means that 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.

Traders can scalp and hedge at this broker, whose fast ECN execution speed makes it a natural home for scalpers. Clients may choose between the MetaTrader 4 and MetaTrader 5 platforms, and shares can be traded through the IRESS trading platform which includes access to level 2 exchange data.

FP Markets Pros & Cons

Advantages

  • 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

Disadvantages

  • Availability of Iress geographically restricted

FP Markets is an Australian multi-asset broker with more than $1 billion in daily trading volume, serving clients from 80+ countries. Founded in 2005 in Australia, FP Markets grew into a trusted brand over the past 15+ years with more than 100 employees. The upgraded MT4/MT5 trading platforms, via the Trader Tools consisting of twelve plug-ins, present clients with a competitive edge. We have conducted an in-depth review of this CFD broker to provide traders with a complete overview of the trading environment at FP Markets.

FXTM

5.0/5 in this category
In Summary
Best all-around: high floating leverage + fast execution

We have made FXTM our top-rated broker because in addition to its lengthy track record, it enjoys a very high level of regulation and reputation, and it offers a highly competitive fee structure which tends to keep down the cost of trading.

Unique Features

Headquarters

Cyprus

Regulation

CySEC, FCA, FSC, CMA

Year Founded

2011

Type of Broker

Instant/Market Execution

Minimum Deposit

$50

Maximum Leverage

Flexible

Type of Platform

MetaTrader 4, MetaTrader 5

FXTM, or “ForexTime”, has been around for a long time: they were founded in 2011. Recent years have seen them continue to steadily expand their business, and they are well- regulated by the U.K., Cyprus, Mauritius, and South Africa. The brand is owned by private companies incorporated in the U.K., Cyprus, and Mauritius. Customers of FXTM have access to more than 57 Forex currency pairs and crosses, precious metals, the major energies, equity indices, big cryptocurrencies, and a few individual American stocks. Talking of stocks, FXTM are quite unique in the area of trading stocks, as they enable direct trading through real legal ownership, not just wrapped as CFDs like almost every other similar brokerage offers.

FXTM offers traders a choice between two of the most popular execution models: customers may open either an ECN-type account, or one that trades by “straight-through processing”. Clients have a straight choice between two trading platforms, with both MetaTrader 4 and MetaTrader 5 on offer.

Through their Mauritius regulator, FXTM offer leverage as high as 1000 to 1. In the U.K. and Cyprus, they are limited by law from offering more than 30 to 1.

If you are looking for a broker with a good copy trading program, it is worth taking a serious look at FXTM’s “FXTM Invest” copy trading program.

FXTM Pros & Cons

Advantages

  • Excellent client deposit protection

  • Low minimum deposit

  • Free MT4 add-ons and VPS hosting

  • Good educational tools

Disadvantages

  • No cryptocurrencies or exotic currencies

  • Low leverage for retail traders

  • Internal withdrawal fees and an inactivity fee

Eightcap

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

Unique Features

Headquarters

Australia

Regulation

ASIC, VFSC

Year Founded

2009

Type of Broker

None

Minimum Deposit

$100

Maximum Leverage

Maximum Leverage 1:30 (or 1:500 for non-Australia clients)

Type of Platform

MetaTrader 4, MetaTrader 5

Eightcap Pros & Cons

Advantages

  • Low minimum deposit and high leverage of up to 1:500

  • Competitive ECN cost structure

  • Excellent technology infrastructure and seasoned management team

  • Daily research and quality educational content

Disadvantages

  • Limited asset selection

AvaTrade

4.5/5 in this category
In Summary
Highly regulated, choice of fixed or floating spreads

AvaTrade was founded in 2006 in Dublin, Ireland. They are one of the largest and most famous Forex / CFD brokers in the world and became well-known for offering their clients a choice of fixed or floating spread cost of trading models. They enjoy an extremely high and strong level of regulation, making them a favorite for traders who are extremely nervous about the security of their deposit, which in Ireland can be protected by a strong investor deposit protection provision. 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’s maximum leverage offered runs as high as 400 to 1.

Unique Features

Headquarters

Ireland

Year Founded

2006

Type of Broker

ECN/STP

Minimum Deposit

$100

Maximum Leverage

1:400

Type of Platform

MetaTrader 4, MetaTrader 5, Proprietary platform, Web-based

In addition to their longevity and safe reputation, clients know that through AvaTrade they have access to a broad range of asset classes through which diversification can be achieved successfully: AvaTrade offers trading in over 55 different Forex currency pairs, 17 commodities, 20 equity indices, 14 cryptocurrencies, plus 66 individual stocks and shares. Even better, and unusually, 2 bonds and 6 ETFs are also on the menu. The diversity offered here stands out.

Whether you are located within the European Union or not, all branches of AvaTrade will offer you negative balance protection, above and beyond what is mandated by the law. This means that under no circumstances will any client of AvaTrade ever be held liable by the firm for an amount larger than their deposit.

 

AvaTrade Pros & Cons

Advantages

  • Well-regulated globally, with the Bank of Ireland, the primary regulator

  • Low minimum deposit and in-depth educational tools

  • Wide asset choice across seven sectors

  • Superior mobile trading platform

Disadvantages

  • Low leverage for retail traders

  • High quarterly inactivity fee

  • Unacceptable cost for AvaProtect

Top Scalping Forex Brokers

FP Markets, ECN trading with leverage up to 1:500.
FXTM, Best all-around: high floating leverage + fast execution.
Eightcap, Competitive pricing + excellent daily videos.
AvaTrade, Highly regulated, choice of fixed or floating spreads.

What is Scalping?

Scalpers, as traders are known who use scalping as their preferred trading strategy, favor large trading volumes and minor price movements. While the basic principle of scalping remains simple, implementing it is far from easy. Many new retail traders attempt to scalp the Forex market, as capturing a minor price move, sometimes as little as 1.0 pips or less, in theory, requires less of an effort than maintaining a low-volume trade over a prolonged period. Scalping remains the shortest form of short-term trading, and those who utilize it successfully can reap the benefits of it daily, adding to its growing popularity.

While all traders must practice discipline, scalpers require it even more. One of the most defining aspects of Forex scalping is psychology. Many new traders overlook it, as scalpers maintain positions for a short period and might place hundreds of trades daily, but unless a trader masters the psychology of trading, each strategy, including scalping, will fail. Scalping Forex pairs can also be one of the most exciting and rewarding ways to trade, but it also carries higher risk. Most associate the added risk to leverage, which is an incorrect assessment. Traders who wish to learn how to scalp successfully must learn how to accept losses. Scalpers rely on trading volume, trading frequency and leverage. Therefore, there can be hundreds of small profits and losses throughout the trading session. Executing any scalping strategy with the wrong type of broker is as devastating as not knowing how to scalp.

Scalping refers to placing high volume trades to profit from small price movements. Scalpers often conduct dozens or hundreds of transactions per day and require tight spreads, maximum leverage and excellent liquidity. A Forex scalping strategy is the highest-volume trading strategy available, and many scalpers seek a broker with a cash rebate program to boost their revenue stream. Small profits can add up to a respectable amount at the end of the trading session, but scalpers must strictly follow an exit strategy to avoid one loss from wiping out a series of minor profits. Usually, scalpers close all positions at the end of the trading day and avoid unexpected price spikes and swap rates on leveraged overnight positions. Trading psychology and precise entry levels represent essential tools for successful scalpers, who rely exclusively on technical analyses and prefer high-volume fundamental events due to the liquidity spike that surrounds them. The most sophisticated scalpers will use automated trading solutions and expert advisors (EAs) in the MT4 and MT5 trading platforms. Scalpers prefer to trade liquid major currency pairs while avoiding more illiquid minors and exotics.

The Risks of Scalping in Trading Forex

Psychology and discipline remain two primary risks for scalpers. Since scalping Forex involves placing hundreds of trades daily, there will be many small profits and losses. Scalpers must follow their strategy precisely while also understanding when to make swift adjustments to dynamic market conditions. Learning how to accept losses remains paramount to earn profits, especially as a scalper. Allowing a losing position to run can swiftly wipe out a daily profit and lead to more errors. The longer a scalper holds a trade, the greater the chances it will become unprofitable. Scalping from an insufficiently funded trading account is another risk, especially for new traders.

The Best Times for Forex Scalping

Since scalpers require liquidity and prefer volatility, scalping just before and after economic data announcements is one of the best times for Forex scalping. The first hour of the London trading session is another one, together with the first hour of the New York session, and the last hours of official trading in London and New York, respectively. It also depends on the currency pair, with Japanese yen traders showing activity during the first and last hour of the Tokyo trading day.

Why Should You Select a Broker Who Allows Scalping?

Many of the brokers that allow scalping have the necessary infrastructure in place to enable a profitable Forex scalping strategy. While the MT4, MT5, or cTrader trading platform, all of which support automated trading strategies, are available at most brokers, scalpers must consider liquidity, execution, and costs. Another reason to select a broker that allows scalping is to ensure that traders do not violate the terms and conditions of the client-broker agreement. Violations can result in the loss of accumulated profits, a warning, and ultimately the return of the initial deposit together with the closing of the account. Therefore, traders interested in scalping must read the terms and conditions. Usually, a reference to scalping or trading strategy restrictions is available. Should it be missing, customer support can clarify the position of the broker regarding scalping.

The Regulations Concerning Scalping

Most global regulators leave the applicable rules up to brokers, but the US Securities and Exchange Commission (SEC) prevents traders with less than $25,000 in capital executing a scalping strategy. It falls in the category of pattern day trading, and those in violation of it will have their account suspended until raising the equity threshold to satisfy the requirement. The $25,000 rule applies to US equity markets only. Futures and Forex traders do not face it, leaving it up to individual brokers to set rules and regulations.

Broker Policy Towards Scalping

Each broker maintains terms and conditions, where traders can locate the policy towards scalping. Given the popularity of Forex scalping, many brokers answer the question directly in their FAQ section. Always make sure to scalp with a broker that allows it, and while many place no restrictions on it to attract more traders, the cost structure discourages it. Others may implement restrictions on the number of allowed trades per day, open positions, or total lot size, all of which can negatively impact scalpers.

Is the Scalping Broker Using an ECN Platform?

Usually, ECN brokers permit Forex scalping as they are not the counterparty to client positions and charge a commission per transaction. Unlike market makers, who are the counterparty with direct exposure to client profits and losses, ECN brokers have none. Therefore, the higher the trading volume, the higher the revenues for ECN brokers. It also ensures top-tier liquidity and access to raw spreads, a requirement to scalp consistently with a profit. The technology infrastructure also remains superior, resulting in competitive trade execution and price improvements.

Terms & Conditions of the Scalping Broker

Besides confirmation regarding the policy on scalping as a trading strategy, traders should also familiarize themselves with the cost structure which includes both commissions and other fees. Traders must read the fine print and, if in doubt, reach out to customer support. The terms and conditions will outline any restrictions, if not directly for scalpers, indirectly on other aspects required to execute a scalping strategy. While most ECN brokers allow scalping, most market makers do not, and there are always exceptions. Trading with a broker that does not allow it will result in financial losses and other complications, which traders can avoid by reading the terms and conditions carefully and understanding them.

Funding & Withdrawal Methods of Scalping Brokers

Since scalpers generate profits and losses daily, they often conduct more financial transactions to withdraw and protect their capital. It can result in an increase in costs, which will lower the overall profitability. Most brokers do not charge for deposits, but withdrawal fees can apply, depending on the preferred payment processor. External costs, dependent on the same, can also exist. Therefore, scalpers must consider the funding and withdrawal options of scalping brokers to ensure a cost-effective structure exists. Online payment processors often provide a significant advantage, and some brokers grant low-cost debit cards as an alternative, restricted by geographic location.

Scalping Brokers' Customer Support

While most traders do not require customer support, the high-frequency nature of scalpers may result in more assistance. Trading with a broker that offers easy access to a representative and features swift response times via live chat or phone is beneficial. Since the majority of scalpers close all positions at the end of the official trading day, 24/5 or 25/7 assistance is not a requirement.

Technical Tools for Scalping Traders

Manually scalping the Forex market is how the bulk of scalpers initially learn how to scalp. Given the fast pace of scalping strategies, more sophisticated traders deploy automated solutions. Since MT4, MT5, and cTrader fully support automated trading strategies, they are ideal for scalpers, and the marketplace includes Forex scalping software for a one-time purchase or a recurring license. One example of an automated system is Trade Scalper, which identifies entry and exit points for positions. It is not available on MT4, MT5, or cTrader, but developed for independent NinjaTrader.

There are similar and more advanced solutions for MT4, where scalpers may obtain a fully automated system, which can trade without the presence or interference of traders. While it sounds appealing to have a set-and-forget system, it can also be dangerous. Traders should never use one without learning how to trust it by monitoring the automated trading solutions over an extended period. It remains an evolving and fast-growing industry, but scalpers must implement safeguards and exercise patience. With many options and technical tools available, ignoring the free ones and the cheap ones can eliminate unprofitable ones. Traders should also consider the costs of the automated solution and determine if their portfolio can generate enough profits to make it an economical choice. The most sophisticated systems rely on machine learning (MM) and artificial intelligence (AI), but access remains limited to FinTech companies and quantitative hedge funds.

Scalping with Tight Spreads

Tight spreads are one requirement for scalping Forex. The smaller the mark-up, the greater the profit. It also requires less of a price action move to turn a profit. Since trading costs remain the primary cost for scalpers, the more calculated they are, the better a Forex scalping strategy can perform. The most favored structure is a competitive commission with raw spreads, which many brokers provide together with a volume-based rebate program, combining for an ideal set-up for scalpers to thrive.

Best Forex Pairs for Scalping

Since liquidity is another core element of a successful Forex scalping strategy, the best Forex pairs for scalping consist of major currency pairs. They include the EUR/USD, GBP/USD, USD/JPY, USD/CHF, USD/CAD, AUD/USD, NZD/USD, together with the EUR/GBP, EUR/JPY, and EUR/CHF. They are usually the ones with the tightest spreads, highest trading volume and deepest liquidity.

Scalping and Leverage

The final defining aspect of a Forex scalping strategy is leverage. Many traders, including professionals, fund managers and regulators, confuse it with risk. It remains incorrectly linked to trading losses, which is misleading, as the absence of risk management results in trading losses. Scalpers require maximum leverage to lower the margin requirement on each trade and boost its profit potential. Since scalpers seek short-term positions and multiple small profits throughout the trading session, each magnification adds up to a potentially significant profit or loss.

Scalping vs. Swing Trading: What's the Difference?

Scalping focuses on hundreds of small daily trades, lasting a few seconds to several minutes, and never overnight. It remains the shortest form of short-term trading. Swing trading can last multiple days and up to several weeks, attempting to capture medium-term reversals. Both strategies rely on technical analysis for entry and exit points while monitoring fundamental events as triggers for trend reversals or liquidity aggregators.

How Forex Brokers Define Scalping

How a broker defines scalping is also very important, because what will or will not be allowed at different brokers allowing “scalping” will often be a little different. Each broker will set its own guidelines and rules and will implement them accordingly. The general definition of scalping is a strategy that involves placing a large number of trades and holding them open only for short periods of time before closing them, in an attempt to profit from small price movements. This process may be repeated by a scalping trader dozens or even hundreds of times throughout a single trading day.

It is therefore your job to identify exactly how the broker you have chosen defines ‘scalping’ and whether this will affect your own individual scalping strategy. For example, pay attention to the finer details in the small print such as the amount of trades you can place daily, and whether there is a time limit to how long you may stay in these trades before you will be required to close them.

It is very common for brokers to differ on these definitions of what exactly scalping is, so it is well worth your while ironing out the fine details before you begin to try to trade with them in a scalping style. The last thing you want is to have the hassle of having your trading account closed and deposit refunded due to a breach of rules you were not aware of.

Final Thoughts

We have shown how tight spreads, speed and reliability of execution, the precise definition of scalping, choice of Forex pairs to trade, and the use of leverage and its maximum will have a big impact in determining your performance as a scalper.

While all of the above issues are very important, it is difficult to say which one you should focus on most. When choosing which Forex broker is best for scalping you really want to choose a broker that scores highly in all these areas issues to match your requirements.

Which factors you make a priority will depend on your own individual scalping style. Don’t forget you need to be sure that your deposit is safe with any broker. If a broker isn’t reliable and well regulated, all the other factors can become irrelevant.

It is a good idea to open a demo account with your broker of choice. This will not only provide you with an insight into what they offer, it will also give you a feel for their trading platform and spreads and commission structure – but remember, a live “real money” account does not always precisely mirror the performance of a demo account.

FAQs

Which Forex broker is best for scalping?

Any broker providing tight spreads with competitive commissions, high leverage with excellent execution statistics, and an ECN execution model with a volume-based rebate program will rank among the best for scalping.

Is scalping allowed in Forex?

Yes, scalping is allowed and legal, but not all Forex brokers allow it, and many who do discourage it via an uncompetitive cost structure.

Which Forex broker has the best spreads?

ECN Forex brokers will have the best spreads together with a commission, but some market makers offer an acceptable alternative.

Is scalping better than day trading?

It always depends on the trader and the details of the trading strategy. There is no strategy better than another one, but one may be superior over another specific to the individual trader.

Is scalping a good strategy?

Scalping is as good as any strategy, while it remains one of the most exciting ones due to the short time frames. It can also be the most demanding and frustrating one and best executed with the assistance of automated trading solutions.

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.