Best us forex broker 2021

Each broker on this list has been put through our rigorous review process and meets our high standards.

Free forex bonuses

The Best US Forex Brokers for 2021, best us forex broker 2021.

Whilst this list may be short, you can rest assured that all of these US forex brokers are properly licensed too, allowing you to trade in a safe and fair environment. If a broker wants to offer its services to clients in the USA, it must obtain a license from the national futures association (NFA). This isn’t quite as straightforward as it is in other areas of the world.

The best US forex brokers for 2021

Finding great forex brokers in the USA is slightly more difficult than in the rest of the world. This is because, as the united states imposes very strict regulations on forex brokers, there are simply fewer firms offering their services to US clients.

Luckily, we’re here to help. To save you time and money, our experts have provided you with a list of the very best forex brokers in the USA.

Each broker on this list has been put through our rigorous review process and meets our high standards. Whilst this list may be short, you can rest assured that all of these US forex brokers are properly licensed too, allowing you to trade in a safe and fair environment.

On this page, you can also learn more about trading forex in the US, including:

How the US forex market is regulated

What you will need to sign up to a US forex broker

Why trading with a US broker is better than with an offshore broker

Our list of the best forex brokers in USA are:

Best and most trusted forex brokers in january 2021

How we find the best US forex brokers for you

We know that choosing a forex broker in the USA can be challenging. You want to find a reputable brand that meets all regulatory requirements the united states imposes, but which also offers value for money. The good news is we’ve done all the hard work for you.

Our precise methodology allows us to bring you the best US forex brokers with ease. Our team evaluates each broker against 200 different criteria points in 10 key areas. This includes everything from licenses to customer support options, trading fees to mobile compatibility.

Each category is weighted differently to ensure that our final score reflects the most important things to you as an american trader. For example, as licensing and regulation is a critical category, it makes up 18% of the final score. Paired with reputation, which is also given a higher weighting than other areas, this makes it impossible for unlicensed, rogue US forex brokers to make our list.

Our forex broker review team also checks for various features which appeal specifically to US traders, such as:

Regulation – A broker working with US citizens must be registered with the CTFC and NFA, even if the firm isn’t located in the united states. We check every broker to make sure they have these licenses.

Proprietary trading platforms – some US regulations, such as anti-hedging laws and the ‘first in, first out’ rule, make some trading platforms inappropriate for US traders. We check to make sure that the firm offers a user-friendly, high-quality alternative.

Localized payment methods – A deposit or withdrawal made via an american payment method will be both faster and cheaper for you. All of our recommended USA forex brokers accept convenient payment methods ranging from amex credit/debit cards to paypal.

Attractive spreads on USD currency pairs – we understand that you may be more comfortable trading what’s familiar, which is why we look for brokers who offer good spreads on USD currency pairs. This not only includes major pairs but exotic pairs that are important to the US economy, such as USD/MXN and USD/CNY, too.

US stocks, indices, and more – aside from USD currency pairs, there’s a whole range of other assets that are particularly interesting to american traders. This includes stocks from big US-based companies, such as apple and walmart, US indices, such as dow 30 and NASDAQ 100, and commodities such as crude oil and soybeans.

How is the US forex market regulated?

As a forex trader in the USA, you are protected by two different regulatory bodies. All american forex brokers must have a futures commission merchant (FCM) license, as well as a retail foreign exchange dealer (RFED) license. These licenses are issued by the commodity futures trading commission (CFTC). Licensed brokers must also be members of the national futures association.

The CTFC

The CFTC is an independent US regulatory authority that regulates the financial markets for futures contracts, which include commodities and swaps. Founded in 1974, the CFTC’s mission is to ensure a competitive and transparent market that is financially stable. The commission protects consumers and the US economy’s integrity by mitigating a wide range of risks.

The NFA

The NFA is an independent regulatory authority that specifically targets the US futures and derivatives markets. The NFA ensures the derivatives markets’ integrity while protecting investors and enforcing regulatory obligations on members.

The NFA also deals with registration, compliance, and arbitration. The association also fights against abuse and fraud in the futures markets by imposing registration conditions, compliance regulations, rigorous enforcement, and constant monitoring of the market.

As any forex brokers wishing to serve US traders must be registered with these two organizations, even if the firm is not physically located in the united states, you can rest assured that all of our recommended USA forex brokers are completely safe and secure.

The dodd-frank act and forex

All USA forex brokers are also subject to the dodd-frank act wall street reform and consumer protection act (2010). This law was introduced to avoid another financial crisis like the one that occurred in 2007-2008.

The dodd-frank act protects both sides of the industry, impacting how forex brokers can operate in the USA as well as how you can trade.

Since the act was introduced, several key provisions have been developed. Below you can learn more about each rule and the purpose it serves.

Provisions for forex brokers

USA forex brokers must meet minimum capital requirements
forex brokers in the USA must have a minimum capital of $20 million, plus 5% of any amount exceeding liabilities of $10 million to forex clients. This ensures scams won’t happen and limits the chance of a broker going bust. However, it also makes it difficult for startup firms to exist and limits competition, which could become an issue.

Forex brokers must collect security deposits
on short forex options, the notional value of the transaction along with the premium must be kept as a security deposit. On long forex options, the whole option premium is required.

Brokers must hold money in specific accounts
the NFA also states that any money the forex broker owes US forex traders should be kept only in qualifying organizations in the united states or countries deemed money centers.

Provisions for forex traders

Traders are subject to maximum leverage limits
as an american forex trader, you will be restricted to a maximum leverage of 50:1 for major currency pairs and 20:1 on minor currency pairs.

Traders must observe the FIFO rule
the first in, first out (FIFO) rule states that a trader must close their oldest position first when they hold multiple positions in the same asset. For example, let’s say you open one long position of 10,000 units of EUR/USD at 1.0810 and then another two at 1.0820 and at 1.0830 respectively. If you notice the EUR/USD drop to 1.0825, you might want to close out the lot you opened at 1.0830 to minimize losses.
According to the FIFO rule, you can’t. You can only close the position you opened at 1.0810 because it was the first one you opened. This also applies to positions that differ in size.

It should be noted that not everyone is subject to the protections of these regulations. Customers are defined as most small businesses and individuals with assets that do not exceed $10 million. An individual with a higher net worth might not be covered.

Why are there so few US forex brokers?

As you can see, our list of the best USA forex brokers is relatively short. This might cause you to worry that trading forex is prohibited in the united states but, fear not, it’s perfectly legal.

So why, if forex trading is legal and safe in the US, why are there so few forex brokers who offer their services to american traders?

The US forex market is heavily regulated

If a broker wants to offer its services to clients in the USA, it must obtain a license from the national futures association (NFA). This isn’t quite as straightforward as it is in other areas of the world.

For instance, to obtain a cysec license, a broker has to have between $100,00 and $500,000 of locked capital. In the US, however, a broker needs at least $20 million. This fee makes it extremely hard for new brokers to enter the market.

It’s difficult to become profitable

Under the rules of the NFA, brokers in america are only allowed to offer certain leverage ratios, namely 50:1 on major currency pairs and 20:1 on all other currency pairs. This cuts into the profit a forex broker in the USA can make.

Wages are also high in the US, which means they must pay more to run their brokerage. Many forex brokers, therefore, don’t consider the US market to be worth the hassle.

What you will need to become a US forex trader

To open a live trading account with a forex broker in the USA, you will need to meet some initial requirements and provide some personal information. Luckily, at all of our recommended broker sites, the process is straightforward.

To make signing up with a US forex broker as easy as possible, our experts have created a complete list of everything you’ll need:

Aged 18 or over

United states legal residency

Social security number

Personal information; name, address, date of birth, phone number, email

Employment details; employment status, job title, salary figure, name of employer and employer’s contact information

Financial details; estimated net worth, source of income

Forex knowledge; you will be asked a series of questions about forex trading, as well as questions about your trading experience and aims

Once you’ve completed the sign-up process, you’ll also need to verify your account. To do this you’ll need to provide proof of address and proof of identity. As proof of address, many forex brokers in the USA will accept a recent utility bill or bank statement. Your proof of identity can be in the form of a driver’s license, passport or official ID card.

Some brokers might also require information on your bank or third-party broker account numbers for funding purposes, plus routing numbers if you will be making a deposit by check. Note that US regulations prohibit the use of a credit card to fund a forex trading account.

Once you’ve answered the questions and submitted the necessary documentation, if everything checks out, the USA forex broker will open your account. You will then be able to fund it and start trading.

Some forex brokers accepting US traders will also impose restrictions on how much you can deposit. For example, you might be limited to depositing a maximum of 50% of your net worth.

USA forex brokers vs other forex brokers

Forex brokers in the USA offer you a whole host of benefits compared to offshore brokers. These firms do, however, also have some limitations.

In our opinion the advantages of working with a US forex broker outweigh the disadvantages but, to allow you to make your own informed decision, we’ve listed both sides of the argument below.

The benefits of US forex brokers

Here are some of the benefits of working with forex brokers in the USA:

As all forex brokers working with US traders must be registered with the NFA, you can be certain that your funds are safe. You also have an avenue to resolve any disputes with the broker through arbitration.

US forex brokers are very unlikely to be unable to cover their obligations to you because of the significant capital requirements.

The capital requirements also prevent unscrupulous operators from setting up shop in the united states.

A USA forex broker has to report to the NFA weekly, which means that their operations are transparent. These firms are also subject to comprehensive audits every year.

The NFA requires forex brokers in the USA to have licensed and specially trained employees, so you have access to great account managers and customer service advisors.

The limitations of USA forex brokers

Trading with a US forex broker means you are completely safe and protected. You will, however, discover these brokers have some limitations:

Trading with a forex broker in the USA means that you are subject to leverage limitations. The dodd-frank act imposes a maximum leverage of 50:1 for major currency pairs and 20:1 for minors and exotics. By comparison, some forex brokers based in other countries offer leverage as high as 1000:1.

Both the first in, first out rule and the anti-hedging rule may limit your trading strategy. These rules may also limit what forex trading platforms you can use.

You cannot use a credit card to fund your live forex trading account.

Best US forex brokers 2021

The foreign exchange market is more active than any other financial market in the world, with over $5 trillion swapping hands every day. This guide is focused on assisting US traders in finding the best forex broker for their style of trading.

We break down the best us forex brokers for commissions & spreads, trading platforms, execution, and overall quality. All of the top forex brokers we cover are regulated and licensed in the US by the national futures association (NFA) and meet a strict set of criteria, ensuring protection from forex scams.

For a more in-depth comparison of top US brokers, or if you are trading outside of the US, visit our sister site forexbrokers.Com. Our annual FX broker review covers the top brokers for 2020, with over 50,000 words of research and 5,000+ data points spanning 30 firms.

Best US forex brokers 2021

IG - best overall

TD ameritrade - currency trading with thinkorswim

Forex.Com - best for ease of use

Interactive brokers - best for professionals

As an early pioneer in offering contracts for difference (cfds) and spread betting, IG was founded in 1974 and has grown to be a global leader in the online trading industry. IG is a london-based public company listed on the london stock exchange’s FTSE 250 (LON: IGG). Read full review

Total forex pairs offered: 91

Likes: comprehensive research tools and real-time exchange data; broad range of markets, currency pairs, and multi asset cfds (including cryptocurrencies); licensed in major regulatory jurisdictions; competitive commission-based pricing and spreads on forex.

Dislikes: web platform trading windows must be resized manually to keep the layout organized; forex direct only available to professional traders within EU.

Bottom line: forex and CFD traders looking to trade a large number of instruments across multiple asset classes, including exchange-traded securities on international exchanges, will find IG offers an extensive range of tradable products on its platforms.

TD ameritrade's desktop trading platform, thinkorswim, offers an impressive combination of both design and functionality. The platform has virtually anything you could want, including live CNBC tv, trade alerts, real-time scanning, and practically every technical indicator under the sun for charting. Read full review

Total forex pairs offered: 75

Likes: powerful desktop charting that syncs with mobile; wide array of premium research and trading tools through thinkorswim platform; futures and options trading on forex and bitcoin futures.

Dislikes: forex only available to US residents; no web-based platform offered for forex; platform complexity may deter beginners.

Bottom line: for US-based investors and traders, TD ameritrade’s thinkorswim platform is a sophisticated multi-asset desktop experience optimized for securities trading, including off-exchange spot forex and exchange-traded options and futures (including bitcoin).

Forex.Com (gain capital) is known for providing forex traders a well-rounded offering. Like TD ameritrade and interactive brokers, it is also publicly traded and offers fx traders a large variety of trading tools. Beyond offering its own propertiary trading platform, forex.Com also offers metatrader4 (MT4) to customers, making it an ideal choice for investors of all experience levels. Read full review

Total forex pairs offered: 84

Likes: licensed in highly regulated jurisdictions; advanced charting capabilities in both desktop and web platforms; platforms feature numerous channels of research content and trading ideas; offers cryptocurrency cfds in the UK, and bitcoin futures in the US.

Dislikes: MT5 not yet rolled out; ceased business of regulated activities in hong kong.

Bottom line: FOREX.Com has plenty of options for forex and CFD traders across its regulated offerings globally. With full-feature platforms, diverse trading tools, and comprehensive research, FOREX.Com caters to traders of all experience levels.

Professional currency traders should consider interactive brokers. Interactive brokers is well-known in the US stock and options industry as an active trading broker. IMPORTANT: to trade forex with interactive brokers in the united states, you must be classified as an ECP, "an eligible contract participant is generally an individual or organization with assets of over $10 MM (or $5 MM if trades are hedging)." read full review

Total forex pairs offered:115

Likes: regulated in major jurisdictions and publicly traded; extensive range of global markets and asset classes; bitcoin futures trading supported; competitive fees and discounts for high-volume traders.

Dislikes: retail spot forex only offered to non-U.S. Clients; desktop platform too complex for inexperienced traders; web platform lacks forex charts; monthly minimum activity charges.

Bottom line: professional traders and highly experienced investors looking for a complete multi-asset forex broker will find interactive brokers offers a comprehensive platform with competitive fees across multiple global financial markets.

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Compare US forex brokers at forexbrokers.Com

Compare IG vs TD ameritrade vs forex.Com vs interactive brokers side by side and view an industry-leading comparison based on over 100 different data points.

Fxdailyreport.Com

Till about a decade ago, you had to make use of the telephone if you wanted to invest in the financial markets. You had to call up your broker for placing as well as closing orders. Introduction of online trading has, however, simplified every aspect of the investment process. You can carry out trades from the convenience of your home or on-the-go using the platform provided by brokers. Sounds simple, but the problem is there are umpteen number of forex brokers that offer trading platforms out there in the market. And, you need to work with the best forex broker if you want to achieve your financial goals. So, it all boils down to identifying the right broker to work with and it is definitely not an easy task. Read on to find out as to how you can identify the best forex brokers. In this post, various aspects you need to take into consideration when choosing a forex broker are discussed in detail so that the selection process becomes simpler and easier for you.

Top recommended and the best forex brokers for 2021

info	bonus	open account
min deposit: $5 spread: from 0.2 pips leverage: 500:1 regulation: FSA (saint vincent and the grenadines), cysec	50% deposit bonus, real contest 1st prize luxury car BMW X5 M, copy trading, trade&win.	Visit broker
min deposit: $1 spread: from 0 pips leverage: 3000:1 regulation: cysec, IFSC	$100 no-deposit bonus, 100% deposit bonus	visit broker
min deposit: $5 spread: from 0 pips leverage: 888:1 “*this leverage does not apply to all the entities of XM group.” regulation: ASIC, cysec, IFSC belize	“50% +20% deposit bonus up to $5,000, loyalty program bonus “*clients registered under the EU regulated entity of the group are not eligible for the bonus and the loyalty program”	visit broker
min deposit: $1 spread: from 0 pips leverage: 2000:1 regulation: FCA UK, cysec, FSP, bafin, CRFIN	35% of the account deposit	visit broker
min deposit: $100 spread: starting 0 pips leverage: up to 400:1 regulation: FCA UK, NFA, CFTC, ASIC, IIROC, FSA, CIMA	visit broker
min deposit: $300 spread: floating, from 0 pips leverage: 500:1 regulation: FCA UK reference number 579202	visit broker
min deposit: $200 spread: starting 0 pips leverage: 500:1 regulation: ASIC australia, FCA UK	visit broker
min deposit: no minimum deposit spread: 1.2 pips leverage: 50:1 regulation: CFTC, NFA, FCA, MAS, ASIC, IIROC	visit broker
min deposit: $10 spread: leverage: regulation: cysec	-	visit broker
min deposit: $200 spread: from 3 pips leverage: 400:1 regulation: NFA, FCA, cysec	visit broker
min deposit: $100 spread: starting 0 pips leverage: up to 500:1 regulation: FCA UK, ASIC australia, MAS singapore	visit broker
min deposit: $1 spread: fixed spread from 3 pips leverage: up to 1:1000 regulation: CBR, cysec and FFMS	30% forex deposit bonus	visit broker
min deposit: $250 spread: as low as 0.1 pips leverage: up to 400:1 regulation: ASIC australia and FCA UK	visit broker
min deposit: €100 spread: the spread can be as low as 0.01%” (0.01% = spread for EUR/USD) leverage: 1:294 regulation: ASIC, cysec, FCA (UK)	visit broker
min deposit: $100 spread: starting from 0.9 pips leverage: 400:1 regulation: MIFID, FSB & ASIC	visit broker

Risk warning: cfds are complex instruments and come with a high risk of losing money rapidly due to leverage. 76.4% of retail investor accounts lose money when trading cfds with this provider. You should consider whether you understand how cfds work and whether you can afford to take the high risk of losing your money.

Main parameters to be checked for identifying the best forex brokers:

#1: regulations and licenses

It is highly recommended that you choose only forex brokers that are regulated or authorized by leading regulatory bodies such as commodity futures trading commission (CFTC), national futures association (NFA) and financial conduct authority (FCA in UK), among many others. This is because regulated brokers are more reliable than their non-regulated counterparts. Further, your hard earned money remains safe with such brokers for two reasons: they will be appropriately capitalized and they maintain segregated accounts for theirs as well as traders’ funds.

#2: forex trading platform

The online trading platforms that recommended forex brokers provide would not only be simple, but also intuitive and easy to operate or navigate. It, therefore, makes sense to try out a few online forex platforms and see for yourself as to which one has a better user interface and is easily navigable.

#3: customer support services

Customer support is a key aspect that you need to evaluate. Best fx brokers would often be aware of the needs of the traders and provide good, efficient and responsive customer support services. During the course of trading forex on an online broker’s platform, there will be times when you need certain time sensitive clarifications. If the customer support service of the broker you are planning to work with is not good enough, you could end up losing money. It is, therefore, recommended that you evaluate the brokers’ customer support service both by speaking to their representatives on telephone and by communicating with them through email.

Leverage offered for forex trading varies from one broker to another. If the leverage is high, the trader can make more profits. However, the risk of accumulating losses is also equally higher. Therefore, you should choose a broker that offers leverage suiting to your needs and based on your style of trading.

Brokers often try to attract you by offering high capital bonuses when you make your first deposit. This is good because you get more money for trading. You can choose the broker that offers the highest first deposit bonus, but you should make sure other aspects discussed above and those that are discussed below suit your needs.

#6: deposits and withdrawals

It is important that you understand the brokers’ policies related to deposits and withdrawals. The features to be evaluated when choosing top forex brokers are minimum amount to be deposited to start trading, deposit methods offered, currency options provided, minimum withdrawal amount specified and waiting time for withdrawals, among others. Further, it makes sense to go through all other written policies in detail.

Brokers make money by charging a fee for each of the trading transactions that you execute on the forex trading platform provided by them. As far as the broker and you are concerned, the significant source of revenue would be the spread, the difference between ask and bid prices. It pays, therefore, to check as to how the brokers you have shortlisted handle spreads:

Do they offer fixed or variable spreads?
What is the average and maximum spread for the currency pairs that you are planning to trade?
What spreads are offered when the volatility is very high?
Do you have to pay any commission for each trade apart from the spread?

Before buying a car, you always go for a test drive. Similarly, look for forex brokers that offer demo accounts. This helps you to open a practice account. You can try out their platform and find out for yourself as to which of the shortlisted brokers is best suited to your requirements. Most brokers offer practice accounts these days. So, it is easy for you to get a feel of the brokers’ platform before committing to depositing money and trading.

#9: other parameters for identifying the best forex brokers

The forex brokerages that offer very low account minimums can be considered for evaluation under the category “best forex brokers”. This is good because you don’t have to deposit large amounts of money in order to trade forex. Minimum account balance can be as low as $5 in the case of some of the reliable forex brokers.

Online forex brokers often try to snatch business through promotions. Do not fall prey to their sales gimmicks. Best forex brokers would never make unbelievable and unachievable promotional offers. It is true that cash and prizes form part of the game, but they should be reasonable.

Another aspect to look for when evaluating online forex brokers is the educational services offered by them. This helps you to master the art of forex trading. Brokers that provide you with a variety of educational tools for assisting you in assessing the forex market are the best forex brokers to work with.

Why expert traders trade with regulated forex brokers

If you’re looking to become a successful forex trader, then working with a skilled and trustworthy broker is very crucial. In the forex market, the two main types of brokers you’ll get include the regulated and the non-regulated brokers. Obviously, the former typically operates under regulations stipulated by a forex regulator. Regulated forex brokers must also be fully licensed and registered in their country of operation, unlike their non-regulated counterparts.

Role of regulation

Of course, the role of regulation in forex market cannot be underestimated. Regulation ensures that all players in this booming industry are strictly supervised. This way, merchants are protected from the many unscrupulous traders out there looking to swindle them off their hard earned money. Another thing, regulation also builds trust between merchants and their brokers, since most merchants don’t have enough time to monitor every investment.
Let’s take a quick look at some of the leading regulatory agencies:

CFTC and NFA: commodity futures trading commission and national futures association, regulate the financial services sector in united states of america (USA).

Cysec: the cyprus securities and exchange commission is the regulatory watchdog within the cysec domain. It offers services to the EU member states.

FCA: the financial conduct authority regulates the operations of over 56,000 financial services and companies in the UK.

ASIC: the australian securities and investment commission regulate the financial services sector in australia.

FSB: the financial services board is a south african agency which oversees functioning, regulation, and licensing of south african forex brokers.

Bafin: bafin is a financial supervisory authority providing its services to forex companies in germany.

Advantages of regulated forex brokers

With regulated brokers, you’ll always have some peace of mind when carrying out your real-money transactions. To expound more, here are the main reasons why expert traders prefer regulated brokers:

1. Credibility

It’s an open secret that most of us like to deal with trusted organizations, especially when money is involved. That being said, the credibility of any forex broker is greatly enhanced if the company is regulated by the relevant agencies. Remember that all regulated forex brokers are mandated to follow some strict rules put in place by their respective regulatory bodies. Furthermore, their regulatory bodies expect them to regularly present a copy of their audit report. Therefore, if a broker is listed on its regulatory body list, then it’s safe to say that the forex broker has fully complied.

2. Compensation

Getting compensated in case of any unfortunate scenario is arguably the best reason why most expert traders opt for regulated brokers. With most regulated brokers, you can rest assured that all your hard earned money will be refunded in case your brokerage firm goes down. For example, brokers operating under cysec are required to remit their contribution to the ICF (investor compensation fund). This pool of funds is to help settle any form of customer claims in case of any eventuality.

3. Effective customer service

Before choosing a forex broker, it’s always recommended that you settle for one who can effectively and immediately resolve all customer issues. In this case, most regulated brokers are always competent enough when dealing with technical support or account issues. In addition, they are very helpful and kind during the whole account opening process.

4. Quick deposits and withdrawals

Any reputable forex broker will allow their merchants to make deposits and withdrawals without any hassle. A regulated broker should have no reason whatsoever to make your earnings process difficult because they don’t have control over your funds. All they have to do is to facilitate the platform to make it convenient enough for you to trade.

5. Updated trading platform

Most regulated brokers are mandated by their respective regulatory authorities to provide their clients with the latest, powerful, and easy-to-use trading platforms. In fact, most of their platforms will readily provide you with all that you need to begin trading immediately. You’ll get a lot of educational materials including webinars, videos, articles, seminars, and e-courses at no extra charge. It goes without saying that regulated brokers also offer their clients free demo accounts to help them sharpen their skills before going live.

6. Legality

All over the world, governments are struggling to deal with issues concerning money laundering. Some of them have even gone ahead to pass very strict anti-money laundering laws. So to be on the safe side, you should always trade with a regulated broker. Most regulated forex brokers will ask you to provide some of your personal identification documents such as proof of address and photo ID. This might sound tedious to you but it’s always safe to be part of a regulated organization that can prove your money is being used in a legal way.

To sum it up, regulated forex brokers are always the best as well as the safest option to trade with. This is because they are always ahead in terms of legality, security, and safety of your funds. All in all, you can manage your risks better if you opt for a regulated forex broker.

Understanding true ECN vs STP broker

The foreign exchange market, also known as currency market, is a universal decentralized market that provides traders an opportunity to trade currencies. It is a market which incorporates all aspects of buying, selling, and exchanging currencies at the present-day or determined rates.

There are different kinds of forex brokers that you can choose to trade forex with. However, though all the brokers in forex are intended to provide a similar basic solution, the way they operate behind the scenes is different. Different types of brokers have varying techniques of operation, and the specific broker you cooperate with can significantly determine your success rate as a forex trader. Here are some crucial factors that will enable you determine which broker between a true ECN and STP broker is the best one to trade forex with:

Understanding true ECN vs STP broker

True ECN i.E. Electronic communications network brokers operate without their individual dealing desk. These brokers provide an electronic trading platform where professional market makers at monetary organizations such as banks, and other online trading participants including traders can enter bids and offers through their particular systems.

STP i.E. Straight through processing brokers are brokers without a dealing desk also. These brokers apply some of the techniques utilized by market makers to provide their particular clients with trading conditions which are more flexible. By STP brokers hiring some of the tactics of market makers, they are able to bypass the limitations connected to trading exclusively within the interbank market.

General overview of true ECN and STP brokers

Use of scalping techniques

True ECN and STP forex brokers do not care about how much their particular traders make. Therefore, these types of brokers allow traders to utilize scalping techniques to close their respective positions. Note that false ECN and STP brokers cannot allow you to use scalping techniques as a trader since they will be disadvantaged anytime you make small profits.

True ECN and STP brokers are types of forex brokers without a say when it comes to control on spread provided. These brokers have no control on spread offered since it’s the liquidity provider that determines the spread which is to be provided.

Though true ECN and STP brokers can add markups when necessary, they cannot in any way take it further down than the amount provided.

Difference between true ECN and STP brokers

Commission charged

On true ECN accounts, as a trader you will be required to pay a fixed commission to open and close trades. The spreads offered on true ECN accounts are determined by the rates of liquidity providers.

When using STP accounts as a trader, you will not be required to pay any commissions.

Pros of trading forex with a true STP broker

Cannot bankrupt themselves

True ECN brokers cannot trade against their specific clients to bankrupts themselves.

Similar price rates

If you are a forex trader, trading with a true ECN broker means you are guaranteed of price rates that are similar to those of the interbank market.

Negative balance protection

As a trader utilizing the trading account of a true ECN broker, the broker will be accountable for any dues with liquidity providers should your account read negative as a result of any reason beyond their control.

Cons of choosing a true ECN broker

Dealing with a true ECN broker will require you to pay rollover fees and commission at times.

Pros of trading forex with an STP broker

Their rates and the interbank prices are same

They provide their clients low entry capital requirements

Cons of choosing an STP broker

Choosing an STP forex broker means when you enter a trade you’ll not be informed what spread to expect.

Most true ECN and STP brokers are linked to several liquidity providers at the same time period. Despite both true ECN and STP brokers having incredible trading solutions which can meet your needs as a trader, their terms of operation vary. Whether you will choose a true ECN or STP broker, the rule of thumb is always ensuring you minimize losses and maximize profits as much as you can when trading forex. Ensure you compare carefully the terms of service of both a true ECN and STP broker before you choose one to handle your trading needs.

Best US forex brokers

When forex first became available to retail traders around the world in the early 2000s, the US was one of the earliest entrants into this new and exciting arena. Before this, only institutions and high-net-worth individuals had access to the forex market.

It is not surprising that US traders quickly adopted forex into their trading – the US already had a substantial community of retail traders because of its large stock market. As a US trader, moving from stocks to forex was especially attractive because of the high leverage offered in forex compared to stocks.

With the popularity of forex trading, the competition among US-based forex brokers intensified. New retail traders are often unsure about the various types of brokers available and which one is best suited for their trading needs. We have created an in-depth analysis of all forex brokers in the US and narrowed down the list to our top US forex brokers, so you can choose the best broker for you. Our research included hundreds of hours of hard work so that you can make an easy choice where to begin your forex trading journey. Through our independent research, we found the right type of broker for various trading needs and skill-levels, from new retail traders to longstanding day traders to seasoned professionals.

Up to 27% lower spreads vs top two U.S. Brokers. Spreads starting at 0.8 pips with zero commission

Excellent trading conditions + NFA regulation

$500 to open an account, $100 afterwards

Excellent trading conditions + NFA regulation

One of the only US binary exchanges regulated by the CFTC

Is forex legal in the US?

Yes. As a US trader, it is legal for you to trade forex. US regulators exist to make sure forex brokers accepting US clients are properly monitored to act ethically and lawfully.

Understanding the US forex market

The US dollar is the world’s largest currency and is considered the world’s reserve currency. Oil, gold, and many other commodities are priced in US dollars. Plus, as mentioned before, the US contains the world’s largest equity market. All these factors lead to the US dollar being the world’s major forex currency. The term “major pairs” are forex pairs containing the USD, for example, EUR/USD, USD/JPY, GBP/USD, and so on. That said, US forex brokers usually offer forex pairs that do not contain the US dollar, for example, EUR/JPY, CAD/JPY, GBP/NZD, etc. Forex pairs not containing the US dollar are known as “crosses”. As a US trader, you can trade both major forex pairs and crosses.

US forex market regulation

Of course, as US forex brokers appeared on the scene to meet new demand from retail traders, the best US based forex brokers carried out their operations legitimately, but others did not operate with integrity or in a way that served their clients’ interests. US regulators quickly realized that they could not allow forex brokers accepting US clients to provide dishonest services or steal client money. Before retail forex arrived in the US, the wider US financial sector was already tightly regulated, so it was only a matter of time before forex brokers accepting US clients faced similar stringent oversight. That is a good thing – as a US trader, you want to be protected from brokers who do not operate honestly, to say the least.

What is the US market regulation?

If you are being offered services from a US forex broker, they must be regulated by the commodity futures and trading commission (CFTC) and be a member of the national futures association (NFA). The NFA offers an online verification system called background affiliation status information center (BASIC), where forex brokerage firms can be verified for having the necessary regulatory compliance and approval.

How a regulated market benefits you

Forex regulation in the US benefits you in two ways. Firstly, it ensures that regulated US forex brokers are relatively well run and capitalized, which helps lower the probability that your broker will collapse and leave you waiting to get your deposit returned while you wait for bankruptcy proceedings to be concluded. Secondly, it ensures that your broker cannot unfairly take advantage of you and must offer you a fair market, and the trading conditions which their advertising promises.

How to verify your broker is regulated

Regulated forex brokers always publish the information verifying by whom they are regulated and usually also the details of their license. It is usually published at the bottom of the home page of their website, and sometimes at the bottom of every page within the website. Typically, regulated forex brokers also have a dedicated web page giving full in-depth details of their regulatory arrangement.

Dodd-frank act

The dodd-frank act, a set of US regulations passed in 2008 in response to the financial crisis, had a huge impact on US forex brokers. Many feel that the stringent regulations resulted in US forex brokers moving operations offshore or closing their doors completely. Those US forex brokers that remain now face some of the most stringent capital requirements required by forex brokers anywhere in the world plus hefty licensing costs.

It is worth noting that the securities exchange commission (SEC) does not have authority over the forex market because it does not consider currency pairs securities.

Client deposits at US regulated forex brokers are not protected by any form of deposit insurance. Despite this lack of protection, US forex brokers are still seen as amongst the safest in the world because of strong CFTC and NFA oversight.

Leverage for US regulated forex brokers is capped at 50:1 and this maximum leverage cap is designed to protect retail traders from excessive leverage. It also means that the best US forex brokers all operate under the same maximum allowances for leverage thereby removing leverage as a factor when choosing amongst the best US forex brokers for beginners or advanced traders.

As a final thought on US forex market regulation: as a US trader if you come across an overseas forex broker that is not registered with the NFA but accepts clients from the US, be highly cautious before handing over your deposit. The advantage of working with the best US forex brokers for beginners or advanced traders is a reliable, trustworthy firm to execute your trades.

Advantages of choosing to work with US forex brokers

The question to you as a US trader is whether these imposing restrictions are good for retail traders or serve as a detriment. The truth is that strong regulations are both beneficial and detrimental. As a detriment, the stringent requirements have made it difficult and costly for forex brokers to accept US clients and that in turn has limited the choice of forex brokers accepting US clients. On the beneficial side, those forex brokers accepting US clients have worked very hard to meet all the regulatory requirements. They will be well-capitalized, have excellent compliance, and most importantly they are serious about being in the industry for the long-term. Unlike other parts of the world, there are sketchy US based forex brokers.

All US regulated forex brokers fall under the same set of regulations making the landscape much easier to navigate – there are no regional or state-level differences. That means if you are comparing one US forex broker with another US forex broker, you know that they will operate under the same set of rules.

What is the difference between a dealing desk and a non-dealing desk?

A dealing desk broker takes the trade for itself and is, therefore, the client’s counterparty. In other words, they carry the client’s position on their books. Importantly, that means they do not execute client orders on the prices given by their liquidity providers. As such, a dealing desk broker is also known as a market maker as they literally create a market in the underlying security for their clients. This is not to say that dealing desk brokers do not have access to liquidity providers. Depending on the trade direction, size, and market conditions, they will decide whether they keep the trade on their books or not, and at some point, match their position with a liquidity provider. A dealing desk broker will charge a spread for their services.

In contrast, non-dealing desk brokers do not pass their clients’ orders through a dealing desk. They link buyers and sellers together through liquidity providers such as banks and institutions. There are two types of non-dealing desk brokers: electronic community network (ECN) and straight through processing (STP). Ecns generally have more liquidity providers than STP brokers. Non-dealing desk brokers do not charge a spread; instead, they charge a commission. There still may be a small spread on the trade but it is the underlying market spread, not a spread being created by the broker.

When you are choosing between dealing desk and non-dealing desk options, the most important feature is that non-dealing desk brokers offer the best bid/ask prices in the market. Secondly, non-dealing desk brokers will rarely show you a requote in normal market conditions when you execute the trade, in other words, you almost always get the price you see on the screen. This may not be the case when markets are particularly volatile, for example, during a big economic data release or news event.

Non-dealing desk accounts usually require higher minimum deposits and minimum trade sizes. For smaller account sizes, especially for mini and micro-lot accounts, the only option is often a dealing desk account.

Forex trading times in the US

The US forex market for retail traders concentrates around the eastern time zone. Although there is no hard line that defines when the forex market opens for US traders as it runs 24 hours a day, five days a week, it is widely agreed that the US opening time for forex is at 8 a.M. Eastern time. The first couple of hours of the US open is historically the most liquid during any 24-hour forex period because london and other european centers are still operating at that time.

How to choose a forex broker as a US trader

Just as the team at dailyforex considers multiple variables in whether we should recommend a particular US forex broker, as a US trader you should also employ a thorough analysis considering numerous factors. Whilst we do a lot of the hard work for you, here is a checklist you can employ for yourself.

Low costs

Is the cost of trading, in particular spreads and commissions, competitive?

Trading platforms

Are you happy with the trading platforms offered? Is there a choice of platforms? Does the broker offer mobile trading?

International offering

Is the broker truly global, offering access to wide range of global asset classes? This can be especially important if you want to trade individual stocks.

Spreads, commissions, & leverage

Spreads, and also commissions (if charged) can make a big difference to your overall cost of trading, as these are going to be the biggest cost you face by far, unless you make very few trades and hold for the long term. It is important to be sure that you really know what spreads and commissions are going to realistically be – do not rely upon what you see in a broker’s demo account, as the spreads you see here typically do not reflect what you will face in a real, live money account.

Leverage – the amount that a broker will let you borrow to trade – is another important issue. Almost every broker will offer quite generous leverage on forex and many other asset classes, but if you are seeking high leverage, it is important to check the maximums allowed asset by asset.

Account types

Some forex brokers will offer their clients a choice of different types of account. The right choice of account type for you will probably depend upon the minimum deposit required, what you want to trade, and how often you trade.

Some general rules about which account type is probably going to be most suitable for you:

The micro account accommodates deposits lower than $500.

The mini account accommodates deposits lower than $10,000, and will be the more suitable vehicle for most retail forex traders with more than $500 to deposit.

The standard account is most suitable for more experienced traders with more than $10,000 to deposit. There is little doubt that if you can afford it, the higher deposit you make, the better deal you will get on overall fees and other trading conditions.

Minimum deposit

Most forex brokers require a minimum deposit to in order to accept a new customer, and this is especially true for a wealthy country such as the US. This is justifiable as brokers incur their own operational fixed costs in opening and maintaining a new account. Fortunately, minimum deposits required by forex brokers in the US tend to be low and affordable for the majority of americans, at ranges between approximately $100 and $250. It is important to remember that these minimums are not applied to ongoing account balances, they just mean that to open an account you have to start by depositing a minimum amount.

Trading apps

The traditional image of the forex trader as glued to their laptop or PC is out of date. More and more people are trading from apps, not least because using a trading app allows you to monitor and trade markets no matter where you are or what time of day or night it is. This does not mean that app traders are glued to the market, it means they use apps intelligently by setting their trading apps to alert them when something interesting happens in the market.

Every forex broker in the US will offer their own dedicated trading app and they are mostly reaching very high standards.

Customer service

Person-to-person customer service is something that you will probably never need, but you do want to know that if you need it, it is there and at a high standard.

Fortunately, due to the low number and generally high reputations of US forex brokers, and high expectations of customer service in american culture, you are unlikely to find that you will be lacking help if you reach out and ask for it – or even if you do not.

All forex brokers today have automated FAQ searches which should troubleshoot a solid majority of any operational difficulties you might encounter in your trading.

Day trading

Day trading is short-term trading: in the literal sense of the phrase, it refers to forex traders who open and close all their trades on the same day, without leaving any trades to run over the long term. In practice, day traders sometimes do leave at least some of their floating profit to run for days, or even for weeks and months if the trend is especially strong.

Day traders have special requirements and priorities. As they tend to trade frequently, the cost of spreads and commissions becomes more important to their bottom-line profit and loss. As they rarely or never leave positions overnight, swap / overnight financing fees which are imposed by forex brokers on open trades become irrelevant. This means that one forex broker may offer a better deal for day traders and another one for longer-term swing or position traders. Day traders can also benefit from more precise technological tools and faster executions, so anyone intending to be a day trader should investigate these areas carefully when looking to choose a forex broker.

Day traders often trade in a “scalping” style – opening and closing lots of trades very quickly. Some brokers do not allow this, so if you want to scalp, it is important to check this is OK with the broker you want to choose.

Methodology: how does daily forex test and choose US forex brokers?

As a US trader, you will have plenty of questions when choosing from a selection of forex brokers accepting US clients or even trying to find which are the best US forex brokers for beginners. As always, our team of analysts and industry experts at dailyforex have done much of the hard work for you to bring you the best US regulated forex brokers.

We employ a rigorous methodology that measures multiple variables to find the best US forex brokers for beginners and advanced traders. First and foremost, we are most concerned with the financial stability and regulatory compliance of any broker we review. Next, we look at the reliability of their execution, including speed of execution and accuracy of filling client trades. Then we consider the cost of trading whether it is through spreads and/or commissions. We review the capability of the platforms they offer traders for charting and execution, followed by the level of customer service they give clients. For example, are they available by phone 24 hours a day? Or is customer service by email only? Our team has direct experience of the brokers we are assessing through live and demo accounts, and by dealing with their customer service personnel. This 360-degree review of every US forex broker gives us a complete understanding of whether they should sit on our list of forex brokers accepting US clients.

What is the best forex broker in the USA?

The best overall US forex broker in our analysis is IG. The next strongest contender is forex.Com. If you want to trade in innovative ways using binary options and similar methods, we strongly recommend nadex.

Can you trade forex in the USA?
Yes. Forex is legal to trade, and US forex brokers are well regulated by the national futures association (NFA) and the commodity futures trading commission (CFTC).

What is the best forex broker for US beginner traders?

The best US forex broker for a beginner trader is IG. They offer an unparalleled support service and an outstanding academy to make sure you have the foundational knowledge required to succeed in forex.

How to become a forex trader in the US?

The keys to becoming a forex trader in the US is having a methodology or trading strategy that you have profitably tested on a demo account, and then finding the best US forex brokers that will execute your trades when you switch to a live account.

Best US forex brokers

Up to 27% lower spreads vs top two U.S. Brokers. Spreads starting at 0.8 pips with zero commission

Excellent trading conditions + NFA regulation

$500 to open an account, $100 afterwards

Excellent trading conditions + NFA regulation

One of the only US binary exchanges regulated by the CFTC

Is forex legal in the US?

Yes. As a US trader, it is legal for you to trade forex. US regulators exist to make sure forex brokers accepting US clients are properly monitored to act ethically and lawfully.

Understanding the US forex market

US forex market regulation

What is the US market regulation?

How a regulated market benefits you

How to verify your broker is regulated

Dodd-frank act

It is worth noting that the securities exchange commission (SEC) does not have authority over the forex market because it does not consider currency pairs securities.

Advantages of choosing to work with US forex brokers

What is the difference between a dealing desk and a non-dealing desk?

Forex trading times in the US

How to choose a forex broker as a US trader

Low costs

Is the cost of trading, in particular spreads and commissions, competitive?

Trading platforms

Are you happy with the trading platforms offered? Is there a choice of platforms? Does the broker offer mobile trading?

International offering

Is the broker truly global, offering access to wide range of global asset classes? This can be especially important if you want to trade individual stocks.

Spreads, commissions, & leverage

Account types

Some general rules about which account type is probably going to be most suitable for you:

The micro account accommodates deposits lower than $500.

The mini account accommodates deposits lower than $10,000, and will be the more suitable vehicle for most retail forex traders with more than $500 to deposit.

The standard account is most suitable for more experienced traders with more than $10,000 to deposit. There is little doubt that if you can afford it, the higher deposit you make, the better deal you will get on overall fees and other trading conditions.

Minimum deposit

Trading apps

Every forex broker in the US will offer their own dedicated trading app and they are mostly reaching very high standards.

Customer service

Person-to-person customer service is something that you will probably never need, but you do want to know that if you need it, it is there and at a high standard.

All forex brokers today have automated FAQ searches which should troubleshoot a solid majority of any operational difficulties you might encounter in your trading.

Day trading

Methodology: how does daily forex test and choose US forex brokers?

What is the best forex broker in the USA?

What is the best forex broker for US beginner traders?

How to become a forex trader in the US?

So, let's see, what we have: looking for a trustworthy US forex broker? Check out our expert list of the best brokers in the USA and learn more about FX law and regulation in america. At best us forex broker 2021