Although what determines the best forex broker for you will ultimately depend on your own individual needs as a trader or investor, we have handpicked these brokers due to the fact they have industry leading products and services that can cater to all investing and trading styles.
Founded in 1974, IG is a publicly traded (LON: IGG) company that is regulated in an impressive six tier-1 jurisdictions, making it a great broker for forex trading. They offer one of the best web-based platforms and award-winning mobile apps for anyone to trade forex without any hassle. Forex trading is available commission free with some of the lowest spreads you will find. You can trade long or short on a huge choice of more than 80 major, minor and exotic currency pairs. IG are one of the only brokers that offer weekend forex trading on selected instruments.
- Award-winning trading platforms
- Free trading tools to help you trade
- Go long or short
- Wide range of FX pairs
- Capitalise on high liquidity
- Access to weekend forex trading
- Multi-regulated brokerage firm
- Friendly and expert support 24 hours a day
When you open a forex trading account with AvaTrade, you get to enjoy the benefits of an internationally regulated broker. Since they were founded way back in 2006, AvaTrade have provided multiple award-winning forex trading services to over 300,000 clients across the globe. This includes powerful yet easy to use platforms for desktop, web and mobile trading apps. You can get access to ultra-low forex spreads whilst they charge zero commission fees. AvaTrade also offer thousands of other financial instruments such as stocks, indices, commodities and cryptos. There are even social trading signals if you wish to copy other traders. This is all backed with professional multi-lingual support available 24/5 and convenient account funding methods.
- Low spreads
- No commission fees
- Free demo trading account
- Multiple industry awards
- Best trading platforms
- Expert advisors
- Regulation across 7 jurisdictions
- Professional support
Anyone who has previously traded forex or is in the industry should have heard of IC Markets. They are one of the most well-respected forex brokers out there. The IC Markets forex offering is one of the most competitive in the world. You can get access to the world’s largest and most liquid market with raw spreads starting from just 0.0 pips. IC Markets offers forex traders some of the tightest spreads out of all forex brokers around the globe with the EUR/USD spread averaging 0.1 pips. The brokers tight spreads combined with low latency enterprise grade hardware makes IC Markets the ideal choice for active day traders and those using Expert Advisors.
- Over 61 currency pairs
- Tight spreads from 0.0 pips
- Superior trade execution speeds
- Deep liquidity
- Excellent for automated trading
- Trade 24/5
Founded in 2009, XM Group is a trusted broker that offers forex trading with lightning fast execution speeds, zero re-quotes and zero rejections. XM clients can choose from the ultra-low spread accounts with a small commission of $7 per side, or the commission free account where all costs are included within the spread. The broker provides powerful and versatile platforms for multiple devices, along with plenty of educational resources including seminars, webinars, trading tools and market research.
- 55+ currency pairs – majors, crosses and exotics
- Tight spreads and no re-quotes
- 16 trading platforms
- Trade with no hidden charges
- Free forex education and market analysis
- Daily access to forex signals
- 30+ industry awards
- 24 hours a day, 5 days a week
With Pepperstone you can take advantage of forex volatility and trade 60+ currency pairs with razor sharp pricing, low spreads and top tier liquidity. The broker gets its forex prices from multiple Tier 1 banks which means consistently competitive spreads. Top tier liquidity ensures you can get all of your FX trades filled in full, with no partial execution or requotes on market orders. The Pepperstone award-winning customer support team are available to assist you 24/5 and during limited hours on the weekend. It is quick and easy to open an account, anyone can apply for a trading account in just a few minutes. Pepperstone offer three powerful trading platforms available on PC, web and mobile, which you can use to analyse the FX market, place and manage trades. The dedicated market research analysts can give you the insights you need to make informed forex trading decisions.
- 60+ FX currency pairs
- Top tier liquidity
- Low spreads & quick execution
- Advanced trading platforms
- Forex market research and analysis
- Award-winning 24/5 support
The foreign exchange market (forex or fx for short) is the market for exchanging foreign currencies. The forex market is the largest and most liquid financial market in the world, with trillions in trading volume every day. It is open 24 hours a day, from Monday through to Friday. One of the main features of the forex market is that there is no central marketplace or exchange in a central location, as all trading is done electronically via computer networks. This is known as an over-the-counter (OTC) market. Whereas the stock market is overseen by a central exchange, the forex market is overseen by global banks and other financial institutions. The main trading centres are London and New York City, although Tokyo, Hong Kong, and Singapore are all important financial centres as well.
Both investors and traders seek profits through market participation. Generally speaking, investors look to make larger returns over an extended period of time through holding their position. Traders on the other hand, attempt to take advantage of both rising and falling markets to enter and exit multiple positions over a shorter time frame, targeting smaller and more frequent profits.
What Impacts the Forex Market?
As with any other market, currency prices are determined by the supply and demand of buyers and sellers. In addition to that, there are also other macro factors that can impact the market. Currency demand can be influenced by interest rates, central bank policies, the rate of economic growth, natural disasters and political events in the country where the currency is used.
Forex trading means exchanging one currency for another. Forex is always traded in pairs which means that you’re selling one to buy another. A trader buys one currency and sells another, with a view to making a profit based on the exchange rate which constantly fluctuates based on supply and demand.
If a trader thinks the price of a currency will rise in the coming days, they may buy it (go long) and plan to sell it in a few days for a profit. On the other hand, if they think the price of a currency will drop, they may sell it (go short) with a view to buying it back when it is cheaper.
The following seven currency pairs are referred to as the majors and account for approximately 75% of all trading in the forex market:
The majority of forex traders will open and close positions on a frequent basis, some even doing it as a full-time job. However, a significant amount of the trading activity in the forex market occurs between institutional traders, including bank employees, investment management firms and multinational corporations. Because there is so much trading that focuses on speculation or hedging, it is imperative that forex traders keep up to date with the various dynamics that can cause rapid spikes in currency pairs.
The value of a currency pair is influenced by trade flows, economic, political and geopolitical events which affect the supply and demand of forex. This creates daily volatility that could present a forex trader with numerous opportunities.
Forex investing is when an investor looks to invest in a particular currency with a view to holding it for the long term. On the contrary to forex traders who can take multiple positions on a daily basis, a forex investor is likely to take a handful of initial positions and let them develop over time. This requires less time but also more patience.
The main goal of investing is usually to gradually build up wealth over an extended period of time through the buying and holding of a portfolio of forex, stocks, indices, commodities and other investment instruments. Investors may choose to ride out downtrends as they look at the overall bigger picture, which could be a period of years, or even decades.
Long ago, anyone wanting to speculate or invest in the forex market, would have hired a forex broker to trade on their behalf. However, today’s technology means that anyone can place and manage their own trades through a trading platform. All they need is an account with an online forex broker to buy and sell currencies as they please.
A forex brokerage is an intermediary who buys and sells currency pairs on behalf of its clients for a commission fee and/or spread mark up. They allow individual retail traders access to trade the forex market through an online trading account and user-friendly platforms. Forex brokers can also offer other services such as trading education, market analysis and research, trading tools, trading signals, social trading and managed accounts.
Participating in the forex trading market via a broker means that the client receives access to real-time pricing of the forex market and is quoted buy and sell prices for a number of instruments via an online trading platform. The client has the freedom to decide at which price they decide to buy or sell, and vice versa, and can execute a transaction at any time they wish.
How to choose a forex broker?
The ever-increasing popularity of online forex trading has meant that brokers are popping up all over the place. There are a handful who have been around for many years and are regulated, whereas there are those that are not regulated and could disappear off the face of the earth tomorrow. Some brokers have a basic offering so that you can trade or invest in forex, other offer a more complete range of products and services. Whatever your individual needs, it is important to choose a suitable broker that can help you achieve your goals.
Regulatory agencies worldwide regulate brokers and financial markets to protect investors from unlawful practices. These regulatory bodies enforce rules and regulations that brokers have to abide by. We would always check to make sure that a forex broker is regulated, ideally by what we consider to be a top tier regulator such as the Australian Securities & Investment Commission (ASIC), Financial Conduct Authority (FCA) and the Commodities Futures Trading Commission (CFTC).
If you have a particular forex currency pair in mind, you would want to make sure that it is available to trade with the broker you are looking at. You can also check what other financial markets they offer. The best forex brokers will also offer some form of tradeable stocks, indices, commodities and cryptocurrency.
If you are interested in other financial instruments, we have the following guides:
You will be using the brokers trading platform to analyse the forex market, place and manage your positions. If you are already familiar with a particular trading platform, you may want to make sure that it is provided by the broker. If you are new to the world of forex trading, the MetaTrader platform is a popular choice for forex and CFD traders all across the globe. It is well known for its user-friendly interface and abundance of implemented trading tools. There are trading platforms for desktop, web and mobile trading apps. Check there is a platform that is suitable for you, if you want the convenience of trading on the go, a mobile trading app would be a must.
If you are looking for an investment platform, please feel free to check out these free guides:
Some brokers ask for a minimum amount of investment before you can get started so it’s important to check that you are comfortable with it. We have seen brokers have minimum deposits ranging from $1 all the way into the thousands. Some brokers have different account types and only offer the best conditions to those who make larger deposits. We believe that everyone should have the same conditions regardless of their investment size.
When choosing an online forex broker, it is important to look out for things like pricing, fees and commission which could eat into your profits. Typical broker fees include a commission for entering and exiting a position along with the spread which is the difference between the bid and ask price. Other broker fees to look out for include funding and inactivity fees. Some specialised trading platforms and tools can also incur monthly fees. There may also be fees for holding positions overnight.
You will need to fund your brokerage account in order to trade or invest in the forex market. Whilst the majority of brokers will support bank transfer and card payments, some also incorporate modern methods of payments such as e-wallets and cryptocurrency. Check to see the method for deposit and withdrawal are convenient for your circumstances.
We believe that a good broker should care about clients and have their best interests in mind. For that reason, we like to see brokers offering plenty of educational materials to educate traders so that they can make informed trading decisions. This can include trading guides and tutorial videos. Another great addition is any market analysis and research, which can help traders keep up to date with the latest market movements and inspire ideas.
Whilst the majority of forex trading platforms should have plenty of trading tools to satisfy the needs of even the most demanding of traders, there are those who will require specialist tools. No doubt, the right tools can help with the overall trading experience. For instance, a forex calculator could be useful for planning your positions whereas industry leading market analysis tools such as Autochartist and Trading Central, can provide trading signals based on complex automated analysis.
A demo account can be a great way to practice investing and trading online, risk-free. These come preloaded with virtual funds and allow you to familiarise yourself with the forex brokers platforms, tools and test out the quality of their service. Once you feel confident enough, you may then consider switching over to a real account which should be a seamless process.
If you get stuck at any moment and need assistance, you will want to be able to reach out to a broker’s support team that is responsive and helpful. Nothing is more frustrating than waiting days for a simple response or even worse, not getting any response at all. We generally prefer brokers that have a live chat option available 24/7. This means that we should be able talk to someone at any time. You might also want to ensure that support is provided in your native language. It can be a good idea to try reaching out to the support team before opening a broker account, just to try and gauge what their response time is like.
It doesn’t matter if you are trading forex, or investing for the long run. Either way, you will want to shop around to make sure you choose the best forex broker for your own individual needs. That can depend on many factors, including but not limited to broker regulation, fees, minimum deposit, Trading Products, trading platforms and tools, educational resources and funding options. Whilst this guide outlines some of our top forex brokers and the reasons why, the final decision is down to you.