There are a lot of forex brokers out there to trade the financial markets with. Choosing the best broker can be both challenging and time consuming. To make things easier, forexbrokerlisting.com has selected some of the top forex brokers and compiled a simple and comprehensive listing with forex brokers reviews and ratings, for you to choose from.
Best Forex Brokers To Trade With in the World
Here are the best forex brokers to trade with globally:
XM – Best Forex Broker with multiple awards across the globe
Being the most recent winner of the COLWMA (City of Wealth Management Awards) award, XM.com has more than three million customers and is definitely one of the leading brokers on the Forex market. XM.com offers an amazing variety of market analysis, educational and lecture content for the novice trader. Customers can expect an enjoyable trading experience available on the web and mobile platforms. Both platforms incorporate all the necessary functionality with the mobile platform edging ahead in design. User registration is effortless and painless, and users can expect a timeous response from tech support who sometimes need more than one attempt to resolve the issues. Read the full review here
FP Markets – Best execution and lowest spreads
FP Markets is a global, online forex broker that was founded in 2005 and offers Forex trading and has a head office situated in Australia.
When starting off with FP Markets traders will need to make a minimum deposit of $100 and a demo account is on offer with a wide variety of instruments and currency pairs on offer.
Over 100 instruments and over 60 currency pairs in total is on offer, on the popular MT4 forex trading platform. FP Markets also offers traders mobile apps for Android and iOS.
FP Markets Trading benefits include:
- Allows scalping
- Allows hedging
- Offers STP
- Low min deposit
- Offers Negative Balance Protection
Markets.com – Best Overall Offering
Markets.com is an online broker that was founded in 2008 and offers Forex trading, and CFDs and Spread Bets. Spread Bets are only available to UK customers trading.
- Regulated by: Cyprus Securities and Exchange Commission (CySEC), Financial Sector Conduct Authority (FSCA), Financial Conduct Authority (FCA), Australian Securities and Investment Commission (ASIC)
- Headquarters: Cyprus
- Min Deposit: 100
- Used by over 10,000 traders
Markets.com is one of the few brokers that offer both of the MetaTrader platforms; MT4 and MT5 and also offers mobile apps for Android and iOS.
Markets.com Trading benefits:
- Allows scalping
- Allows hedging
- Low min deposit
- Guaranteed stop loss
- Offers Negative Balance Protection
- Offers Forex Signals
Markets.com Trading Accounts Offered:
- Demo account
- Mini account
- Standard account
- Islamic account
Markets.com supports a wide range of languages including Arabic, Chinese, Dutch, English, French, German, Italian, Japanese, Norwegian, Polish, Romanian, Russian, Spanish, and Turkish. Read the full review here
Avatrade – Best support for new traders
AvaTrade is an online broker which was founded in 2006 and offers Forex, CFDs, Spread Betting and Social Trading and is a global broker with offices all around the globe.
For those who are looking to start out with AvaTrade will need a minimum deposit of $250 and a demo account is available for those who want to get acquaint with the popular MT4 forex trading platform. AvaTrade also offer mobile apps for Android and iOS.
AvaTrade is perfect for various levels of traders including beginners and all traders can trade a wide variety of instruments and currency pairs. Read the full review here
Etoro – Wolrd’s best copy trading service
eToro is an online broker which was founded in 2006 and offers CFDs and Copy Trading, with a head office based in Cyprus and the UK. eToro offers traders two ways to trade: CFDs, Social Trading and eToro traders will need to make a minimum deposit of $200 and the platform can accommodate various levels of traders from beginner to expert.
eToro is supervised by the Financial Conduct Authority (FCA), Cyprus Securities and Exchange Commission (CySEC) regulatory bodies and has been in operation for over 14 years.
Traders can trade in a wide variety of over 100 instruments and over 50 currency pairs on eToro’s user-friendly custom trading platform which is available as a browser-based web application. eToro also offers traders mobile apps for Android and iOS, making it easier to keep an eye on and execute trades.
eToro trading accounts on offer include: Demo, Micro, Mini, Standard, STP and Islamic. eToro supports a wide range of languages including English, German, Spanish, French, and Italian. Read the full review here
Forex Brokers Comparison Table
What is a Forex Broker?
When it comes to trading in foreign currency, traders will need to make use of a forex broker, also known as a currency trading broker, to place their trades. When a trader trades in forex, they will buy or sell in currency pairs, e.g. “EUR / USD” (Euro / U.S. Dollar). Traders will need to open an account, deposit funds, then use the broker’s trading platform to buy and sell currency using margin. In a way, forex brokers connect the investors to the market and make forex trading possible.
How do Forex Brokers make money?
Forex brokers make money, mainly in three ways. They earn money through the difference of the bid and ask price(spread) or they commission they charge for using their service, clients losing their deposits or their own trading activities. Considering that 70%-90% of investors lose their money trading we can safely say that smaller brokers who cannot conduct their own trading activity or lack liquidity resources earn the most when the market goes against their clients.
Offering High leverage to traders
Spreads that forex brokers earn on small portions are negligible and cannot sustain them. To counter this, forex brokers usually offer high leverage to traders. High leverage increases both profits and losses of the trader. Most brokers usually give traders a better deal just to encourage them to trade more money. High leverage also benefits the broker especially in the event that the trader makes loses.
Trading or hedging against clients
This may come as a surprise, but that is how forex brokers make money. Some brokers trade against their own clients. Although this is unethical, it is one of the tactics that brokers use to make money and it is very profitable. If you notice that the broker is thriving when you lose, or if the spreads are too low then that is a red flag that indicates that the broker is trading against you.
Commissions charged on payment processing
Some forex brokers charge a fee for payment processing. The fee is usually small and is deducted when the trader withdraws or deposit money on their account. Of course, the commission fee is too small to make any big impact on the broker’s profits but it is good enough to cover up the broker’s expenses. However, most online brokers don’t charge payment processing commission.
Overnight charges or swap fees
Overnight swap spreads mean that the broker gets to pay the trader if the difference between interests in a particular currency pair is positive. On the other hand, if the difference between interest in a particular currency pair is negative, then the opposite happens meaning that the trader gets to pay the broker. In most cases, the overnight swap spread usually favors the broker. For instance, if a particular trader is buying EUR/USD and another trader is selling, the same amount of that particular currency pair, the first trader will earn money on overnight swaps while the second trader will lose that amount. That alone is big enough to enable the broker to compensate the first trader and still remain with a good amount.
Another brilliant technique that forex traders use to make profits is by trading by themselves. This is usually referred to as proprietary trading. One advantage that forex brokers have is access to information. They know traders who are very successful in forex trading and those who are not. If they notice that a trader is very successful, they can decide to follow the trading strategy of that particular trader but trade a higher amount. For instance, if a trader decides to trade one lot to earn a profit of $100, the broker can place 3 lots on the exact position, make $100 for the trader and earn a profit of $200 for themselves.
This can be problematic for traders as the broker might be plotting against the trader in order to make profits. This is why traders should invest their money with a trusted and regulated broker.
How To Choose the Best Forex Broker – Things To Consider
Safety and Regulation
The first and most important factor when choosing a good broker is to feel secure. Feeling secure when trading a broker is an important aspect to a trader, and should be validated before opening a trading account. The broker must be regulated by a bestspoke regulator and be part of a compensation fund. For example, NSBroker, Avatrade and Markets.com are regulated by a number of financial regulators. Their license numbers can be confirmed by their website or the regulators website. What is more, a safe and regulated broker will provide negative balance protection and guaranteed stop loss.
Best Regulated Forex Brokers
Here are the best regulated forex brokers to trade with globally:
- Markets.com – Regulated across many jurisdictions
- XM – Best Forex Broker with multiple awards across the globe
- FP Markets – Best execution and lowest spreads, Multiple Licenses
- Avatrade – Best support for new traders
- Etoro – Wolrd’s best copy trading service, Offers services in the US
- OctaFX – Great Trading Conditions, Regulated by CySEC
- NSBroker – Great Platforms and Pricing, Regulated by the FCA and BAFIN
- GlobeX360 – Best African Broker
Major regulatory bodies across the world that every Forex trader should be aware of:
- Cyprus – Cyprus Securities Exchange Commission (CySEC) – https://www.cysec.gov.cy/
- Australia – Australian Securities and Investment Commission (ASIC) – https://asic.gov.au/
- UK – Financial Conduct Authority (FCA) – https://www.fca.org.uk/
- Canada – Investment Industry Regulatory Organization of Canada (IIROC) – https://www.iiroc.ca/
- South Africa – Financial Sector Conduct Authority (FSCA) – https://www.fsca.co.za/
- Singapore – Monetary Authority of Singapore (MAS) – https://www.mas.gov.sg/
- United Arab Emirates – Dubai Multi Commodities Centre (DMCC) – https://www.dmcc.ae/
- Germany – Bundeszentrale für Finanzdienstleistungsaufsicht (Bafin) – https://www.bafin.de/
- Japan – Financial Services Agency (FSA) – https://www.fsa.go.jp/
What is Negative Balance Protection?
Negative balance protection Forex brokers simply means that if markets quickly change and go against your current trades, your account will not go into negative balance. In a way this is a safeguard provided by brokers to guarantee their traders, that no matter what they will never lose more money than their initial investment. Negative balance protection makes sure that a trader with a losing position doesn’t result in a negative balance.
It is a really important factor for new traders as they may not know how quickly the markets can change due to high volatility. This balance safeguard, in combination with other tools to manage risks, allows traders to have increased control of how much risk they have while trading the financial markets.
Best Negative Balance Protection Forex Brokers
- XM – Best Forex Broker with multiple licenses and investor protection
- FP Markets – Best execution and lowest spreads, protects clients funds
- IQOption – Regulated across many jurisdictions , offers investor protection
What is Guaranteed Stop Loss?
When trading Forex, there are times when the risk becomes very high, such as when trading with high leverage. Guaranteed Stop Loss is a tool used by traders and investors to help manage risk and limit potential losses. It effectively closes any order or position when it reaches the predetermined specified level. It is an automatic instruction on an account that is processed no matter the conditions, therefore it is considered guaranteed by the broker.
With guaranteed stop loss orders, there are a few conditions that follow the insurance of the stoppage of prices. Traders can only place guaranteed stop loss orders during trading hours. Placing the order must be at least a certain distance far away (5%) from the current price on the market. By adding the stop loss orders to an active trade, the margin necessary must be the standard margin rate set defined by the financial regulator of the broker. Outside of trading hours, traders can move the stop loss order price away from the current price on the market, but not closer.
Broker Trading and Non Trading Fees
The second most important factor is any fees that might occur during trading or when handling your money in and out of your trading account. It is important to check what type of spread a broker offers, fixed or floating, as well as to compare the amount of the spread with that of several brokers. Also, always check if there are any commission fees related to your trading activity, or if the broker requires a deposit or withdrawal fee. Furthermore, all forex brokers charge rollover or swap fees for keeping a position open over night, when the markets are closed.
Best Forex Brokers with the Tightest and Lowest Spreads
Here are the best forex brokers with low spreads to trade with globally:
- XM – Through the XM Zero account, XM offers an average spreads on the EUR/USD at 0.1 pips and other major instruments
- FP Markets – FP Markets spreads are amongst the lowest available across all major and minor currency pairs and during liquid times these industry-leading spreads can go as low as 0.0 pips
- Alpari – Alpari offers traders commission-based pricing on its PRO ECN MT4 account, and ECN MT5 accounts, added to average spreads of 0.6 and 0.3 pips, respectively for the EUR/USD.
- FXTM – With FXTM traders can enjoy very competitive spreads starting from 1.3 pips on the Standard MT4 trading account and from 0.1 pips on the ECN MT4 and ECN MT5 trading accounts
- IG – Trade spreads from 0.6 points on major FX pairs like EUR/USD, 1 point on key indices like the Germany 30 and FTSE 100, and 0.3 points on Spot Gold
- XTB – Offers its clients thtough its commission based account pro account an average spread of 0.1 across all major currency pairs
What is a low or tight spread in forex?
A low spread simply means that there is a small difference between the bid and the ask price and it is preferable for traders to trade when spreads are low like during the major forex sessions. A low spread commonly indicates that volatility is low and liquidity is high.
To cut the costs on forex procedures and trades, traders opt for dealing desks with low spreads and many traders consider this to be a key point when selecting a forex broker. Due to low spreads financial losses may decrease, which is favorable condition. Basic trading principles are to make profit and to secure personal funds. Brokers featured on this list offer traders floating and fixed spreads of different values, either on minimal or medium levels.
What is a floating spread?
A floating spread simply means that the difference between the bid and the ask price is fluctuating and is not stable or fixed, especially during major forex sessions. This shows a weakness from the forex brokers side to keep a healthy flow of liquidity for a specific instrument.
What is a fixed spread?
A fixed spread simply means that the difference between the bid and the ask price is always fixed or steady no matter the conditions in the market or any events that might affect the price of a specific asset. Very few forex brokers have the capability to offer fixed spreads to their clients.
What is a Rollover Fee or Swap?
A rollover fee, also known as swap, is a fee that brokers charge traders who maintain positions open overnight. As forex trading or also known as day trading happens during the day, any positions left open during the night must occur a fee. Leaving a position open overnight allows the trader to keep the closing rate of his position and transfer it to the next day or trading window.
The rollover fee is based on the brokers rollover rate and pricing of the instrument he is trading. Here is the formula for calculating a rollover fee or a swap : Swap = (Pip Value * Swap Rate * Number of Nights) / 10
However, there are brokers that offer swap free or otherwise known as islamic accounts to their clients, especially from muslim countries.
What is an Islamic Forex account?
Islamic accounts have a number of differences from regular forex trading accounts and whilst trading in Islam is mostly considered to be haram, it is still 100% possible to trade and the key is to find an Islamic Forex account, which offers Islamic Traders from the Muslim faith swap-free trading.
Please note – This article is not and must not be construed in any way to be a religious authority on Islamic trading and all Islamic Traders must make sure that all trading activities are halal, by consulting a religious authority.
Regular forex trading accounts will charge traders interest on specific trades, which for Islamic traders may create a problem, as making money from money, or Riba is not allowed under Sharia law. Additionally, in Islam, Gharar or gambling, is not permitted and referring to the volatility of the forex market, trading may be considered as gambling. An Islamic Forex or Swap-free account is a halal trading account which offers Islamic clients to invest in the Islamic stock market whilst following the principles of Islamic finance.
As mentioned before, Islamic trading accounts differ in several ways from regular Forex accounts and Sharia law prohibits the accumulation of interest meaning that traders with Islamic accounts do not pay or receive interest rates and currencies must be transferred from one account to another immediately, and transaction costs must be paid at the same time.
The 4 principles of Halal Forex Trading and Islamic Finance
- Prohibition of payment and receipt of any interest rate (Riba)
- Immediate exchanges in the context of trading operations
- Prohibition of gambling
- Distribution of risks and benefits
Best Forex Brokers that Offer an Islamic Account
- XM – Traders can trade in a wide variety of instruments and currency pairs over 100 instruments and over 80 currency pairs
- FP Markets – Perfect for various levels of traders including beginners and all traders can trade a wide variety of instruments and currency pairs
- OctaFX – Able to accommodate various levels of traders and has won numerous industry awards over the past 9 years. OctaFX doesn’t charge commission on CFD instruments.
- XTB – An online broker which was founded in 2002 and offers Forex, CFDs, and Cryptocurrency trading
- IC Markets – Able to accommodate various levels of traders whether they are experienced or just beginning in the trading game
- Pepperstone – One of the few brokers available that offer traders both of the MetaTrader platforms; MT4 and MT5 coupled with cTrader
Account Opening Process and Account Types
The third factor would be, to always make sure that you can easily open a trading account with the desired features in mind. In today’s fast-paced world speed and time are of the essence and best deal with a broker that is ready to accommodate your needs.
Forex Brokers today offer a variety of accounts to accomodate the needs of all their clients out there. Many offer account management services like PAMM or MAMM accounts or various account types that cover margin trading and automated trading. In many cases brokers offer ECN accounts that offer direct access to the market but always come with a commission to cover the low trading cost(spread).
Deposit and Withdrawal Methods
After verifying a brokers’ origin and regulation, the next step would be to validate the deposit and withdrawal methods available for your country of residence.
A good broker needs to demonstrate that he is capable of receiving, processing, and administrating funds on your behalf. It is also important to check what is the average transaction process time needed for your desired method of deposit and withdrawal.
Usually established brokers will offer the option to fund your account via credit card, bank transfer or e-wallets like Skrill, Neteller, and some times even using bitcoin.
Trading Platforms and Execution
A good forex trading platform, allows great automation, reduces human interference to the lowest level possible, and ensures that the broker doesn’t tamper with your trades or misquote currency prices to you.
You also need a broker that can offer the latest trading tools and analysis in order to make informed decisions and make a profit. The most well-known trading platforms currently used out there are the Metatrader 4, Metatrader 5 and cTrader.
Another thing to check is if you are dealing with a broker who is a market maker or an ECN Broker. It is important to understand how the broker behaves and if you are trading against him.
What is an ECN Forex Broker?
The term ECN Forex Brokers stands for “Electronic Communications Network” Forex Brokers, and they are considered to be the only “true brokers”. By definition, a broker is supposed to connect buyers and sellers, without participating in the transaction itself. Brokers are supposed to be only pocketing a commission. A good example to emphasize the relationship between brokers and traders would be a real estate broker, where the real estate broker has no interest in the property that is purchased or sold, however they play an active role in connecting a willing buyer and seller. This also applies in the Forex market among true ECN Forex Brokers. Their only job is to join buyers and sellers of currency, without actively managing any of the funds themselves.
ECN or Electronic Communications Network Forex Brokers is financial software that establishes a link between traders and financial institutions that provide liquidity. They allow both parties to have a direct connection, by automatically matching requests for purchasing and selling at the most suitable available price from various participants. Simply put, ECN Forex Brokers offers instant results with optimal performance and high internal liquidity, as they bridge willing buyers and sellers with the most affordable prices in the market.
Electronic Communication Network or ECN Forex Broker is a financial institution that provides streams of market depth with the best available bid and asks prices. ECN Forex Brokers usually earn its revenue from charging a commission, per trade volume. They do not make any revenue through the ask spread and they do not profit from any of its clients’ losses. True ECN Forex Brokers supply a professional trading platform where the best bid price is retrieved from its tier-1 liquidity providers. ECN Forex Brokers provide an interbank spread from 0.0 pips and charge for a fixed commission per lot. Furthermore, this particular implementation of interactions does not cause any misunderstanding between the broker and the trader, which emphasizes the transparent relationship and the trading conditions. Aside from the competitive trading costs, ECN Forex Brokers allows extended trading time, along with high efficiency for automated trading and various trading strategies.
ECN Forex Brokers are among the fastest emerging brokerage firms in the Forex market, and there is no question that new ones are constantly opening their doors. Simply put, ECN Forex Brokers provide a marketplace where traders and market participants can place competing bids against one another.
The Best ECN Forex Brokers offer traders the best trading conditions that provides an edge without any risk of broker or dealer intervention and the various advantages include that they do not pose any conflict of interest, they are cheaper due to the spreads, and they have high liquidity in all categories of traders.
Best ECN Forex Brokers
- XM – has become one of the largest and unshakable investment firms with more than 1,500,000 clients worldwide. XM is a group of online regulated brokers, and to open a live account, traders will need a minimum deposit of at least $5.
- FP Markets – was founded in 2005 and it is an Australian CFD and forex broker. It’s regulated by the Australian ASIC and the Cypriot CySEC. FP Markets offers traders a choice of two live account types one of which is a Standard commission-free, and the other a Raw account which provides tighter spreads, but also involves a commission
- AvaTrade – is one of the largest online trading platforms with approximately 200,000 registered clients who complete up to 2 million trades per month – approximately $60 billion of trading volume. AvaTrade offers traders a range of financial trading instruments including indices, commodities, shares, forex, digital currency, bonds and exchange traded funds.
- IC Markets – is a forex and CFD broker that employs a no-dealing desk, ECN broker model, operational in three jurisdictions: Australia (regulated by the ASIC), Seychelles (regulated by the SFSA), and Cyprus (regulated by the CySEC).
- IQ Option – is a forex & binary options broker with offices based in the UK, Cyprus, and the Seychelles, and regulated by the FCA and CySEC.
Financial Instruments and Products
Today most top forex brokers offer the opportunity to trade all currency pairs as well as commodities, indices, stocks, metals, and cryptocurrencies. Brokers like OctaFX, Etoro, and GlobeX360 will offer portfolio management services or copy trading, which are the most simple form of automated trading.
Brokers like IQ Option also allow their clients to still trade binary options. It is important to make sure that the broker of your choice is able to offer a variety of instruments so that you don’t miss any opportunity that might present itself due to volatility in the markets.
Educational Offering and Trading Tools
It is also important to check if the broker of your choice supports any educational materials. Trading is always changing and a good trader always needs to be educated and learning, novice or professional.
The most reliable brokers, like XTB, will offer webinars, local seminars, ebooks and a library of materials for any type of trader.
A good broker also needs to provide charting tools and all the bespoke and relevant indicators, that will allow to enhance the trading experience of their clients.
The final and most important factor is customer support. You need to make sure that a broker is accessible via all the modern means of communication and can support you 24/5 in case an issue occurs.
With all these factors in mind, you are ready to choose a broker and start trading.
Read more about our methodology and how we evaluate and create our broker reviews here.
6 Reasons to Choose Forex Trading
There is a number of reasons why someone should consider forex trading over trading stocks or any other form of non leveraged trading.
To begin with, the forex market is considered the world’s largest liquid market to date, in terms of daily trading volume and turnover.
Forex is highly accessible given that it’s open 24/5 , and investors can make use of far more leverage than they could by trading stocks.
The Market Never Sleeps
The forex market is available to retail traders 24 hours a day, excluding weekends. As there are always traders who are looking to buy or sell the market has a significant high level of liquidity. High liquidity corresponds to lower trading costs, otherwise known as spreads.
According to The Balance, each forex exchange is open on a weekly basis from Monday through Friday and has unique trading hours. Traders should only be concerned about these four important time windows (all times are shown in Eastern Standard Time):
- London: 3 a.m. to 12 p.m. (noon)
- New York: 8 a.m. to 5 p.m.
- Sydney: 5 p.m. to 2 a.m. (midnight)
- Tokyo: 7 p.m. to 4 a.m.3
While each exchange functions independently, they all trade the same currencies. Consequently, when two exchanges are open, the number of traders actively buying and selling a given currency dramatically increases. That increases liquidity and volatility at the same time. The bids and asks in one forex market exchange immediately impact bids and asks on all other open exchanges, reducing market spreads and increasing volatility. This is certainly the case in the following trading windows:
- 8 a.m. to noon, with both New York and London exchanges open
- 7 p.m. to 2 a.m., with both Tokyo and Sydney exchanges open
- 3 a.m. to 4 a.m., with both Tokyo and London exchanges open
The most favorable trading time is the 8 a.m. to noon overlap of New York and London exchanges. These two trading centers account for more than 50% of all forex trades. On the flipside, from 5 p.m. to 6 p.m., trading mostly happens in the Singapore and Sydney exchanges, where there is far less volume than during the London and New York window.
There can be exceptions, and the expected trading volume is based on the assumption that no major news developments come to light. Political or military crises that develop during otherwise slow trading hours could potentially spike volatility and trading volume.
Day traders and investors usually prefer forex trading because they get access to high leverage. Leverage is like a loan from the broker and allows traders to potentially enjoy greater returns. However, leverage is a double edged sword and it also means traders they might experience greater lossess too. Please advise a qualified financial professional before using high leverage.
What does 500:1 Leverage mean?
If a trader has access to 500:1 leverage, he can make a $1,000,000 trade with just $2,000 in margin.
Best High Leverge Forex Brokers
- FBS – Offering Leverage 3000:1
- FXTM – Offering Leverage 1000:1
- Hotforex – Offering Leverage 1000:1
- XM – Offering Leverage 888:1
Automated Trading and Copy Trading
You don’t need to spend extended periods of time in front of your PC studying diagrams and following all the price movements. With automatic indicators and signals you will be advised promptly of any significant events or trend reversals. Auto trading will enable you to carry out many more trades in a small amount of time, and takes the emotion out of your trading decisions.
Besides using services like Zulutrade or Duplitrade, many forex brokers support and allow the implementation of custom Metatrader scripts and Expert Advisors on both their custom platforms and the metatrader platforms, to allow traders to enjoy automated trading. This can be done using a Virtual Private Server (VPS).
What is VPS Trading?
A Virtual Private Server or VPS can be seen as the traders personal playground and computer, where he can execute his trades with much more ease. A VPS is permanently connected to the internet, which creates a safer and more stable trading environment.
Facing difficulties such as computer viruses, connection failures and power cuts can be absolutely detrimental to a trading. Using a VPS can eliminate these issues, making it an ideal technical environment for automated trading.
Forex Copy Trading
When new traders start Forex trading, they are usually overwhelmed with all the data and information available in the market. Copy trading is a method that provides an easy way for new traders to adapt faster, by following and copying successful trading signals from experienced traders.
The ascent of copy trading – also known as social trading, mirror trading, or auto trading – has been ongoing for over a decade. Thanks to social media and an increasingly faster web, financial news and market analysis propagate at lightning speed.
The idea of copy trading is simple: use technology to copy the real-time forex trades (forex signals) of other live investors (forex trading system providers) you want to follow. This way, every time they trade, you can automatically replicate (copy) their trades in your brokerage account.
What Is Copy Trading?
Copy trading is a Forex trading method that enables traders in the financial markets, to automatically copy the trades of a selected trader of their choice through a social trading network. This method differs from mirror trading, as it allows traders to copy specified traders and not trading strategies. Also, when copy trading, copy traders usually get charged a small fee for using the service.
Thus, any trading action made by the copied investor once confirmed, such as opening and closing a position or even assigning stop loss and take profit orders, are also executed in the copying trader’s account. Nevertheless, the copying trader always retains the ability to disengage with copied trades and manage them himself.
Eventually, the concept of copy trading has led to the development of a new type of investment portfolio, called People Based Portfolios or Signal Portfolios. People based portfolios main difference from traditional investment portfolios in that investors invest in other investors, instead of the traditional market-based instruments and products.
How to Choose the Right Copy Trading Platform?
Copy trading has developed into an extremely popular product, with both new and experienced traders. As traders’ psychology and sentiment dictates, new traders need the ability to observe the experts and verify their trading strategy and decisions. On the other hand, experienced traders love to share and brag about their successful ideas and trades. By doing so they get to increase their followers and investors base, which leads to more profits by every copied trade.
When choosing a copy trading platform, you need to make sure that the platform is well known and has a strong user base. A good platform will offer you the opportunity to copy as many traders as you like, charging a reasonable fee. It is also important to check the performance of the traders involved with the platform, the advice they offer, and the risk exposure of their trades. After all, copy trading is all about the people involved in it.
Is copy trading legal?
Copy trading is legal in most countries, and depends on if the broker itself is properly regulated.
How does copy trading work?
With copy trading, a signal provider shares real-time trades with other traders and when using a copy trading platform users can automatically copy the trades of the signal provider in real-time.
Can a trader make money by copying trades?
Like with any investment can both make money or lose money through copy trading. The idea with copy trading is that a trader can assess the profitability of each trader before choosing which signal provider they choose to follow. Copy trading is risky, and many traders do end up losing money. Traders should only invest what they are willing to lose and start with a small investment, and do thorough research before committing to a strategy.
How to choose the best trading system to copy trade?
The best trading system to copy won’t necessarily the most profitable and it is crucial for traders to align their risk-parameters with the strategy that best suit their investment goals. A more conservative investor may for instance choose a system with a lower average loss per trade, relative to the average profit. A more aggressive investor – a strategy which has higher volatility and higher risk for losses.
Best Forex Brokers that Offer Copy Trading
- eToro – Is an online broker which was founded in 2006 and offers CFDs and Social Trading, with a head office based in Cyprus, UK. eToro offers traders two ways to trade: CFDs, Social Trading and eToro traders will need to make a minimum deposit of $200 and the platform can accommodate various levels of traders from beginner to expert
- Globex360 – Is an online trading provider that was founded in 2017, with a primary focus on the continent of Africa. Throughout the span of two years, it has become one of the leading online brokerage firms that accepts clients from all over the world
- Darwinex – Was founded in 2012 and is regulated in one tier-1 jurisdiction, making it a safe broker of average-risk for forex and CFDs trading. Darwinex offers forex traders with a unique social copy trading community to buy and sell trader-developed strategies
- OctaFX – Is a global online broker which was founded in 2011 and offers Forex trading and for those who are looking to make a start, a minimum deposit of $5
- FBS – Is a popular international broker and offers clients competitive trading conditions, a wide range of trading accounts, payment methods, a choice of fixed and variable spreads, Metatrader 4 and MetaTrader 5, as well as various promotions
- FXTM – offers good range selection of markets and account features, with trading platforms which include MT4 and MT5. It offers their clients convenience by means of separate accounts for Forex trading and Invest Accounts in the form of 6 account types
- Zulutrade – Is a copy trading or signal providing service powered by AAA Trade and is based in Greece. This services connects to almost all forex brrokers out there and allows its users to copy strategies from multiple brokers and risk strategies at the same time.
Training For Beginners
Some Forex brokers provides demo-accounts, training courses, video tutorials and charts so that you can practice your trading skills and won’t have the risk of losing any money.
The best forex brokers for beginners will need to offer traders three essential benefits. The first, and most significant will be that they are a regulated and trusted brand that offers a user-friendly web-based platform and a solid reputation. Secondly, a strong variety of educational resources will need to be on offer to assist new traders to understand terms, conditions and strategies that are a part of the Forex Market. Third, but not least – access to quality market research.
Best Forex Brokers For Beginners
Is a trusted globally recognized brand with a user-friendly platform on offer. Plus500 is a good choice for beginner traders as it is generally reported to be a user-friendly broker by its clients and the company offers an educational section called the Trader’s Guide, which includes videos that can help traders get started. Plus500 also offers a comprehensive Risk Management section which explains to traders how to best mitigate their risks while trading.
Offers beginner traders a selection of great educational materials and traders can make use of demo accounts, participate in webinars and read educational content. With Pepperstone, traders can learn in the following ways: Demo Account, Webinars, Platform tutorial videos, Quality educational articles, Trading Glossary
What makes the XM platform perfect for Beginners is the wealth of training and educational materials on offer. The platform hosts regular webinars specifically focussed at beginners and is inherently social, which encourages users to learn from the team of instructors. The company also published research and technical analysis
eToro’s Social trading is perfectly suited to users who don’t have previous experience in trading and beginners can copy trades of more experienced traders in a quick, easy and straight-forward way using the platform.
Offers traders a wide-ranging list of tradeable products, outstanding trading and research tools, industry-leading education, and competitive rates. IG‘s web trading platform is well designed, user-friendly and easy to customize making it perfect for beginner-traders to use.
Its excellent educational content is great for beginners and tools available include educational videos, and webinars.
Publishes webinars and seminars to help beginner traders get their start in the market and has also made available a detailed eBook. Additionally, the analysis blog and TradingView analysis tools offer a new perspectives on currency markets.
Provides users a simple, straight-forward and transparent trading platform which perfectly suited to both beginner and advanced traders alike. Users can easily access commission-free trading on a wide range of markets, plus advanced trader tools for the MetaTrader trading platform.
The perfect choice for those just making a start in the market and has excellent customer service on offer to ensure that they are available to especially beginner-traders plus a great offering of educational materials.
You Always Stand A Chance To Earn
Stock markets can crash yet when one currency is depreciating, the other will pick up worth and you can earn on that as well.
Low Entry Point – Cent or Micro Trading
As forex trading allows the use of leverage, investors can start trading the market with very small amounts using a cent or micro account. This makes the market accessible to all types of investors.
What Is A Cent or Micro Account?
A Cent or Micro Account is a forex trading account that denominates the amount deposited into cents. If you make a deposit of five dollars($5) into your account, the balance will be five hundred (500) cents.
Actually, there is not much difference between how a Cent Account works and how traditional trading accounts work. The main difference is that this type of account allows a trader to trade micro and nano lots.
Cent accounts are known for their accuracy in deposits, since they display and provide the balance of funds in cents. One of the main advantages of using a cent account, is that new traders can experience forex trading or test new trading strategies without much risk.
Why Use a Cent or Micro Account?
Cent accounts tend to have minimum deposits of around $5 to $10. This can provide quick and easy access to live trading and to the different financial instruments. Cent Accounts represent a smooth transition from demo Forex accounts before starting to trade larger amounts.
It is designed with smaller depositors in mind and those that are relatively new to Forex trading.. Traders can also test out strategies without spending great amounts of money, too. In fact, they make a great starting point, giving users a real experience with real money, as well as an insight to the psychology behind trading Forex. The trading environment is also much simpler with a Cent Account, and easier to get used to, as well.
Cent accounts usually have instant execution speed and operate efficiently and effectively. You would appreciate the speed of execution of trading operations, and the fact that it would help you to further understand the trading industry. It gives the trader a feel of the trading environment, without being exposed to extreme financial risk, also allowing them to experience how to make sound trading decisions.
LiteForex was the first Cent account Forex broker to offer the accounts back in 2006. It was initially created to help to develop and test trade systems. LiteForex introduced the Cent account and allowed traders to virtually experience trading, without actually losing any money. However, LiteForex is not the only broker that offers Cent account at the moment; there are many financial services providers that give the option for traders, as mentioned above. OctaFX for example offers very fast execution and a variety of instruments to trade on their cent account.
Best Forex Brokers with Cent or Micro Accounts
- XM – Low Spreads , Fast Execution, Minimum deposit of $5
- OctaFX – Great execution, Minimum deposit of $5
- FXTM – Excellent trading conditions with a minimum deposit of $10
- IQOption – Trade a variety of instruments with just $10
How to Avoid Forex Scams
The Forex Market trades an unbelievable volume of trillions of millions of dollars every day. This creates the opportunity for creating wealth or falling a victim of a forex scam. We made a significant effort to exclude any brokers that have been reported for forex scams in our reviews and listings in order to help you mke a better decision.
However, as a potential investor you should check the following before opening an account with a potential forex broker:
- Is the broker of interest regulated? If regulated, how trustworthy is the regulatory body?Is it one of the big regulators mentioned in this artcle?
- Were you cold called and offered unrealistic profits or rewards for opening an account with them? This should raise an alarm
- Is the broker offering a cash bonus for opening an account? Can you easily use it? Can you withdraw the profits? How?
- Are they offering to trade on your behalf or offer advise on how to trade? Regulated forex brokers are not allowed to do that
- Is any credible information about the company mentioned on its website, such as company history and a valid address? Does it publish an audit on its operations and execution time as required by major regulatory bodies?
- Did the broker win any awards? Can they be confirmed and authenticated?
Many brokers will try to scam potential inestors with promises of quick profits and extravagant bonuses. This is common practise for brokers that either don’t have a licesense at all, or have only an offshore license at a sunny island somewhere in the middle of the ocean.
Unregulated Forex Brokers to Avoid
- Tradersway – Offshore License only
- Prime XBT – Offshore License only
- Binomo – Offshore License only
- MGM Markets – No License
- Blue Trading – No License
- JustForex – Offshore License only
- TradeFTM – No License
- HugosWay – Offshore Licesne only
- Capoinvest – No License
- RoyalGTX – No License
What is a forex broker?
Forex brokers are firms that furnish dealers with access to a stage that permits them to purchase and sell foreign currencies.
What is a forex regulation?
Fx brokers with more than one regulator should be considered above brokers with just one. One of the most important things to consider before choosing a forex broker, is the brokers regulation.
Which forex trading platforms are good?
A good forex trading platform, allows great automation, reduces human interference to the lowest level possible, and ensures that the broker doesn’t temper with your trade or misquote currency prices to you. The most well known trading platforms currently used out there are the Metatrader 4 and Metatrader 5.
How many forex account types are there?
Various brokers offer a large number of account types, designed for the many types of traders and their trading styles.
Is Forex a good investment?
Forex is not considered a pure investment but it does provides a good opportunity to make money.
How do I know if my forex broker is regulated?
It is very important to use a well-known and regulated broker in order to avoid forex scams. To check if your forex broker is regulated, first identify the registration number from the disclosure text at the bottom of the broker’s homepage.
How do I choose a forex broker?
Here are three things to help you choose an online broker for forex trading. First, make sure your broker is properly regulated. Next, compare the trading platforms, tools, and investment research provided by each broker. Finally, read forex broker reviews to compare pricing and product offerings.