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5 Best Forex Brokers for 2022

st_lux/Getty Images/iStockphoto

st_lux/Getty Images/iStockphoto

Currency trading, or forex, is the process of exchanging one currency for another and hopefully making a profit doing so. It is a complex combination of art and science that is only suitable for experienced investors. Forex is a fast-paced business that can turn on a penny – or a penny or a peso.

If you decide to get into forex, it is important to choose the right broker.

Compare brokers

Forex is all about trading, so consider how you will trade when choosing a broker. If you trade in many different currency pairs, this may be your criteria for choosing a broker. Or you can research the broker that gives you the greatest leverage. For most forex traders, it’s all about the platform, and that’s where the biggest differences between brokers can be seen. Testing a few platforms will give you the best idea of ​​which broker offers the features you like.

Currency pairs

When you trade forex, you are exchanging the currency of one country for that of another. These exchanges are done in pairs. For example, you could exchange British Pounds for US Dollars, an exchange that would be expressed in GBP/USD. Or you can exchange Swiss Francs for Hungarian Forints – an exchange expressed in CHF/HUF. Each broker offers a fixed number of currency pairs, and some offer more than others. If you want the ability to trade a large number of different currencies, look for the broker that offers the most currency pairs.

Trading platforms

Each forex broker has its own trading platform. Many offer access to research, the ability to plot results to predict trends and test strategies. Ultimately, the best way to choose a platform is to test it. Most brokers offer trial access to their trading platform so you can try it out.

Maximum leverage

Forex traders use margin or leverage, so they can trade more value than their account balance. The leverage offered by forex brokers is often higher than for stock trading or futures trading. Remember that leverage increases risk in forex, which is already inherently risky. So, the forex broker that offers the highest maximum leverage is not necessarily the best broker for you.

Costs

There are two ways forex brokers make money: commission and profit margin. Some brokers charge a commission on each trade, which is usually a fixed dollar amount or a percentage of the trade. Others make money by marking up the spread, which is the difference between the price they pay for the currency – the bid – and the price at which they sell it – the ask. It can be difficult to compare prices between brokers that mark up the spread – you may need to do a few trades on the demo platforms to figure this out.

Best Forex Brokers

The biggest differentiator between forex brokers is the trading platform, and that’s more a function of personal taste than anything else. However, the brokers with the most bells and whistles are more likely to have the features you want. That said, here are the top five forex brokers for 2022.

TD Ameritrade

TD Ameritrade clients trade on their thinkorswim platform, which includes capabilities on stocks, futures and forex. The platform is available in web, desktop, and mobile versions. In addition to 24/7 support, traders have access to the wisdom of other traders in discussion forums, on social media, and in on-demand workshops and webinars.

TD Ameritrade offers over 70 currency pairs. TD Ameritrade does not charge commissions, but earns money on the spread. The maximum margin is 50:1 for major pairs – such as USD, EUR and JPY and 20:1 for minor pairs.

Interactive brokers

Interactive Brokers offers a forex trading platform called FXTrader, with detailed trading information for every currency pair you watch. Ascending prices are shown in green and descending prices in orange, for a visual representation of the real-time forex market. 20 different order types including limit if hit, trailing stop limits, one cancel all and more.

Interactive Brokers offers over 100 currency pairs. A commission is charged on each transaction, from 0.08 to 0.20 basis points times the size of the transaction. Margin requirements are determined for each currency and range from 1:1 to 50:1.

Ally Invest

Ally Invest offers three forex trading platforms. The advanced desktop platform offers a customizable interface, charting functionality with over 80 technical indicators, and order management features. The online trading platform is accessible from anywhere, with real-time quotes and instant position, margin and account balances. The mobile app allows for easy trade entry with advanced order types, charting tools, and real-time news.

Ally Invest offers over 80 currency pairs. Commissions are not charged on trades, but Ally is compensated through the spread. Margin requirements vary by currency pair and range from 1:1 to 50:1.

Oanda

Oanda is a pure-play forex trading platform – forex is all they do. The OANDA trading platform offers desktop, web, and mobile options. The web-based platform offers robust technical analysis and analysis tools. The desktop platform is fully customizable with one-click trading. The mobile app is also customizable and includes mapping features and real-time news and analysis. You can add the MetaTrader4 platform to automate your strategies and get expert advice.

Oanda offers over 70 currency pairs. Margin ratios vary per pair and range from 4:1 to 50:1.

Oanda offers new customers a welcome bonus of $500 when you open an account and deposit at least $500, or up to $5,000 when you deposit at least $50,000. You must meet minimum trading volume requirements of $50,000 for deposits up to $50,000 and $15,000,000 for deposits of $50,000 or more.

Oanda’s Advanced Trader program offers cash back or commission discounts with minimum deposit and trading requirements. For example, if you have a balance of $10,000 or net deposits of $10,000 in a calendar year and you trade more than $10 million per month, you can get a discount or commission reduction of $5 per million traded. Advanced traders also benefit from premium account services, a dedicated relationship manager, and other features.

Forex.com

Forex.com claims to be the number one US broker for forex trading by client assets and has been serving forex traders in the US since 2001. It is a forex-specific platform, although the company belongs to StoneX Group, Inc.

Forex.com offers an online trading platform with built-in tools, market analysis, advanced charting features, and seamless account management. The mobile trading platform lets you trade anywhere and supports multiple order types and real-time alerts. Forex.com also offers MT4 applications.

Forex.com offers over 80 currency pairs. Customers can choose from 3 different account types. The standard account uses spread pricing and there is a MetaTrader option. The commission account, as the name suggests, offers commission-based transactions. The STP Pro account is recommended for high volume traders. There is no MetaTrader option on commission or STP Pro accounts.

The Forex.com Active Trader Program offers cashback of up to 15%, up to $10 per million traded. You can also earn up to 1% interest on your average daily available margin balance. Active traders also benefit from the support of a dedicated market strategist, no wire transfer fees and more.

Carry

Forex trading is risky, complex and exciting. If you feel like you’re ready to take the plunge, test drive some of these rigs to find the one that’s right for you, then buckle up and enjoy the ride!

Joel Anderson contributed to the reporting of this article.

Information is accurate as of June 19, 2022.

This article originally appeared on GOBankingRates.com: 5 Best Forex Brokers for 2022

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