5 Best Forex Brokers for U.S. Clients (Tops Options & More) • Benzinga - Benzinga
Finding the best forex brokers for US clients isn't always easy. With a rich history and the reserve currency to back it up, it is no secret that the U.S. financial market stands out as the most lucrative in the world.
Over the decades, it attracted companies providing financial services under the watchful eye of regulatory agencies. For clients, this resulted in a more limited but higher quality selection of brokers compared to the rest of the world — this article explores the best forex brokers for U.S. clients.
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Quicklook: Best Forex Brokers for U.S. Clients
5 Best FX Brokers for U.S. Clients
U.S. clients have fewer options when choosing a forex broker because of tighter regulations. The following list demonstrates several of the best forex brokers for U.S. clients.
FOREX.com
A specialized global broker established in 2001 under an umbrella of StoneX Group Inc, FOREX.com is listed on the Nasdaq stock exchange under the ticker SNEX. Forex.com has a long and successful track record and adheres to regulations from multiple financial authorities globally.
Best for: Pure forex traders
Website: https://www.forex.com/
Special Features:
- Comprehensive educational library
Benefits:
- Low fees
- Great selection of forex pairs
- Variety of research tools
Disadvantages:
- No negative balance protection
- Non-user-friendly desktop platform
More DetailsAccount Minimum
$100
Pairs Offered
80+
IG Markets
A U.K. broker established in 1974, IG Markets is one of the biggest contract-for-difference (CFD) providers in the world. IG Markets is part of the IG Group and is listed on the London Stock Exchange under the ticker IGG. It accepts U.S. clients for forex trading although not for other types of trading.
Best for: Novice traders
Website: https://www.ig.com/
Special Features:
- User-friendly web and mobile trading platform
Benefits:
- Excellent trading platform
- Superb educational tools
- Plenty of deposit and withdrawal options
Disadvantages:
- High fees on forex and CFDs
- Inactivity fees
- Slow customer support
More DetailsAccount Minimum
$250
Pairs Offered
87
TD Ameritrade
An American stockbroker company with 50 years of tradition in the financial services sector, this broker is scheduled to integrate into Charles Schwab Corporation by 2023.
Best for: Multi-asset traders
Website: https://www.tdameritrade.com/
Special Features:
- Thinkorswim platform — one of the best desktop trading platforms ever created
Benefits:
- A broad selection of research and trading tools
- Commission-free trading with no hidden fees
Disadvantages:
- No web-based platform
- Limited deposit and withdrawal options
More DetailsPromotion
$600 cash & free trades for 60 days
Interactive Brokers
An American multinational brokerage firm operating the largest electronic trading platform in the U.S., Interactive Brokers is one of the most regulated financial companies in the world and is listed on the Nasdaq stock exchange under the ticker IBKR.
Best for: Professional investors
Website: https://www.interactivebrokers.com
Special Features:
- More regulated globally than any other broker
Benefits:
- Extensive product offering
- Low fees
Disadvantages:
- Desktop platform confusing for beginners
- Lack of forex charts on the web platform
More DetailsPromotion
$200 refer-a-friend bonus
eToro
This Israeli fintech company, established in 2007, serves a global market. It is regulated by the Financial Conduct Authority (FCA), Australian Securities and Investment Commission (ASIC) and Cyprus Securities and Exchange Commission (CySEC).
Best for: Traders who enjoy the social trading aspects and trade cryptocurrencies
Website: https://www.etoro.com/
Special Features:
- Social trading allows copying strategies of other traders
Benefits:
- Fast account creation
- Free stock and ETF trading
Disadvantages:
- High non-trading fees
- One account base currency
- Below-average customer service
More DetailsAccount Minimum
$50 USD
Pairs Offered
47
eToro USA LLC; Investments are subject to market risk, including the possible loss of principal.
What is a U.S. Forex Broker?
A U.S. forex broker is a financial services company that facilitates buying and selling foreign currencies for individual or business clients. The U.S. forex broker might operate globally, but it has a license from U.S. regulators to conduct business in the U.S. This license is one of the highest-esteemed regulatory licenses in the world.
How Does a U.S. Forex Broker Work?
U.S. forex brokers work similarly to other forex brokers globally. They provide platforms that allow their clients to access the currency markets. However, U.S. forex brokers go through significant regulatory scrutiny by the agencies like the National Futures Association (NFA) or the Commodity Futures Trading Commission (CFTC). These agencies conduct due diligence, enforce capital requirements and adhere to other regulatory standards. Those standards include limitations to risk with 50:1 leverage for major currencies or 20:1 for minor and a steep capital requirement of $20 million.
How to Choose a U.S. Forex Broker
Traders should consider several critical features before choosing their U.S. forex broker. Consider the following:
Account Features
These features consider the baseline for the operational requirement you might have when starting to trade forex with a U.S. broker.
Initial Deposit
Initial deposits usually have a minimum threshold. If you want to dip your toes in the forex market and start small, pay attention to brokers with favorably low minimum deposits.
Leverage and Margin
Leverage, aka margin trading, is the ability to take outsized trades by borrowing funds from the broker. Some offshore brokers offer extraordinary leverage of up to 1:1000, but in the U.S., this number is limited to 1:50. You can trade by using as little as a 2% margin, which is adequate for most traders.
Commission and Spreads
Commissions and spreads fall into the fee category — the broker makes money from these charges. The commission is a volume-based fee, while the spread is the broker's markup on buying or selling price.
Choosing between those often depends on your trading style. If you're a short-term trader (scalper), you might prefer commissions since a higher spread might diminish your profitability.
Ability to Easily Deposit and Withdraw Funds
Withdrawing and depositing funds is all about convenience. The brokers usually offer bank transfers and credit cards, but If you have a particular payment service you prefer, make sure it is available.
Regulatory Compliance and Reputation
Regulatory compliance is the first step toward trustworthiness and building reputation. Yet, what takes years to build might take only days to destroy. The U.S. forex community is well-connected, and negative broker feedback spreads fast through forums and social media.
Currency Pair Offers
Currency pairs are the bread-and-butter product for any forex broker. Although virtually all brokers offer the few most popular pairs (majors), pay attention to their minor currency listings, especially the less-popular pairs known as exotics.
Trading Tools
Quality software is the cornerstone of any trading operation. While some traders use a naked chart and follow only price action, others might require the assistance of complex trading tools like multi-timeframe indicators or expert advisors (EAs). Make sure that the selected broker meets your requirements.
Customer Service
Customer service is like an emergency kit. You might not realize it is there until it becomes the most important thing in the world. Quality customer service provides peace of mind, so keep an eye on its ratings.
The Enduring Nature of Forex
Forex might not be the most popular asset class in the U.S., but it is one of the largest markets in the world. As long as there are different nations and cultures on the planet, a diversity of currencies will exist.
You will find opportunities to speculate in that environment, starting with opening a broker account. While there are many good forex brokers, choosing one will ultimately depend on evaluating your individual needs. Take your forex trading a step further with these best forex brokers for U.S. clients.
Frequently Asked Questions
Questions & Answers
Q
Why do most forex brokers not accept U.S. clients?
A
The U.S. market is heavily regulated. While European regulatory requirements might be from $100,000 to $500,000, the National Futures Association (NFA) has a capital requirement of $20 million for a U.S.-based forex broker — representing a significant hurdle for many global brokers.
Q
How do I know if a forex broker is trusted?
A
There are multiple ways you can protect yourself from a fraudulent broker. Regulation should be a preliminary factor in the research. It might not be a guarantee, but a lack of it is a clear red flag. You should check online communities and read traders' reviews and complaints. Stick to public communities like forums and beware of biased commentary from either side. You can also check the Financial Industry Regulatory Authority (FINRA) and browse its database. Finally, factor in word of mouth. If you talk to other traders, ask for direct opinions and listen to their experiences.
Q
Can I trade forex without a broker?
A
Trading forex without a broker is possible. You can do this by having bank accounts in multiple currencies and then swapping between them or using P2P currency exchange platforms. Finally, even going to a physical money exchange is an act of trading forex. However, these options are not as practical and come with higher fees.
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