Trading forex, which involves exchanging one currency for another on the foreign exchange market, isn’t for the faint of heart or the inexperienced.
No investment is without risk, but forex trading tips the risk meter further with its rapid trading pace and high leverage, which means investors can quickly lose more than their initial investments. Of course, that means you can also profit at the same speed, which — combined with liquidity — is what attracts investors to currency trading.
When selecting your forex broker, you should consider trading platforms and tools, the number of currency pairs offered, leverage maximums, customer service and, of course, costs. But comparing costs is tricky in forex trading: While some brokers charge a commission, many advertise no commissions, earning money in the bid-ask spread — the difference between the price a broker or dealer is paying for the currency (the bid) and the price at which a broker or dealer is selling a currency (the ask). Brokers essentially roll their fees into that spread, widening it and pocketing the excess.
That’s just one reason why the search for the best forex broker is complex. Another is that there are a variety of brokers, many of them unregulated or regulated in countries outside of the U.S. For our list of best currency trading brokers, we considered only those that are regulated by the National Futures Association and the Commodity Futures Trading Commission.
If you’re aware of the risks and still prepared to dive in, here are NerdWallet’s top picks for the best brokers for forex trading. (Thinking you want to dive out instead? Trading stocks might be more your speed — here are the best brokers for that.)
One suggestion: All of these brokers offer free demo accounts so you can test the market with virtual dollars. Dip a toe in with some play money before using your own cash.
Best online brokers for trading forex
Commission: 0.08 - 0.2 basis points, depending on trade volume.
Currency pairs: 105
Account minimum: $0
Commission: Spread markup
Currency pairs: 75
Account minimum: $0
Commission: Spread markup
Currency pairs: 80
Account minimum: $250
Commission: Choice of spread markup or commission account. Commissions are $5 per 100,000 traded per side. Trade sizes under or over 100,000 are charged on a pro rata basis with a minimum of $0.01 per trade.
Currency pairs: 70
Account minimum: $0
Commission: Choice of spread markup or commission account. Commissions are $5 per 100,000 traded per side.
Currency pairs: 80+
Account minimum: $50
Commission: $0.60 for 10,000 traded; $6 for 100,000 traded. Commissions charged round turn.
Currency pairs: 38
Account minimum: $2,000
Disclosure: The author held no positions in the aforementioned securities at the time of publication.
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