Forex trading, 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 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 a complex one. Another is that there are a variety of brokers out there, many of them unregulated or only 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 here and still prepared to dive in, here are NerdWallet’s top picks for the best brokers for forex trading. 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 you dive in with your own cash.
Best brokers for forex trading overall
The best currency traders combine value with selection and high-quality tools, and OandA and Forex.com hit all those notes. Each offers a wide range of currency pairs, low account minimum, the maximum legal leverage of 50:1 and low minimum trade lots. Both brokers offer spread markups, but OandA just recently moved to also offering commissions and at an attractive rate, $50 per million units. Each broker offers multiple trading platforms, including the popular MetaTrader 4. The brokers also offer Sunday-to-Friday customer support, with Forex.com opening a few hours earlier on Sunday and staying a few hours later on Friday than OandA.
In many respects OandA and Forex.com are evenly matched, but here are a few things that set them apart. Spreads are an important part of the cost equation for forex traders, so it’s important to keep those as narrow as possible. On this score, OandA consistently had the lowest spreads in our analysis, which compared forex brokers’ live spreads on the seven major currency pairs over the course of a week. Its recent addition of commission pricing should be more customer-friendly, too. Forex.com’s spreads were not too far behind in second place, but even small spread differences add up for active traders. On its side, Forex.com should appeal to active traders with its recently introduced cash rebate program, part of what has made the number one forex broker by client assets as of November 2017.
Best brokers for beginner currency traders
These brokers stand out for their educational resources and trader support.
- See our Ally Invest review.
- Commission: Spread markup
- Maximum leverage: 50:1
- Account minimum: $500
- Currency pairs: 50
- Minimum trade lot: 1,000, if using MetaTrader platform
If you’re just jumping into the forex market, you want a broker that can provide educational resources and customer support to get you started. Forex.com has broad customer support, along with a wealth of videos, webinars and guides to help you learn the basics. But even though Forex.com is listed as best for beginners, don’t think it’s not a high-calibre option for experts, too.
Most forex brokers offer 24-hour trader support five days a week, Sunday at 5 p.m. Eastern time through Friday at 5 p.m. Eastern. But Forex.com gets started at Sunday 10 a.m. and runs through Friday midnight. Costs may be slightly higher here — Forex.com exclusively uses spread markups that came out a bit wider than the competition in some of our tests. The company also charges accounts with one year of no trading activity or open positions a $15 monthly data fee; customers can opt to temporarily disable the account to avoid that fee. One note: Forex.com is owned by GAIN Capital, which also provides services to Ally.
Ally also provides useful educational resources and support for beginners, and forex traders can piggyback on Ally’s reputation for customer service. Ally is a good pick if you’ve already got an account there and are looking to trade multiple products in a single place (stocks, options, currency and others), or would simply like to try your hand at currency trading. Ally uses a spread markup, and its spreads were consistently above those of Forex.com and OandA. Ally functions as an introducing broker to GAIN Capital, which acts as the account holder and trade counterparty at Ally Invest, and so Ally likely must pass on an additional layer of costs, via a wider spread, to its own traders.
Best forex trading platforms and tools
TD Ameritrade offers a choice of high-quality trade platforms and advanced tools.
- See our TD Ameritrade review.
- Commission: Both spread markup and commission ($1 minimum; $0.10/1,000 units), depending on currency
- Maximum leverage: 50:1
- Account minimum: $0
- Currency pairs: 70
- Minimum trade lot: 1,000 for commission pairs; 10,000 for spread markup pairs
TD Ameritrade is hard to beat with its much-loved thinkorswim trading platform, which allows users to trade not just currency, but also a range of other investment products. The platform is professional-level, with advanced technical analysis capabilities and the ability to create custom forex pairs, and TD Ameritrade has an equally robust mobile app, Mobile Trader. Thinkorswim also offers up $200,000 of play money for practice with its paperMoney feature. One drawback: The platform is advanced enough that new traders can easily get overwhelmed.
In addition to all the other positives that made it one of our best overall picks, Forex.com offers a number of platforms for traders, allowing users to choose the one they’re most comfortable with. In addition to offering MetaTrader 4, the broker also offers its flagship platform FOREXTrader, which is available in browser, desktop and mobile versions. Forex.com also just added the Ninja Trader platform to its line-up as well as TradingView for users to chart currencies, provide technical analysis and develop a trading plan.
Best brokers for low-cost forex trading
In our analysis, these brokers offered the most value.
The costs associated with forex trading can be hard to suss out, as we noted earlier. Low-volume traders can often save money with a broker that marks up its spreads but charges no commissions, as long as those markups are competitive. OandA publishes both live and historical spreads on its website, and came out the clear winner in our analysis for the lowest spreads on major pairs. While the company charges a monthly inactivity fee of $10, it only kicks in after a year of no activity, so it’s hardly a dealbreaker.
High-volume traders may benefit from a commission-only broker. On this count, ATC Brokers’ flat commission pricing looks like a clear winner. The company prices its commission round turn (in other words, for both sides, when you buy and sell) and charges $1.00 per 10,000 units. One caveat: Though the broker allows trades as small as 1,000 units, that $1.00 is a minimum commission.
Summary: best forex brokers
Overall + low costs
Low spread, no trade minimum
Both spread markup and commission ($50 per one million units)
Strong customer support, two powerful platforms trade a range of investment products
Both spread markup and commission ($1 minimum; $0.10/1,000 units per side), depending on currency.
Strong customer support, wealth of educational resources, varied platforms
Strong customer service, education components
$500 ($3,000 recommended to trade full range of products)
Round-turn pricing and low costs
$1 per 10,000 units, round turn
Updated April 9, 2018