Best FOREX Brokers for Scalping - 2024 Guide
With many years of meticulous FOREX broker testing, Arincen stands out as a voice of authority. Our analyses, shaped by exhaustive data collection, are trusted by many. Each year, we gather 120 data points from more than 100 brokers. Our team of more than 20 people collaborate extensively to produce high-quality broker reviews like this one. For a detailed explanation of how we test brokers, navigate to the bottom of this article.
Choosing the best online FOREX broker that offers excellent scalping features starts with assessing the broker’s overall value proposition. Even before you begin to measure its scalping capabilities, you need to be satisfied that the broker is well-established. In the trading world, the elements that make a broker one you can trust include, but are not limited to, top-tier regulation, excellent liquidity, and mature platforms.
It is only once you are satisfied that these boxes have been checked that you can start to assess a broker’s suitability to provide you with the right level of scalping services you need. This article was developed by a team of Arincen experts and will help you understand what to look out for as a would-be scalper.
Best FOREX Brokers for Scalping
This section is based on a comprehensive in-house research study conducted at Arincen. With so many choices out there, it's tough to select the right broker. In this case, we've done the work for you. Here is a summary of each broker according to specific criteria, along with their pros and cons
ICM - Capital 91.10: Best Deposit and Withdrawal Broker
Tradeview: 90.00: Trusted broker that offers very low trading costs as well as comprehensive financial literacy materials for its clients.
XTB - 85.55: Best Customer Service Broker
IG - 85.45: Best Regulations Broker plus Convenient Platform
Saxo Bank - 80.09: Excellent Private Trading Platform
CMC Markets - 80.07: More than 9,000 Assets
ThinkMarkets - 80.05: Aimed at the Audience of Traders
| Company name | Regulations | Minimum deposit | Main branch | Open account |
|---|---|---|---|---|
ICM Capital |
500$ | United Arab Emirates | ||
Tradeview |
250$ | USA | ||
XTB |
500$ | UK | ||
IG |
500$ | UK |
| Company name | ICM Capital |
| Regulations | |
| Minimum deposit | 500$ |
| Main branch | United Arab Emirates |
| Company name | Tradeview |
| Regulations | |
| Minimum deposit | 250$ |
| Main branch | USA |
| Company name | XTB |
| Regulations | |
| Minimum deposit | 500$ |
| Main branch | UK |
| Company name | IG |
| Regulations | |
| Minimum deposit | 500$ |
| Main branch | UK |
What Is Scalping?
Scalping is an investment strategy where traders attempt to profit from minor changes in the price of financial instruments by entering and exiting positions hundreds of times during a day. The practice is founded on the idea that traders can make high volumes of small profits, informed by data from advanced technical analysis.
As you can imagine, with scalpers making hundreds of trades per day, the practice is intense and frenetic. Traders must always be hyper-aware, and the technology they use should have institutional-level speed with constant uptime. While other traders might use 30-minute trend analysis charts, scalpers trade using tick charts and one-minute charts. This shows the importance of extreme decision-making speed in scalping.
Scalping is the fastest trading style there is. Every other trading method, including day trading, requires investors to follow trends and hold positions for longer periods. This can mean holding positions open for days or weeks in the case of slow-moving instruments like commodities. Some instruments, like bonds, require months and even years to reach maturation.
Scalping is characterized by lightning-fast order opening and trade execution. Traders enter so many positions simultaneously that they cannot assess the merits of every position they take. Instead, they act on a longer-term strategy that is informed by technical analysis of cyclical price fluctuations and market inefficiencies. Some scalpers increase their activity still more when important economic news regarding interest rates and earnings results are released.
Many people in the industry consider scalping a high-risk style of trading as it is most often used in conjunction with high leverage. Scalpers themselves argue that it is inherently less risky to make only small bets on any one trade. Scalpers believe they can control other factors that might see them make losses by installing strategic stop-loss and take-profit orders and reducing times. Indeed, one thing to remember about scalping is that if exiting trades very quickly saves traders from making losses, surely the opposite is true and exiting profitable trades suddenly stops them from making gains. This is known as the opportunity cost of scalping. It is where serious discipline comes in as scalpers must use strategies to exit at the exact time they have predetermined.
What Regulation and Licensing Do Scalping Brokers Need?
Scalping as a form of trading is not bound by any formal regulation. This is because scalping is merely a trading strategy that is employed to trade selected financial assets. Therefore, it is the brokers who must be regulated, not the trading strategy. We will give you more information on regulations later in this section.
Scalping, however, may be subject to rules. It is down to the individual broker to put in place any rules it may see fit. Usually, rules are intended to serve two purposes. The first is to protect the client and brokers’ interests, so this could look like limiting the amount of leverage to which clients have access. The second reason is related to the limitations of the broker’s platform. A broker might place limits on execution speeds or the number of indicators it can support.
Online brokers who offer their services to scalpers must be regulated by a top-notch oversight body. Regulated brokers are compelled to stick to common best practices, like keeping their operating funds separate from client funds, complying with strict leverage rules as we have mentioned, and staying away from offering bonuses and overly generous promotions.
It is always a good sign if your broker is active in countries that are regulated by tier-1 bodies, like the Financial Conduct Authority (FCA) in the UK and the Cyprus Securities and Exchange Commission (CySEC) in Cyprus, which are two of the best regulators in the world. However, even if your broker is only regulated by a reliable oversight body in your country, which is good enough.
Here is a list of major reasons your broker must be regulated:
Safety of funds:
A regulated broker must comply with strict regulations to protect client funds, including segregating client funds from the company's funds.
Fair trading practices:
A regulated company must adhere to strict guidelines ensuring products and services are offered fairly and without manipulation, helping create a level playing field for all clients.
Transparency:
The law compels regulated brokers to be transparent with clients, which assures you of safe, fair trading. In practice, this looks like brokers admitting openly that FOREX trading is highly risky, and you could lose your money.
Protection from fraud:
Regulatory authorities protect clients from fraudulent activities and scams and ensure that FOREX brokers operate within set guidelines that safeguard their clients' interests
Choose a broker under the watch of a trusted regulatory authority who is renowned for their rigorous oversight. There's no obligation to opt for an overseas regulator; reputable brokers also operate within your own jurisdiction. To confirm if your broker is registered with a regulator, navigate to the regulator’s official website.
How to Choose the Best Scalping FOREX Broker
As mentioned, before choosing a broker for scalping, you need to check that the broker offers you the right conditions in several other areas. These conditions include regulation by reputable bodies, adequate capitalization, and a reputation that speaks for itself. You could also check what other traders just like you are saying about the broker.
On a more specific level, to give you the best scalping experience, the broker needs to have access to:
- Responsive stop-loss order facilities to minimize losses.
- A platform that allows you to open several hundred positions per day.
- Non-restrictive order opening rules. Positions should be opened and closed instantaneously.
- Razor-thin spreads on FOREX.
- Extremely low fees.
- Access to better-than-average liquidity.
- High-end indicators that allow you to monitor multiple markets.
- Access to view market depth and what other traders are doing.
- ECN-based direct access to markets with few dealer desk intermediaries.
- If there is intermediation, counterbalancing measures must be in place to unblock bottlenecks inherent in dealer desk models.
- Lightning-fast order execution.
- Generous, but well-controlled leverage.
- Fast and intuitive trading platforms.
Finally, you need to be able to choose the financial assets best suited to scalping. Often, these are high-liquidity assets such as FOREX. Large indices also work well for scalping. With these dynamic and highly liquid markets, there is never a situation where there are too few sellers or buyers, rendering the market unable to trade. Frequently, in illiquid markets that are prone to lulls, market corrections occasionally occur, inflating spreads temporarily. This is not ideal for scalping as the practice requires consistently stable conditions in which to facilitate rapid trades.
The bar for scalping services is high. It should not surprise you to learn that not all brokers offer scalping because of this. Many brokers simply do not permit it. Whether it is because scalping is inherently risky or because the broker cannot meet the technical requirements is up for conjecture.
Deposit and Withdrawals in Scalping
The very nature of scalping demands a rapid response to market fluctuations, making liquidity a big concern. As such, scalpers rely heavily on their ability to quickly move funds in and out of their trading accounts, ensuring they have sufficient capital to engage in high-frequency trading and take advantage of opportunities as they arise. Therefore, brokers catering to scalpers must prioritize the efficiency and reliability of their deposits and withdrawals, offering swift and hassle-free transactions that align with the fast-paced requirements of scalping strategies.
| Method | Credit Card | Wire Transfer | Skrill | Neteller | Cryptocurrency | PayPal |
| Deposit fee | 0$ | $0 + Bank commission | 1.9% | 2.5% | Unavailable | 3.75% |
| Withdrawal fee | 0$ | $15 | 1% | $0 | Unavailable | 2% |
| Method | Credit Card | Wire Transfer | Skrill | Neteller | Cryptocurrency | PayPal |
| Deposit fee | 0$ | 0$ | 1.9% | 2.5% | $0 | 3.75% |
| Withdrawal fee | 0$ | 0$ | 1% | $0 | $0 | 2% |
| Method | Credit Card | Wire Transfer | Skrill | Neteller | Cryptocurrency | PayPal |
| Deposit fee | 0$ | $0 + Bank commission | 1% | 1% | Unavailable | Unavailable |
| Withdrawal fee | 1.5% | 30$ | 1% | 1% | Unavailable | Unavailable |
| Method | Credit Card | Wire Transfer | Skrill | Neteller | Cryptocurrency | PayPal |
| Deposit fee | 0$ | $0 + Bank commission | Unavailable | Unavailable | Unavailable | 3.4% + fixed fee |
| Withdrawal fee | 0$ | $0 + Bank commission | Unavailable | Unavailable | Unavailable | 3.4% + fixed fee |
| Method | Credit Card | Wire Transfer | Skrill | Neteller | Cryptocurrency | PayPal |
| Deposit fee | 0$ | $0 + Bank commission | Unavailable | Unavailable | Unavailable | Unavailable |
| Withdrawal fee | 0$ | $0 + Bank commission | Unavailable | Unavailable | Unavailable | Unavailable |
| Method | Credit Card | Wire Transfer | Skrill | Neteller | Cryptocurrency | PayPal |
| Deposit fee | 0$ | $0 + Bank commission | Unavailable | Unavailable | Unavailable | Unavailable |
| Withdrawal fee | 0$ | $0 + Bank commission | Unavailable | Unavailable | Unavailable | Unavailable |
| Method | Credit Card | Wire Transfer | Skrill | Neteller | Cryptocurrency | PayPal |
| Deposit fee | 0$ | $0 + Bank commission | 0$ | 2.5% | Not mentioned | Unavailable |
| Withdrawal fee | 0$ | $0 + Bank commission | 5.50$ | 0-7.5% | Not mentioned | Unavailable |
Commissions and Fees
Trading fees can sometimes be hard to understand. Be sure to check how these fees compare with industry standards:
Spreads:
There are two main kinds of spread, one is fixed, and the other is variable. The spread refers to the gap between two prices, such as the bid/ask rate in a currency exchange rate. If you are getting a spread of 1.4 pips for the EUR/USD, you can rest easy and you are getting a good deal at present market rates. The narrower the better, this means that a spread of 1.4 pips is better than a spread of 2 pips. This article explains more about this important concept.
Commission:
A fee charged per trade, usually calculated as a percentage of the trade value.
Rollover Fees:
Charged when you hold a position overnight. This is because they assume the risk of the market changing adversely.
Withdrawal and Deposit Fees:
Fees for transferring funds to and from your broker account.
Subscription or Inactivity Fees:
Some brokers charge a monthly fee or inactivity fee if you don't meet certain trading requirements.
Conversion Fees:
These are for trading in a different currency.
Guaranteed Stop-Loss Fees:
This is for protecting against losses.
To keep track of trading fees, make sure you research different brokers and trading platforms, as well as compare the charges of each platform. Remember that trading fees can have a significant impact on your trading profits, so it's important to choose a platform that offers competitive fees and suits your trading needs.
| Spread | Commission | Swap | Islamic Account | |
| Currencies | Starting from 1.3 Pips | 0$ | No | Available |
| Stocks | Starting from 18 Pips | 0$ | Yes | Unavailable |
| Commodities | Starting from 2.3 Pips | 0$ | No | Available |
| Indices | Starting from 4 Pips | 0$ | Yes | Unavailable |
| Spread | Commission | Swap | Islamic Account | |
| Currencies | Starting from 0.14 Pips | $0 | No | Available |
| Stocks | Starting from 0 Pips | $0 | No | Available |
| Commodities | Starting from 2 cent | $0 | No | Available |
| Indices | Starting from 0.2 Pips | $0 | No | Available |
| Spread | Commission | Swap | Islamic Account | |
| Currencies | Starting from 0.2 Pips | 0$ | No | Available |
| Stocks | Not Mentioned | 0$ | Yes | Unavailable |
| Commodities | Starting from 8 Pips | 0$ | No | Available |
| Indices | Starting from 4 Pips | 0$ | Yes | Unavailable |
| Spread | Commission | Swap | Islamic Account | |
| Currencies | Starting from 0.6 Pips | 0$ | Yes | Unavailable |
| Stocks | Starting from 2.4 Pips | 0$ | Yes | Unavailable |
| Commodities | Starting from 0.1 Pips | 0$ | Yes | Unavailable |
| Indices | Starting from 0.2 Pips | 0$ | Yes | Unavailable |
| Spread | Commission | Swap | Islamic Account | |
| Currencies | Starting from 0.9 Pips | $0 | Yes | Unavailable |
| Stocks | Starting from $0.02 | $6 | Yes | Unavailable |
| Commodities | Starting from $0.6 | $6 | Yes | Unavailable |
| Indices | Starting from $0.7 | $6 | Yes | Unavailable |
| Spread | Commission | Swap | Islamic Account | |
| Currencies | Starting from 0.5 Pips | $0 | Yes | Unavailable |
| Stocks | Starting from $0.2 | $10 | Yes | Unavailable |
| Commodities | Starting from 0.2 Pips | $0 | Yes | Unavailable |
| Indices | Starting from 0.5 Pips | $0 | Yes | Unavailable |
| Spread | Commission | Swap | Islamic Account | |
| Currencies | Starting from 0.4 Pips | $0 | Yes | Unavailable |
| Stocks | Starting from 0.1% | $0 | Yes | Unavailable |
| Commodities | Starting from $0.19 | $0 | Yes | Unavailable |
| Indices | Starting from 0.4 Pips | $0 | Yes | Unavailable |
There is a high degree of risk involved in trading securities like FOREX, or CFDs, which are highly complex instruments. As a trader, you could be exposed to excessive leverage, questionable broker tactics, market volatility, and limited regulatory protection. Despite your best trading techniques and risk management strategies, your efforts may not be profitable, and you could suffer losses.
ICM capital Broker
ICM Capital is considered the industry leader in deposits and withdrawals, whereby each withdrawal does not take more than five business days. Moreover, the company offers its customers a handy credit card to withdraw their profits, in addition to enabling customers to use various deposit methods. The company, which is licensed by the UK's FCA, has several branches around the world. Among other things, it has a rich portfolio of assets, especially stocks, offers a low spread, as well as the ability to use MT4.
| Broker Evaluation | 8.11 |
| Regulatory Bodies | |
| Minimum Deposit | 500$ |
| Islamic Account | yes |
| Payment Methods | Bank transfer - credit card - Electronic Banks - Crypto |
| Main Branch | United Kingdom |
| Customer Service | 24/5 |
| Demo account | yes |
| Trading Platforms | MT4 - MT5 - C TRADER -Web Platform |
Pros
-
Segregated client funds.
-
Regulated by the UK’s FCA.
-
Established in 2009.
-
More than 10,000 ICM Capital users and traders.
-
Reasonable minimum deposit from $500.
-
Decent funding options.
-
No swaps.
-
MetaTrader4 (MT4) desktop and mobile download.
Cons
-
Does not allow scalping.
-
Not ASIC-regulated.
-
Relatively limited range of instruments.
-
Slow live-chat service.
-
Relatively high trading fees.
-
Limited range of trading tools and resources
Dukascopy Broker
Tradeview Forex, interchangeably known as Tradeview Markets, was established in 2004 and is headquartered in the Cayman Islands, setting itself up as a significant player in the online FOREX and CFD trading world. Regulated by the Cayman Island Monetary Authority (CIMA) and the Malta Financial Services Authority (MFSA), Tradeview Forex is a reliable platform in a competitive market. The broker’s commitment to offering a broad and accessible trading environment shines through with its low deposit requirement and how it provides various advanced trading platforms to clientele.
| Broker Evaluation | 7 |
| Regulatory Bodies | |
| Minimum Deposit | $450 |
| Islamic Account | Yes |
| Payment Methods | Bank transfer - credit card - Electronic Banks - Crypto |
| Main Branch | USA |
| Customer Service | 24/5 |
| Demo account | Yes |
| Trading Platforms | Proprietary Platform-MT4 - MT5 -Web Platform |
Pros
-
Established in 2004.
-
Variety of trading platforms, such as MT4, MT5, cTrader, and Currenex, catering to different trading preferences and strategies.
-
Low minimum deposits.
-
beginners and experienced traders looking to refine their strategies.
-
Supports automated trading through the use of Expert Advisors (EA) on MT4 and MT5 platforms.
-
Decent leverage levels of 1:200 available in some jurisdictions.
-
Regulated by CIMA, MFSA, and will soon be regulated by the UK’s Financial Conduct Authority (FCA).
Cons
-
While regulated by CIMA and the MFSA, the broker is still in the final stages of becoming regulated by the tier-one FCA.
-
Trades on the Innovative Liquidity Connector® account are subject to commission charges, which may add to trading costs.
-
While offering high leverage up to 400:1 can be an advantage, it also introduces significant risks, especially for new traders.
XTB Broker
What distinguishes XTB is the fact that it offers the best customer experience among all the companies we have surveyed. Indeed, it boasts the fastest response rate from all the companies under investigation. This is especially relevant, since the market is always on-the-go, and so you need to act fast. XTB offers lots of asset classes, as well as the ability to use the MT4 trading platform. Finally, it maintains a relatively low spread, which is suitable for quick deals.
| Broker Evaluation | 8.55 |
| Regulatory Bodies | |
| Minimum Deposit | 500$ |
| Islamic Account | yes |
| Payment Methods | Bank transfer - credit card - Electronic Banks |
| Main Branch | United Kingdom |
| Customer Service | 24/5 |
| Demo account | yes |
| Trading Platforms | MT4 - MT5 -Web Platform |
Pros
-
Long history of operation.
-
Globally recognized, having won multiple awards.
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Some of the lowest FOREX spreads in the market.
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Regulated by the FCA (UK).
-
Offers protection for client accounts.
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Emphasis on customer service.
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Excellent support, learning and research tools.
Cons
-
Does not accept US clients.
-
Non-FOREX spread costs are relatively high.
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No GSLO.
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No back-testing or automated trading capabilities.
-
Conditions vary according to regulation and entity.
ig markets Broker
IG is arguably the best broker when it comes to security and trust, boasting, as it does, licenses from 10 regulatory bodies, including the all-important FCA from the UK. The company is also a bank and is a publicly traded company in London. It is known for offering more than 10,000 asset classes of currencies, commodities, future contracts, ETFs, indices, cryptocurrencies etc. Further, it has its own state-of-the-art trading platform and offers a relatively low spread.
| Broker Evaluation | 7.54 |
| Regulatory Bodies | |
| Minimum Deposit | 250$ |
| Islamic Account | yes |
| Payment Methods | Bank transfer - credit card - Electronic Banks |
| Main Branch | United Kingdom |
| Customer Service | 24/5 |
| Demo account | Yes |
| Trading Platforms | Proprietary Platform -MT4 - Web Platform |
Pros
-
Easy-to-navigate platform that is simple for beginners to master.
-
Margin rates are easy to understand and affordable.
-
Mobile and tablet platforms offer full functionality of the desktop version.
-
Accepts US clients.
-
Access to more than 100 currency pairs
-
Emphasis on education and research.
-
Regulated by the FCA (UK), as well as the CFTC and the NFA (US).
-
Offers protection for UK/EU client accounts.
Cons
-
US traders can currently only trade FOREX.
-
No GSLO for US-based traders.
-
No account protection for US clients.
-
Relatively high share-CFD fees.
-
No copy trading or back-testing integration on IG platform.
SAXO BANK Broker
Saxobank is considered one of the best investment banks in the area of financial markets and currencies, as it offers the very best trading platform and tools from all the companies we have reviewed. Meanwhile, its spread is very low and, as such, suitable for short-term deals; and it offers a large number of asset classes, including currencies, commodities, indices etc. Finally, its customer service is excellent and very responsive to traders' needs.
| Broker Evaluation | 6.09 |
| Regulatory Bodies | |
| Minimum Deposit | 10000$ |
| Islamic Account | No |
| Payment Methods | Bank transfer - credit card |
| Main Branch | Copenhagen, Denmark |
| Customer Service | 24/5 |
| Demo account | No |
| Trading Platforms | SaxoTrader |
Pros
-
Extensive range of offerings.
-
Regulated by the FCA (UK) and other top regulators.
-
Great trading platform.
-
Among the industry’s best research.
-
Superior user interface.
-
Offers protection for client accounts.
Cons
-
High bond, options and futures fees.
-
Lack of emphasis on customer service.
-
Confusing instrument fee structures.
-
High minimum deposit.
-
Does not accept US clients.
-
No MT4.
-
Lacks live chat.
CMC MARKETS Broker
CMC Markets is thought of as one the best companies, offering some 9,000 asset classes that encompass currencies, commodities, indices, cryptocurrencies, bonds and stocks. The company offers a relatively low spread, the MT4 platform, and fast customer service. It is most suited for traders looking for diversity in asset classes.
| Broker Evaluation | 7.07 |
| Regulatory Bodies | |
| Minimum Deposit | 0$ |
| Islamic Account | No |
| Payment Methods | Bank transfer - credit card - Electronic Banks |
| Main Branch | United Kingdom |
| Customer Service | 24/5 |
| Demo account | not |
| Trading Platforms | Proprietary Platform -MT4 - Web Platform |
Pros
-
Extensive range of offerings.
-
Regulated by the FCA (UK).
-
Low FOREX fees.
-
Emphasis on education and customer service.
-
Great Web and mobile platforms.
-
Offers protection for client accounts.
-
Research amenities are industry leading.
Cons
-
Does not accept US clients.
-
Limited product portfolio.
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High stock CFD fees.
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High CFD spreads for certain indices.
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Differences between Next Generation and MT4.
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Complicated account verification.
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No back-testing or automated trading capabilities.
think markets Broker
Originally founded in New Zealand in 2010, and moving to Australia within the space of their first two years, Think Markets is a global online brokerage focusing on FOREX and CFD trading. In addition to a range of major and minor currency pairs. Think Markets has an array of CFDs on offer. This includes indices, as well as hard and soft commodities.
| Broker Evaluation | 8.05 |
| Regulatory Bodies | |
| Minimum Deposit | 0$ |
| Islamic Account | yes |
| Payment Methods | Bank transfer - credit card - Electronic Banks - Crypto |
| Main Branch | Australia |
| Customer Service | 24/5 |
| Demo account | not |
| Trading Platforms | Proprietary Platform -Web platform-mt4- mt5 |
Pros
-
Beginner assistance offered through 24/6 channels.
-
Spreads are as low as 0.0 pips.
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24/7 expert customer service.
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CFD shares and indices come at no extra fee.
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Zero broker fees for FOREX trading.
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Technical analysis and quality market information.
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Percentage allocation management module (PAMM) and Multi-account manager (MAM) accounts available.
Cons
-
Direct share trading is on a separate platform.
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No binary options offered.
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Commissions charged for two account types.
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After a strong early start, ThinkTrader user ratings have slid to 3.4 stars.
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No US, Canada or Japan clients allowed.
What is Leverage and How Much is Best for You?
Leverage allows traders like you to gain exposure to markets with a small initial investment, often as little as 1% of the total value of the position. This can magnify both profits and losses, so it is important to use leverage wisely and understand the risks involved.
There are many important regulators around the world. Depending on the regulatory framework within which your broker operates, scalpers like you will encounter varying leverage rules. Several key regulators have introduced specific guidelines to safeguard retail traders.
Let's look at some of these leverage rules set by major regulators:
FCA in the UK:
30:1 for major currency pairs
20:1 for non-major currency pairs, gold, and major indices
10:1 for commodities (excluding gold) and non-major equity indices
5:1 for individual equities and other reference values
2:1 for cryptocurrencies
Australian Securities and Investments Commission (ASIC) in Australia:
30:1 for major currency pairs
20:1 for non-major currency pairs, gold, and major stock market indices
10:1 for commodities other than gold and minor stock market indices
5:1 for equities (stocks) and other underlying assets
2:1 for cryptocurrencies
It's worth noting that these rules apply to retail scalping clients. Professional or institutional clients might have access to distinct levels of leverage, depending on the regulatory environment and the broker's policies. As we can see, responsible regulators closely monitor leverage levels. Leverage is a double-edged sword because you can make a lot of money, but you can just as easily lose a lot of money.
Similarly, with stop outs, many major regulators offer negative balance protection. This is important as your open positions are automatically closed by the broker due to insufficient margin in the account. This mechanism protects you from accruing negative balances and owing money to the broker. We'll explain more in the next section.
Retail traders should be cautious when trading with high leverage due to the significant risks involved. While leverage can increase gains, it can also magnify losses. You should be careful when trading with high leverage, that’s why you need the right knowledge and experience to handle the highs and lows that come with this form of trading.
Different Stop Out Rules by Scalping Brokers
The term "stop out" refers to a situation where a scalping broker automatically closes some or all of your open positions to prevent your account from going into a negative balance. This is most relevant for traders using leverage. The stop-out level is typically expressed as a percentage, representing the margin level at which the broker starts to close out open trades.
0% Stop-Out Level:
At this level, when the margin level of the account drops to 0%, the broker will automatically close all open positions. This is the most aggressive stop-out level. As soon as the equity in the account equals the required margin, the positions are liquidated. This gives no room for your positions to recover even if the market turns in your favor immediately after reaching this level.
50% Stop-Out Level:
Here, if the margin level drops to 50%, the broker will start closing out positions.
It offers a bit more flexibility when compared to the 0% level. The broker will typically close the most unprofitable positions first, and if that's not enough to bring the margin level back above 50%, more positions will be closed until it's achieved.
100% Stop-Out Level:
A 100% stop-out level means that when a trader's equity equals the margin required for the open positions, the broker will start closing those positions. It’s important to know that this is similar to the 0% level but might be worded differently, based on broker terminology.
In any case, the specific percentage and the order in which positions are closed can vary among brokers, so you must be aware of your broker's policy on stop-out levels.
Tip for those who have no experience
We believe that a solid foundation in education and research is essential for every successful trader. That’s why we’ve created a set of resources specifically for you. Our comprehensive articles provide an understanding of the basics, while our videos offer insights from industry insiders. Stay updated with the latest developments in the market through our newsfeed, signals, and detailed analytics.
What is the Broker’s Policy toward Scalping?
As you may have gathered, scalping is a strategy that is loved by many traders who enjoy the speed of trading and the thrill of being involved in such a fast-paced marketplace. The best brokers make every effort to accommodate scalping as no company likes to leave a segment of its client base uncovered.
However, as we have said, brokers have different attitudes to scalping. Some brokers offer scalping, but do not have all the tools in place, making it a troublesome and frustrating exercise. In fact, disappointed traders on many message boards complain that while some brokers offer scalping in principle, they are simply not set up for it in practice.
Other brokers refuse scalping outright. Besides the technological aspect we have mentioned, there are also some operational reasons a broker can shy away from the practice. Scalping requires the broker to have its house in order from the point of view of handling the large wins or losses that traders can make. Scalping requires that broker platforms have high uptime and robust servers. You can imagine a situation in which, due to performance issues, scalpers are interrupted during a trading session and a broker does not have a responsive customer service team to handle the complaints.
Commercially, there are also some additional challenges. Imagine a broker offers scalping on a Dealer Desk method, meaning they trade against their clients, thereby offsetting their market risk to zero. In practice, with the Dealer Desk method, if a trader takes a massive loss on a trade, the broker makes a compensatory win as it will have placed a counter trade. In this instance, if the broker is not operationally sound enough to routinely counter hundreds of thousands of daily client trades, then they are at risk of going out of business. Brokers have been known to fold because their operations are not set up for a rapid-fire trading environment. This is one of the reasons why some brokers fear scalping.
Reputable brokers will always make it clear if they are open to scalping or not. If your broker does not include this information or if it is intentionally vague, it is a cause for concern. Scalping is a valid trading strategy in which many traders engage. If the broker recognizes scalping but is hesitant to embrace it, then it is sometimes an indictment on the broker’s ability to offer these services.
Is your Broker Using an ECN Platform?
It is much more suitable for a broker to use an Electronic Communications Network (ECN) platform to facilitate scalping services. This type of network is fast and stable and is perfectly suited for the rapid trading that takes place in the scalping world. Brokers that do well in this space are often the fastest among their immediate competitors and provide a space where the trader can enjoy unfettered access to market-making participants like liquidity providers.
What does all this mean? FOREX brokers typically operate in two ways. The first and more traditional is the Dealer Desk model, where the trader buys FOREX from the broker who then goes out to the market to find the FOREX at the best prices. In this Dealer Desk model, you can already see that scalping would be a difficult exercise to execute at speed because of the presence of a middleman.
The other, newer, operating model is the technology-enabled ECN method in which the broker simply provides their platform for the scalper to utilize and steps back and allows the trader to buy FOREX directly from the market. It is much faster and much more suited to scalping.
ECN platforms facilitate a vibrant space for buyers and sellers to be in the same market to negotiate and finalize orders. Using technical tools that emphasize speed, the network automatically matches buy and sell orders in real-time.
All the information relating to active bids and offers available for trading is available in a bustling electronic marketplace. The system was designed to be more efficient and streamlined than traditional counterparty or dealer desk trading.
Trading on an ECN platform is faster and more transparent. Scalpers can see the same information in the form of a market newsfeed that shows up-to-the-minute pricing, including price history. ECN platforms allow an institutional level of transacting. Scalpers thrive on high-trade volumes, something that is easily achieved in a bustling ECN-enabled marketplace.
ECN platforms also allow scalpers to trade outside of standard trading windows. By providing electronic access to markets on a 24/5 basis, traders can work at night or early in the morning as exchanges in other areas of the world are bound to be open.
Recommended Brokers
Does the Broker have Fast Execution Speeds?
When we speak of fast execution speeds in the context of scalping, non-ECN trading is disqualified. For the reasons we have discussed before, any broker still offering dealer-desk scalping where they act as the market maker is, by definition, slower than ECN trading since they place themselves as an intermediary and cannot match ECN speeds.
Slippage is not an option for scalpers. This is when trades are not executed at the price the trader indicated because the broker could not activate the request fast enough. Scalpers need to trade continuously without delay, or they may as well not bother. This high intensity trading form requires institutional grade tools that are highly efficient and reliable.
As far as execution speeds go, some brokers market themselves as leaders in terms of execution speeds without stating on what they base those claims. Other brokers proudly tell you how fast their average execution speeds are. When conducting research for any purchase, you would look to corroborate any firm’s claims, and you would go further by looking for testimonials from other clients. Therefore, settling on a broker based on execution speeds follows much the same idea. The more verifiable information you can find to back up the broker’s claims, the better.
Trading with an unregulated broker can have dire consequences. Regulated brokers must comply with strict rules to protect your interests. Unregulated brokers may engage in fraudulent activities, such as misappropriating client funds, and may not have adequate measures in place to protect your data. For a list of the best regulators, read our article here.
Terms and Conditions: What to Look Out For?
It is important to understand what a broker seeks to highlight when they inform you about terms and conditions. Remember, as an unregulated practice, scalping rules are set by the brokers themselves. When reading the fine print (and you should certainly do this), ensure that you are not prejudiced in any of the following ways:
- Be certain that you have enough time to close your trades. Many established brokers give scalpers extra time to complete their trades outside normal hours. Because ECN trading is usually the norm, having electronic access to markets across the world means you can trade across time zones.
- Understand how much margin you need to stay in good standing. You should also pay attention to what the broker says about when they will make a margin call if you start losing money, which is the process of the broker calling in the collateral they asked you to put up.
- On the matter of execution speed, it is crucial to know how much of the broker’s execution performance speed is guaranteed. This test most often separates the serious brokers from the remainder. The best brokers offer detailed execution speed guarantees because their platforms are durable, and market-tested. Other brokers limit guarantees to peak hours, while some brokers offer no guarantees at all.
Reasons for Choosing a Broker that Allows Scalping
Due to the technical and operational demands that scalping places on brokers, not all of them can do it. It is fair to say that reliable, fair, and fast scalping services can act as a proxy for how established a broker is.
You do need to understand that this type of trading usually requires a bigger deposit than other forms of trading. With access to high leverage and the sheer speed at which trader positions can shift, brokers need to protect themselves if a scalper gets into trouble.
Scalping is a trading form that is characterized by high trading speed and elevated trading volume. The plain truth is that it is a risky exercise, especially for inexperienced traders. Brokers that understand this and embrace it by educating scalpers extensively and putting in place rules to protect themselves and the scalper are your best bet as you enter this space.
Technical Tools for Scalpers
Scalping and advanced technical software go hand in hand. Brokers must provide scalpers with powerful indicators that are customizable and easy to follow. Traders who engage in scalping rely heavily on technical analysis to inform their strategies.
Scalpers make the most use of tick charts and rapid one-minute charts. They also need access to long-term trend analysis tools like Fibonacci graphs. Market updates and daily signals and recommendations also come in handy. This level of technical expertise disqualifies a great many brokers, who simply do not have the resources to put these services in place.
New traders should also not underestimate the value of a well-designed and intuitive trading interface. Serious scalpers spend hours staring at the screen, making a good visual interface a non-negotiable item. Part of the design brief for any interface should include access to multiple periods at once so traders can keep track of as many price movements as possible.
It may sound trivial, but having a well-laid-out screen could be the difference between a costly mistake and a trouble-free trading session. Imagine that during trading you need to place an urgent trade and you press the wrong button or you must navigate between cumbersome screens to achieve what you want. It is these superior performance margins that only the most serious high-volume scalpers will be able to tell apart.
What Trading Platforms, Tools, and Features Should a Broker Offer?
When it comes to choosing the best trading platform for scalpers, you should always consider a range of features suitable for both newbies and experienced traders. From what we’ve seen, MT4 has emerged as the gold standard in the FOREX trading world due to its ease of use, fast execution, and sophisticated tools. Originally designed as a FOREX-exclusive platform, it has evolved to accommodate other financial instruments, such as stocks, indices, and commodities. Regardless of whether you opt for a broker offering MT4 or a different platform, it's crucial to be informed about the following elements:
Platform Quality: Foremost, determine if the platform is web-based or requires downloading. A premier trading platform should give users versatile access options.
Interface Customization: Investors must personalize the platform to their liking, allowing them to tailor their trading space to their specific needs.
Technical Analysis Tools: Ensure the platform comes with comprehensive technical indicators to support you in making educated choices.
Risk-Reduction Tools: Given the inherent risks in trading, a top-tier platform should offer tools for you to establish stop-losses, set profit targets, and employ other order functionalities.
Performance and Quality: Especially for those new to the trading scene, it's important to have a platform that runs flawlessly with scarce downtimes or technical issues. This allows you to concentrate on market trends rather than dealing with software problems.
Educational Materials: Leading brokers provide platforms that are not only user-friendly but also equipped with instructional materials and a dedicated customer service team to help traders overcome any potential hurdles.
What to Expect from Customer Service at The Best Scalping Brokers?
As a retail trader, the customer service you need from a broker typically includes several key aspects:
- Accessibility and responsiveness through multiple channels like phone, email, live chat, and social media.
- Knowledgeable support staff with an understanding of trading platforms, market operations, and financial products.
- Account management assistance including deposits, withdrawals, and understanding account statements.
- Technical support related to the trading platform, troubleshooting, and features.
- Educational resources.
- Problem resolution such as trade execution problems.
- Market information and tools to aid in making informed trading decisions.
- Personalized services such as a dedicated account manager.
Remember, the quality of customer service can significantly impact your trading experience, so it's important to choose a broker that offers reliable and comprehensive support.
| Live Chat | Phone | |||
| Available | Available | Available | Available | Available |
| Quick response | Very Fast | Very Fast | Very Fast | Very Fast |
| Live Chat | Phone | |||
| Available | Available | Available | Available | Available |
| Quick response | Quick response | Fast | Fast | Fast |
| Live Chat | Phone | |||
| Available | Available | Available | Available | Not Available |
| Quick response | Very Fast | Moderate | Moderate | Not Available |
| Live Chat | Phone | |||
| Available | Available | Available | Available | Not Available |
| Quick response | Very Fast | Very Fast | Moderate | Not Available |
| Live Chat | Phone | |||
| Available | Available | Not Available | Available | Not Available |
| Quick response | Slow | Not Available | Moderate | Not Available |
| Live Chat | Phone | |||
| Available | Available | Not Available | Available | Not Available |
| Quick response | Moderate | Not Available | Moderate | Not Available |
| Live Chat | Phone | |||
| Available | Available | Available | Available | Not Available |
| Quick response | Moderate | Fast | Moderate | Not Available |
What Tradable Assets and Instruments Should the Best Broker Have?
Retail trading offers a diverse range of financial instruments, each with its own set of opportunities and challenges. Here are the most common tradable assets and instruments that scalpers can access:
- FOREX
With the largest trading volume globally, the FOREX market allows traders to speculate on the future movements of currency prices and trading pairs like EUR/USD, GBP/JPY and many more.
- Commodities
Whether it's precious metals like gold and silver, or energy commodities like oil and natural gas, commodities trading offers a chance to profit from the tangible assets that drive global economies.
- CFDs
CFD trading allows you to speculate on the rising or falling prices of fast-moving global financial markets, such as shares, indices, commodities, currencies, and treasuries. You don’t own the underlying asset and you can go short or long. CFDs are traded on margin, meaning the broker allows investors to borrow money to increase leverage or the size of the position to amplify gains. Brokers will require traders to maintain specific account balances before they allow this type of transaction. CFD brokers typically provide a wide range of financial instruments across different asset classes, allowing traders to diversify their portfolios with ease.
- Equities or Stocks
These represent ownership in a company and constitute one of the most popular avenues for retail traders, given their potential for substantial returns and the thrill of being a part of the corporate world.
- Indices
These are baskets of stocks representing a particular market or sector, like the France 40 or the UK 100, giving traders exposure to broader market movements.
- Cryptocurrencies
Digital coins like Bitcoin, Ethereum, and countless altcoins offer both high rewards and volatility for scalpers.
- Options and Futures
These derivative products allow traders to hedge against potential losses or speculate on price movements without owning the underlying asset.
| Brokers | Currency pairs | Stocks | Indices | Commodities | Crypto | ETFs |
| ICM Capital | 67 Pairs | 89 Shares | 17 Indices | 12 Commodity | 6 Coins | Unavailable |
| Tradview | 80 Pairs | 5000 Shares | 10 Indices | 10 Commodity | 30 Coins | Unavailable |
| XTB | 57 Pairs | 1848 Shares | 36 Indices | 22 Commodity | 22 Coins | 135 ETFs |
| IG | 108 Pairs | 20000 Shares | 200 Indices | 20 Commodity | 5 Coins | 200 ETFs |
| Saxo Bank | 320 Pairs | 22000 Shares | 200 Indices | 200 Commodity | 9 Coins | 6700 ETFs |
| CMC Markets | 330 Pairs | 8000 Shares | 80 Indices | 100 Commodity | 18 Coins | 200 ETFs |
| Think Markets | 46 Pairs | 3750 Shares | 15 Indices | 11 Commodity | 21 Coins | 350 ETFs |
Conclusion
For new scalpers entering the retail trading space, selecting the best online trading broker is a major decision that can impact their trading success. Key factors to consider include the speed and reliability of trade execution, the broker's technological infrastructure, the broker's cost structure, and the ease of the deposit and withdrawal processes. Additionally, customer support responsiveness can aid in navigating the complexities of handling a scalping portfolio. By prioritizing these aspects, new scalpers can make an informed choice that will help them appoint the best trader platform that aligns with the demanding and dynamic nature of scalping.
Methodology
The team at Arincen collected over 120 pieces of data covering more than 100 licensed FOREX companies. Data collection was done in three ways:
- Companies’ websites.
- Other websites that have ranked FOREX companies.
- A survey questionnaire (referred to here as Survey “1”) was sent to the companies invited to participate in the exercise.
We have identified 12 criteria for our assessment, each containing several aspects and carrying its relative weight. These include licensing, deposits and withdrawals, number of assets, scalping features, etc.
Afterwards, we validated the data by:
- Registering with FOREX companies as a secret shopper and/or as Arincen.
- Survey number “2,” in which we asked these companies’ customers for important feedback and experience.
The next step saw us evaluate and rank each company, relying on the demanding work of 15 Arincen employees. We were careful in ensuring the most accurate assessment possible, including considering different languages, as well as the various mobile-app operating systems, e.g., Apple, Samsung, etc.
To add credibility to our research project, we sent a final and third survey (referred to here as Survey “3”) to enable participating FOREX companies to evaluate our research and whether it accurately reflects the realities on the ground. We were fortunate enough to receive a mark of 9.9 out of 10! We have kept to a minimum the margin of error, which stood at a measly 1%. To learn more about how we came up with the evaluation, please click here.
To add credibility to our research project, we sent a final and third survey (referred to here as Survey “3”) to enable participating FOREX companies to evaluate our research and whether it accurately reflects the realities on the ground. We were fortunate enough to receive a mark of 9.9 out of 10! We have kept to a minimum the margin of error, which stood at a measly 1%. To learn more about how we came up with the evaluation, please click here.
Forex Risk Disclaimer
Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
FAQ
Are the trading profits from scalping taxable?
The proceeds from scalping, a form of day trading, are generally taxable. Remember that day trading is a trading style, not a distinct financial asset. So, you can be a scalper of FOREX, cryptos, or stocks. The taxation of financial trading varies greatly from country to country and depends on local tax laws and regulations. It is always a good idea to contact a tax expert in your country to fully understand your tax liability. However, in general, many countries consider profits from day trading in FOREX, cryptos, or stocks either as capital gains or income, depending on factors such as the frequency of trading, the purpose of the trading activity, and other circumstances.
What is Scalping?
Scalping is a trading style that involves opening and closing multiple positions each day to make small profits. It is not uncommon for serious scalpers to make hundreds of small trades every session.
Is Scalping Profitable?
Yes. Scalping can be profitable. However, you need to be well-prepared before you start. Educate yourself on scalping strategies and familiarize yourself with your broker’s platform. Also, be aware that scalping requires a large deposit to start trading. Finally, understand that scalping is an intense exercise that needs your active attention if you are to be successful.
Is Scalping Legal?
Yes. Scalping is legal. It is widely practiced and supported by modern technology. Most well-established brokers offer it as a legitimate part of their services.
How Do I Choose an Asset for Scalping?
The best assets to scalp are those that are highly volatile and exist in large and liquid markets. FOREX is a prime candidate for scalping, as are stocks and securities.
How Can I Minimize Scalping Risk?
Do your research first. Produce a well-informed strategy and stick to it. Make use of an established broker that can offer you advanced technical tools that guarantee correct and up-to-date information, as well as performance speed. Finally, it is always good advice in any form of trading to diversify your interests and to not expose too much of your portfolio at any one time.
Does it Matter Where My Broker is Based?
Yes, it matters. The best brokers are regulated by reputable and powerful oversight bodies. If you are to receive the benefit of this regulation, then you must pay attention to where your broker is based.
My Broker Does Not Support Scalping, What Should I Do?
Not all brokers offer scalping. The best advice is to do your research and find one that does.
What are Scalping Regulations?
Scalping itself is not regulated. Each broker puts rules in place regarding how you can perform scalping on its platform.
How Much Money Do I Need to Start Scalping?
In general, the minimum deposits for scalping are higher than other types of trading. This is because scalping is risky, and so you can lose money quickly. Before you start, investigate how much your broker needs in your account before you can start scalping.
Written by
Marwan Kardoosh
The Editorial Department at Arincen makes an important contribution to the world-class content that can be found on the site. Arincen’s Head of Content and Chief Economist Marwan A. Kardoosh brings with him over 24 years of experience working in the...
Edited by
Adrian Ashley
Adrian Ashley is a seasoned business and finance writer. With a corporate career spanning over 20yea...
Fact Checked by
Bahaa Khateeb
Bahaa Khateeb is currently the CEO of Arincen, a start-up Fintech company based in Haifa. Baha...
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