For a trader attempting to choose a FOREX broker in 2023, the fundamentals remain the same. You want your broker to be well-regulated by tier-1 financial watchdogs, highly liquid, run properly, have advanced trading platforms, and be on hand to assist you whenever necessary. Once you have checked all those boxes, you can focus on the specific features that differentiate FOREX brokers from each other. This article will help you understand the key features that make some brokers stand out and others fade into the background.
After a rigorous research exercise, here is our list:
Best FOREX Brokers for Beginners in 2023:
FXDD – 92.15 – Best Overall Broker.
ICM Capital – 91.10 – Best Deposit and Withdrawal Broker.
XTB – 85.55 – Best Customer Service Broker.
IG – 85.45 – Best Regulations Broker Plus Convenient Platform.
Think Markets – 80.05 – Aimed at the Audience of Traders.
FXDD received the highest score in our survey (92.15). One of the first FOREX companies to offer a credit card in order to allow traders to withdraw their profits, this New York-based company has the UK's FCA license under its belt. It also has a rich portfolio of assets, offers a relatively low spread, in addition to the MetaTrader4 (MT4) platform. Further, it has excellent and fast customer service, and also offers traders a variety of ways to deposit money.
CM 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.
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.
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.
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.
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.
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.
The FOREX market is the largest global financial marketplace. It is a thriving place powered by institutional buyers and sellers operating from every corner of the globe. Retail investors play a small-but-important role in this worldwide marketplace. The FOREX market operates 24 hours a day and five days a week (Monday through Friday), except international holidays. Brokerage firms play a crucial part in giving the average retail trader access to this market as they enable clients to buy and sell through a trading platform and can give them leverage to trade for more than they would normally do.
How to Open a FOREX Trading Account and Start Trading FOREX
To open a FOREX trading account, there are some regular steps to follow. These include doing your research to find a reputable FOREX broker that suits your trading needs, offers competitive spreads, and provides reliable trading platforms.
FOREX brokers offer different types of trading accounts. Choose the account type that suits your trading goals and experience level. Don’t forget to favor a broker that offers demo trading; this way you can practice before you use your own money. Once you have completed the account-opening process, you can fund your account and download and install the broker’s trading platform. This is all you need to start using your trading platform to execute trades, monitor market movements, and manage your account.
How to Start Learning about FOREX Trading
Although this is not the primary aim of this article, we will let you know about some of the most important terms you will come to understand as your trading journey unfolds:
In FOREX trading, a pip is a unit of measurement for the change in value of a currency pair. It stands for “percentage in point” or “price interest point.” A pip is typically the fourth decimal place in a currency pair and is a measure of how much the value between two currencies changes.
In FOREX trading, the term “lot” refers to the standardized size of a trade. It is the unit of measurement used to describe the volume or size of a FOREX trade. There are three main types of lots in FOREX trading: standard lot, mini lot, and micro lot.
A position size in FOREX trading refers to the number of lots or units of a particular currency pair that a trader buys or sells in a trade. Position size is an important aspect of FOREX trading as it directly affects the potential risk and reward of a trade.
In FOREX trading, a spread refers to the difference between the bid price and the ask price of a currency pair. The bid price is the price at which a trader can sell a currency, while the ask price is the price at which a trader can buy a currency.
Japanese candlesticks, or simply “candles,” are a popular type of chart used in FOREX trading to represent price movements of a currency pair over time. A candlestick chart consists of individual candlesticks that each represent a specific timeframe, such as a minute, an hour, a day, or a week.
Each candlestick on the chart provides information on the opening, closing, high and low prices of the currency pair during that time frame. The body of the candlestick represents the range between the opening and closing prices, while the wicks, or shadows, represent the high and low prices during that period. Technical and Fundamental Analysis
Technical analysis is the study of historical price and volume data to identify patterns, trends and potential future price movements. Technical analysts use various tools and indicators, such as chart patterns, moving averages and oscillators, to analyze market data and make trading decisions.
Fundamental analysis, on the other hand, involves analyzing economic, financial and political factors that may influence the value of a currency or other financial instrument. This may include reading news articles to analyze such factors as interest rates, GDP, inflation, political stability and global events that may impact the economy.
Margin trading in FOREX refers to the practice of borrowing funds from a broker to trade a larger position than a trader could with their own funds. This allows traders to take advantage of market movements and potentially generate greater profits.
How Much Money Do You Need to Trade FOREX?
The amount of money you need to trade FOREX varies depending on several factors, including your trading goals, trading strategy and risk-management approach. A word of caution: it is important to note that having a larger trading account does not necessarily guarantee success in FOREX trading.
How much money you need to trade depends on broker-specific factors, such as minimum deposit. Each broker has its own minimum deposit; some allow a small deposit, while some are targeted at high-value traders and need a high-value deposit. Some brokers may offer trading accounts with minimum deposit requirements as low as $1, while others may require significantly higher amounts.
Another broker-specific factor to remember is leverage. Some brokers give you greater leverage than others. This affects how much money you need with which to start in the first place. You should also know that in line with your own approach to risk management, your personal preferences could mean you may want to start with a small amount or a much larger amount.
Which Currency Pair Is It Advised to Start Trading with First?
In FOREX trading, currency pairs are quoted as a ratio of one currency to another. The major currency pairs in FOREX trading are the most traded and include the following currencies: Euro, US Dollar, Japanese Yen, Pound Sterling, Swiss Franc, Australian Dollar, Canadian Dollar and the New Zealand Dollar.
These currency pairs are considered “major” because they have the highest trading volumes and are the most liquid in the FOREX market. Minor currency pairs may have much lower trading volumes compared to the major currency pairs, but they can still offer trading opportunities for traders who have a good understanding of their respective economies and market conditions.
Starting with major currency pairs when trading FOREX is generally recommended for several reasons. Major pairs give you high liquidity because everyone favors the majors. Also, major currencies are easier to analyze because the global newsreels cover them extensively. By virtue of the developed nature of the economies from which they originate, these currencies offer lower volatility. Finally, there are simply more trading opportunities with major currencies.
How to Choose the Best FOREX Broker for Beginners?
Regardless of where the brokers are based, you must first be satisfied that your FOREX broker is well-established and reliable. The best brokers are regulated by tier-1 regulators who will enforce stringent rules to ensure the safety of investor funds. Thereafter, you must assess the broker on important aspects like how long they have successfully been in business, how well-managed they are and the strength of their platforms and service offering. Other important factors include:
Commissions and Fees
A first step in FOREX trading is identifying the spread differential. While most FOREX currency pairs are traded without commission, the spread is one “cost” that applies to any trade that you place. As for commissions, FOREX trading companies can be placed into three categories. The first offers fixed spreads, while the second tenders variable spreads, with a third category of companies offering low-cost spreads but that come with a high fixed commission.
Tradable Assets and Instruments
In general, the more assets a broker offers, the better. While some brokers prefer to specialize in a small number of tradable instruments, those who have spent time developing their services to offer a truly diversified slate of instruments demand respect.
Payments, Deposits and Withdrawals
It is best to find a broker with several ways to fund your account. The broker should be able to support traditional bank transfers, as well as debit and credit cards and electronic wallets. Processing times should be kept as low as possible. FOREX Trading Customer Service
You must pick a brokerage firm that can provide good customer support around the clock. This most notable support includes the company representatives being easy to reach, fast and polite, which will, in turn, spare you of having to worry about problems later.
Trading Platforms, Tools and Features
The best brokers offer platforms that can be used by traders with different requirements. Be they Web-based or downloadable, platforms must be customizable with good technical indicators and strong risk-management tools. Even beginner traders will be looking for reliable platforms with good performance and a seamless trading experience.
Is FOREX Trading Profitable?
FOREX trading can be profitable, but it is important to understand that it also involves significant risks. The profitability of FOREX trading depends on several factors, including your trading strategy, risk management approach, market conditions as well as your level of experience and knowledge.
Some traders can generate consistent profits by following a disciplined approach to trading, using proven strategies and tools and managing risk effectively. FOREX trading is a highly competitive and complex market, and success requires a lot of hard work, patience and dedication. It is not a get-rich-quick scheme, and there are no guarantees of success.
Tips to Avoid Scam FOREX Brokers
The best way to avoid being scammed is to check that the broker you are using is regulated by a trustworthy regulator. Any broker regulated by a tier-1 regulator has had to undergo a stringent vetting of its operations.
Most scams involve criminals offering deals that are too good to be true. If the offer is scarcely believable, and the broker is putting you under pressure to trade, this is very suspicious. Other scams involve criminals creating a clone FOREX broker Website with basic functionality to dupe novice investors into thinking they are trading with a legitimate entity. Novice investors are lured to these Websites on the promise of quick wins and handsome profits.
Who is Arincen?
Put simply, Arincen is a social networking platform that brings together traders and experts to exchange expertise and ideas. Together, we evaluate the best FOREX companies in the world while offering a compressive suite of services and tools, all in one place, either via a computer or a mobile app. The platform is so rich, one can create his own private portfolio of traders and experts they like and, at the same time, follow the experts’ recommendations and investment sentiments.
Further, thanks to Arincen, users can keep an eye on market-price developments, as well as the latest news. Users can also benefit from the network’s educational courses on offer, to say nothing of exciting Webinars – all done in a modern and fast-paced work environment. Get all what you need in one place, not less, not more. In short. Arincen: We Meet to Simplify the Trading World.
The Bottom Line
With ever-improving technology, trading FOREX online is becoming a much more predictable and profitable activity. Many of the top online FOREX brokers are long-established, well-regulated brokers that are always trying to improve their products and the trading experience of their clients. With intuitive and immersive platforms, excellent amounts of insightful market analysis and trading signals, clients will find a home with any of the brokers we have recommended.
Regardless, it still falls to traders to conduct their own research before entrusting their capital with a broker. In this article, we showed you the most important factors you need to consider before selecting a broker. Be sure to conduct thorough due diligence along these lines before you decide which online FOREX broker to use.
The team at Arincen collected more than 120 pieces of data covering in excess of 100 licensed FOREX companies. Data collection was done in three ways:
Other Websites that have ranked FOREX companies.
A survey questionnaire (referred to here as Survey “1”) we had 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 own relative weight. These include licensing, deposits and withdrawals, number of assets etc.
Afterward 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 past experience.
The next step saw us evaluate and rank each company, relying on the hard work of 15 Arincen employees. We were very careful in ensuring the most accurate assessment possible, including taking into account 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 evaluate our own 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 on how we came up with the evaluation, please click here.
Which FOREX broker has the lowest minimum deposit?
The minimum deposit required to open a FOREX trading account varies among brokers and can range from a few dollars to several thousand dollars. According to our research, FXDD, XTB and IG each offer very low minimum deposit requirements.
How can I start to trade without much money?
You can develop a diverse portfolio of major and minor currency pairs without much upfront money thanks to zero-commission online FOREX trading that is readily available on the market, not least of all among the brokers we have suggested.
Is my money safe if the broker goes under?
This is often the case, but only sometimes. It depends on where your broker is regulated. Brokers regulated by the Financial Conduct Authority (FCA) in the UK are protected by mandatory investor fund protection through the Financial Services Compensation Scheme (FSCS). Similarly, American brokerage firms are mandated to become members of the Securities Investor Protection Corporation (SIPC). If you choose a broker from an area with weak regulation, it is likely that you have no fallback if the broker goes bust.
How do I select the right brokerage firm for me?
Some important matters to think about when assessing a potential broker include how much money you have and the type of assets in which you wish to invest. You should also factor in your trading style and what it means for how frequently you will need to trade. Then, you need to consider other items like account minimums, customer service levels, the availability of research materials and more.
Are earnings from trading FOREX taxable?
Yes, earnings from FOREX trading are taxable in the same way that profits from other forms of investing, like stock trading, attract tax on profits.
How can I start trading quickly?
As soon as you have clicked on the “open account” button on your broker’s Website and you comply with Know Your Customer requirements, your account will be opened, allowing you to make a funds transfer to the brokerage firm. This can take a few hours to a few days to show up in your broker’s account. Once that is complete, you can start trading.
Is it best to go with the cheapest broker?
Trading costs are important to active traders. However, other factors, like the broker’s product portfolio and trading platform, should also come into your thinking. There is no point selecting a broker on price alone and feeling short-changed by limited functionality.
Adrian Ashley is a seasoned business and finance writer. With a corporate career spanning over 20years, he has developed deep experience in such diverse areas as investing, business, finance,technology and macroeconomics. He is passionate about captu...