Best FOREX Brokers in Canada 2024

Best FOREX Brokers in Canada in 2023

Top Tips for Selecting the Best FOREX Brokers in Canada

Best FOREX Brokers and Trading Platforms in Canada

With so many choices out there, it's hard to select the best trading platform in Canada. In this case, we've done the work for you. Here is a summary of each of the top brokers according to specific criteria, along with their pros and cons:

1. ICM - Capital 91.10: Best Deposit and Withdrawal Broker

2. Tradeview - 90.00: Trusted broker that offers very low trading costs as well as comprehensive financial literacy materials for its clients.

3. XTB - 85.55: Best Customer Service Broker

4. IG - 85.45: Best Regulations Broker plus Convenient Platform

5. Saxo Bank - 80.09: Excellent Private Trading Platform

6. CMC Markets - 80.07: More than 9,000 Assets

7. ThinkMarkets - 80.05: Aimed at the Audience of Traders

What is FOREX and Why Do We Need a Broker to Trade?

The foreign exchange market is a decentralized marketplace where global currencies are bought and sold. Currency trading is conducted electronically over the counter (OTC). This means that all transactions occur via computer networks between traders all over the world rather than on one centralized exchange. The FOREX market operates 24 hours a day and five days a week (Monday to Friday), except for international holidays. The FOREX market is the largest financial market in the world. The best FOREX brokers in Canada play a key role in this marketplace by enabling clients to buy and sell through a trading platform. Most trading platforms are accessible in web and mobile format. 

How Do I Choose the Best FOREX Broker in Canada?

Regulation and Licensing in Canada

The IIROC is a powerful investment industry regulatory organization. This premier regulator enforces rules regarding the proficiency, business and financial conduct of firms operating in its ambit. At the time of writing, the regulator indicated that it oversaw the affairs of approximately 174 Canadian investment firms and more than 31,000 registered individuals.

All FOREX brokers are subject to rigorous, comprehensive training and monitoring. IIROC teams continually conduct reviews and work with firms to ensure they meet high standards of business and trading supervision while providing advice that appropriately reflects their clients’ needs

The IIROC has surveillance teams based in Montreal, Toronto, and Vancouver. The regulator’s enforcement staff ensure timely identification, investigation, and prosecution of regulatory misconduct. Where evidence of wrongdoing is established, the regulator can institute fines, suspensions, as well as permanent bans on individuals and companies.

While the CSE and IIROC call the shots in Canada, there are other major regulators around the world. If you want to read more about some of the best-regarded regulators, read our article on regulation here. As we have said, as someone resident in Canada, it’s enough that your broker is regulated by the IIROC and CSE.

Choosing a broker that is well-regulated isn't merely a matter of preference—it's a protective measure. When a broker is under the watch of a regulator, it undergoes stringent assessments to ensure transparency, fair trading practices and your financial security. Opting for an unregulated broker brings with it significant risks.

To ensure that your broker is legit, you can follow these steps:

• Ask if the broker is licensed to sell you FOREX

• Check if the broker is registered with the CSE or IIROC

• Ask if your broker is part of a compensation scheme

• Check your statements regularly to ensure that everything is above board.

Remember that it's important to comply with all applicable requirements, including any self-regulatory organizations to which brokers belong, and not just those mentioned here.

Leverage

Stop-Out and Margin

As a FOREX trader, it's crucial to understand the most important terms you'll encounter to avoid going into a negative balance. One of these terms is "stop out," which refers to a situation where a broker automatically closes some or all of your open positions to prevent your account from going into a negative balance. 

This is especially 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.

Here are the three most common stop-out levels:

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, and it gives no room for your positions to recover, even if the market turns in your favor immediately after reaching this level.

Here's how it works:

Imagine you have a trading account with a balance of $10,000, and you've opened several positions in the market. Your broker has a 0% Stop-Out Level policy, which means that if your margin level drops to 0%, they will automatically close all your open positions to prevent further losses.

• You start with a $10,000 trading account balance

• Using 30:1 leverage, you can control $300,000 worth of currency with your $10,000 account

• You open a position in EUR/USD with a notional value of $300,000, and the margin required for this trade is $10,000 (3.33% of the notional value)

• The market moves against your position, causing your account balance to drop to $9,000

• If your losses accumulate, your account balance decreases, and your margin level (account equity divided by used margin) drops accordingly 

• When it reaches 0%, the broker's 0% Stop-Out Level policy comes into play

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 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 like the 0% level but might be worded differently based on broker terminology.

It's worth noting that while stop-out procedures are meant to protect you from negative balances, they can lead to significant losses in volatile markets if positions are closed automatically, especially if the market quickly reverses after the stop-out. As such, using protective measures, like stop-loss orders and not over-leveraging, is always a good idea. Additionally, the specific percentage and the order in which positions are closed can vary among brokers, so you need to be aware of your broker's policy on stop-out levels.

Commissions and Fees

Trading fees are not always easy to monitor. Be sure to check how these fees compare with other brokers:

Spreads: In FOREX trading, a spread is the difference between the price at which a trader can buy (ask) and the price at which they can sell (bid) a currency pair. The spread can be categorized into two main types: fixed and variable.

Fixed Spreads: As the name suggests, fixed spreads remain constant regardless of market conditions. They don't change during the day and are generally set by the broker. Fixed spreads are preferred by some traders because they provide predictability, especially during times of high market volatility.

Variable Spreads: These spreads fluctuate based on market conditions. During times of low liquidity or high volatility, variable spreads can widen. However, during times of high liquidity and normal market conditions, the spreads can be very narrow. This type of spread is a direct reflection of market supply and demand.

Why do they differ?

The main reason they differ is due to their reaction to market conditions. Fixed spreads don't react to the market, giving traders a consistent spread cost. On the other hand, variable spreads can offer lower costs during normal market conditions but can widen and become more expensive during volatile times.

Example of Good vs. Worse Spreads for EUR/USD:

A good spread for the EUR/USD currency pair might be around 1.4 pips. This means that if the bid price is 1.1000, the ask price would be 1.1014.

A worse spread could be significantly higher, let's say 3.0 pips or more. In this scenario, if the bid price is 1.1000, the ask price would be 1.1030.

Traders always prefer narrower spreads because the cost of entering and exiting a trade is lower. However, it's essential to consider other factors, like the broker's reliability, platform features, and overall trading conditions when choosing between brokers offering different spreads. This article explains more about this important concept.

Commission: This is nothing more than the service charge that brokers require for carrying out transactions on behalf of their clients.

Rollover fees: When you leave a trade open overnight, the broker normally charges a rollover fee for the facility of holding your trade open for that period. This is because they assume the risk of the market changing adversely.

Withdrawal and Deposit Fees: Some platforms might charge fees for depositing or withdrawing funds. Pay attention to this. It's important to be aware of these and any associated limits or conditions.

Subscription or Inactivity Fees: Certain platforms have monthly charges or fees for inactive accounts. Ensure you're aware of these potential costs.

Trading Platforms, Tools and, Features

Tradable Assets and Instruments

Online trading offers a wide range of financial instruments, each with its own opportunities and challenges. Here are some of the most common:

• FOREX: You are reading this article because FOREX trading interests you. This type of trading involves buying and selling currencies from different countries on the foreign exchange market with the goal of making a profit. This is done through a broker with an online platform, like MT4 or MT5. FOREX brokers provide tools to traders for executing buy and sell orders in the currency markets.

• CFDs: CFDs allow traders to speculate on the future market movements of an underlying asset without actually owning or taking delivery of the asset. 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.

• Equities or stocks: These represent ownership in a company, and trading them involves buying and selling shares of publicly traded companies.

• Commodities: Items of value such as gold, oil, wheat and coffee can be traded through a broker or online trading platform. The best FOREX brokers in Canada should be able to provide you with access to commodities.

• Indices: These are a measure of the performance of a group of stocks or other assets. Trading indices involves buying and selling a basket of stocks or other assets that make up the index. Some key indices include the UK 250 and the Germany 40.

• Bonds: These are debt securities issued by companies or governments to raise capital. When you buy a bond, you are essentially lending money to the issuer, who promises to pay you back with interest later.

• Options: Options are contracts that give the buyer the right, but not the obligation, to buy or sell an underlying asset at a predetermined price and time.

• Futures: These types of contracts obligate the buyer to purchase an underlying asset at a predetermined price and time in the future. This is done through a broker or online trading platform.

To start trading, take note of these vital steps:

• Determine which financial instruments you want to trade

• Research different brokers and trading platforms

• Open a trading account with a reputable broker

• Fund your account and start trading

Remember that trading involves risks, and it's important to have a solid understanding of the financial instruments you're trading and the risks that come with the territory.

Payments, Deposits and Withdrawals in Canada

FOREX Trading Customer Service

• Quick resolution of issues
• Educational support
• Assistance with queries during volatile markets
• Account Security
• Customized advice (although not all customer service desks offer this)
• Technical assistance
• Regulatory compliance queries

Technical Aspects of the Broker’s Website

Ask Other Traders on Our Network

Which FOREX Broker has the Best FOREX Trading Platform in Canada?

Which FOREX Broker Charges the Lowest Fees and Spreads?

We found ICM’s ECN account to be unmatched for low fees and spreads. Regardless of the experience level of the trader, they can find a pricing tier that suits their needs, while still getting all the best the broker has to offer.

Which FOREX Broker Offers the Most CFDs?

Which Best FOREX Broker Offers the Most Assets?

Which FOREX Broker is Best for Professionals?

FOREX Trading Scams and How to Avoid Them

Will Your Money Be Protected If Your Broker Becomes Insolvent?

The Dos and Don’ts of FOREX Brokers

1. The FOREX brokerage firm cannot recommend a buy or sell.
2. The FOREX brokerage firm must not provide price or market expectations (rise/fall).  
3. The FOREX firm cannot control your financial dealings (deposit/withdrawal).
4. The FOREX brokerage firm should not “manage” your portfolio under any circumstance.
5. The FOREX brokerage firm cannot grant a client a bonus unless clear terms guide it beforehand.
6. The brokerage firm must not use bank accounts not under its name; and
7. FOREX brokerage firms cannot have or offer the service of account managers.

Who is Arincen and What Do We Do?

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 brokers in the world while offering a comprehensive suite of services and tools, all in one place, either via a computer or a mobile app. The platform is so rich that one can create his private portfolio of traders and experts they like and, at the same time, follow their 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 that you need in one place, not less, not more. Our motto: We Meet to Simplify the Trading World. 

Conclusion

Arincen’s Review Methodology

The team at Arincen collected more than 120 pieces of data covering more than 100 licensed FOREX companies. Data collection was done in three ways:

1. Companies’ Websites.

2. Other Websites that have ranked FOREX companies.

3. A survey questionnaire (referred to here as Survey “1”) was sent to the companies invited to participate in the exercise. We have identified 13 criteria for our assessment, each containing several aspects and carrying its relative weight. These include licensing, deposits and withdrawals, number of assets, etc.

Afterwards, we validated the data by:

1.  Registering with FOREX companies as a secret shopper and/or as Arincen.

2.  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 hard work of 15 Arincen employees. We were very 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 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 about how we came up with the evaluation, please click here.