3 Best Forex Brokers US in 2022
Finding a reliable foreign exchange broker in the United States shouldn’t be too challenging, should it? Because the foreign exchange market (Forex) is the most active financial market and the economy of the United States is the largest economy in the world, you should have plenty of options when looking for brokers for the foreign exchange market in the United States. This is when things start to become a little more difficult. Choosing the appropriate foreign exchange broker is not as simple as you might think it is due to a variety of considerations including trading expenses and regulation. Find out below what to look out for when selecting the appropriate brokers to trade forex in the United States.
How we rank our brokers
• No withdrawal fees charged by IG Markets
• Plus500, Offering a Diverse Selection of CFDs in Addition to Trailing Stop Losses
• Forex.com offers favorable trading circumstances and is regulated by the NFA.
IG Markets
IG is a household name around the world when it comes to retail brokers. Some basic facts are listed below to give you an idea of IG’s breadth as follows: Since its founding in 1974, IG has provided services to more than 239,000 customers located all over the world and has access to more than 17,000 marketplaces (over 45 years). Maintaining a steady presence year after year, decade after decade, in a sector where US Forex brokers come and go on an annual basis, displays a profound devotion to the industry. As a trader in the United States, IG provides you with access to their own web-based trading platform, which has won multiple awards, as well as mobile trading apps for iOS and Android devices. Because of its extensive online trading academy, which includes both on-demand videos and live webinars, IG is also considered to be one of the best US Forex brokers for beginners. This is because the academy provides you with the knowledge you need to be successful in the forex market.
Pros
• A diverse offering of tradable assets for forex traders
• A comprehensive selection of trading platforms, including MetaTrader 4
• Signals from Autochartist incorporated into a bespoke web-based platform
• Excellent learning resources for those just starting out in the trading industry
Cons
• A limited number of options for deposits and withdrawals
• A higher required minimum deposit, but yet within the bounds of what the market can reasonably bear
Plus500
Plus500 is a foreign exchange (Forex) company that was established in 2008. It keeps an excellent regulatory environment that is given by the MAS in Singapore, the FCA in the United Kingdom, the CySEC in Cyprus, the ASIC in Australia, the FMA in New Zealand, the FSCA in South Africa, and the FSA in Seychelles. Plus500 provides its users with a commission-free trading environment, in which they can choose to trade any of more than 2,800 different assets, including approximately 900 different options contracts. Plus500 is a good option for traders who want to seek wide diversification of assets as a result of the exceptionally wide range of choices that are available on the platform. Plus500 possesses the appropriate authorization from both the ASIC (AFSL #417727) and the FMA (FSP #486026) to be able to provide CFD trading services to New Zealand investors. Plus500 now offers its trading services in South Africa as well (Authorised Financial Services Provider #47546).
Pros
• Sufficiently governed on a worldwide scale
• A diverse portfolio of assets, including equities and options
• Order with a guaranteed stop-loss provision
Cons
• Low leverage for retail traders
• Trading platform that is below industry standards and does not support automated or social trading
• There has been no study done, and the educational material provided is of a below-average quality.
• The absence of adequate trading tools
Forex.com
If you are seeking for the best Forex broker in the United States, you should put Forex.com on your list of potential options. Forex.com is a true global market leader. You, as a trader in the United States, can be at ease knowing that Forex.com complies with all of the relevant rules that are required of Forex brokers who accept customers from the United States. Due to the fact that StoneX Group is a publicly traded business on the NASDAQ exchange, Forex.com is required to adhere to the highest possible standards of corporate governance, financial reporting, and disclosure. Forex.com provides its own Advanced Trading Platform, which is geared toward professional traders and comes equipped with a number of advanced features and integrated trading tools. Forex.com is the greatest option for regulatory compliance, trading platforms, and trading software since it offers lightning-fast execution speed and complete visibility into its operations.
Pros
• Lower minimum deposit
• You can open an Islamic account here.
• A favorable public image
• A selection of available account types
Cons
• Withdrawal fee
READ THIS ENTIRE ANALYSIS OF FOREX.COM
How to Pick a Forex Broker if You Live in the United States
When deciding whether or not to recommend a specific US forex broker, the staff here at DailyForex takes a number of factors into consideration. Similarly, as a US trader, you should conduct a comprehensive analysis in which you take a number of factors into consideration in order to locate the best US forex broker. While we undertake a significant portion of the legwork for you, we have compiled a checklist that you may complete on your own to determine which Forex brokers offer the finest services to traders in the United States.
Spreads, commissions, and leverage are the three main costs associated with trading.
Unless you make very few trades and hold for an extended period of time, the cost of spreads and commissions (if they are levied) is going to be the single largest cost you incur when it comes to trading. This is the case even if you hold positions for an extended period of time. Do not rely on what you see in a broker’s demo account because the spreads you see there typically do not reflect what you will face in a real, live money account. It is important to be sure that you really know what spreads and commissions are going to be and that they are going to be exactly as they are going to be.
Another crucial concern is leverage, which refers to the amount of money that a broker will permit you to borrow in order to trade. If you are looking for high leverage, it is crucial to examine the maximums allowed for each asset class before you open an account with a broker. Nearly all brokers give pretty liberal leverage on forex and a wide variety of other asset classes; nevertheless,
2. Various Types of Accounts
Some Forex brokers in the United States give their customers the option to choose between several distinct kinds of accounts. The sort of account that is most suitable for you will most likely be determined by the amount of the needed minimum deposit, the assets that you intend to trade, and the frequency with which you trade.
Listed below are some guidelines that should help you determine which sort of account will serve your needs the best:
• Deposits that are less than $500 can be accepted into the Micro Account.
• The Mini Account accepts deposits of less than $10,000 and is going to be the more appropriate vehicle for the vast majority of retail Forex traders who have more than $500 to deposit.
• The Standard Account is best suited for more experienced traders who have a minimum deposit of $10,000 and can accommodate larger sums. There is little doubt that if you are able to make a greater deposit, you will get a better deal on total costs and other trading conditions. This is true regardless of whether or not you have the financial means to do so.
3. Minimum Deposit
When accepting new customers, the majority of Forex brokers in the United States need a certain minimum deposit amount. This is reasonable given that brokers have their own operating fixed costs and must pay those charges whenever a new account is opened and maintained. The minimum deposits demanded by the most reputable forex brokers in the United States, which typically vary between about $100 and $250, are thankfully rather low and within most Americans’ financial reach. It is imperative that you keep in mind that these minimums are not deducted from the ongoing balances of your account; rather, they indicate that in order to open an account, you are required to make an initial deposit of a certain minimum amount.
4. Trading Apps
The image of a Forex trader as someone who is hooked to their laptop or desktop computer is an outdated stereotype. An increasing number of people are trading utilizing mobile applications, not the least of which is due to the fact that using a trading app enables users to watch and trade markets regardless of where they are or what time of day or night it is. This does not imply that app traders are constantly watching the market; rather, it indicates that they make wise use of applications by configuring their trading apps to notify them whenever the market experiences an event of interest.
Every forex broker in the United States will eventually offer their very own specialized trading app, the majority of which will reach exceptionally high quality standards.
5. Providing Service to Customers
Personal customer service is the kind of assistance that you probably won’t ever use, but in the event that you do, you want to be sure that it is available to you at a level of quality that is satisfactory.
You are unlikely to find yourself in a position where you are unable to obtain assistance if you reach out and ask for it, or even if you do not. This is because the number of US Forex brokers is relatively low, and most of them have excellent reputations. In addition, the American culture places a high value on customer service.
You should be able to troubleshoot a solid majority of any operational challenges you might find in your trading if you use the automated FAQ searches that are offered by all Forex brokers that cater to US customers today.
Is It Okay to Trade Foreign Currency in the United States?
Yes. You are permitted to engage in foreign exchange trading in the United States. US regulations are in place to ensure that forex brokers that accept US clients are subject to adequate oversight to ensure they behave in a manner that is both ethical and legal.
Acquiring Knowledge of the US Foreign Exchange Market
Because of the size of its stock market, the United States already had a sizable community of retail traders, thus it should not come as a surprise that US traders immediately embraced Forex into their trading. Moving from stocks to the foreign exchange market was particularly appealing to me as a trader from the United States because of the substantial leverage that is available in the foreign exchange market in comparison to equities.
The level of competition among Forex brokers headquartered in the United States has increased in recent years due to the growing popularity of currency trading. Retail traders who are just starting out frequently lack knowledge about the various kinds of brokers that are on the market and struggle to determine which one will serve their needs the best. In order to assist you in selecting the FX broker that best meets your needs, we have conducted a comprehensive study of all regulated Forex brokers in the United States and have culled the resulting list down to our top US Forex firms. Our investigation consisted of countless hours of laborious work, and we did all of this so that you can make an informed decision about where to start your journey in Forex trading. Through our own independent research, we were able to identify the type of broker that is best suited to meet the requirements of a wide range of traders, including novice retail traders, day traders with years of experience, and seasoned professionals.
The United States dollar is the most widely used currency in the world and is often regarded as the reserve currency. The cost of most commodities, including oil, gold, and others, is expressed in US Dollars. Additionally, the equities market in the United States is the largest in the world, as was noted earlier. As a consequence of all of these considerations, the United States dollar is the primary currency traded on the foreign exchange market. Forex pairs that include the USD are referred to as “major pairs,” and some examples of these pairs include EUR/USD, USD/JPY, GBP/USD, and others. Having said that, US forex brokers typically provide trading in currency pairs that do not include the US Dollar. Some examples of these pairs include EUR/JPY, CAD/JPY, GBP/NZD, and others. “Crosses” refers to any currency pair in forex that does not include the US Dollar. You can trade main forex pairs as well as crosses if you are located in the United States.
Regulation of the US Foreign Exchange Market
The finest US-based forex brokers conducted their operations properly when they first arrived on the market to satisfy the new demand from retail traders. However, other US-based forex brokers did not act with integrity or in a way that suited the interests of their customers. US regulators rapidly came to the conclusion that they could not tolerate Forex brokers accepting US consumers engaging in unethical business practices or stealing money from customers.
It was only a matter of time until forex brokers admitting US clients were subject to similar levels of severe scrutiny. This was because the US financial sector in general was already heavily regulated prior to the introduction of retail forex trading in the country. To put it mildly, as a US trader, you want to be protected from brokers that do not conduct their business in an honest manner. This is a positive development.
What exactly is the market regulation in the United States?
If you are receiving services from a US foreign exchange broker, that broker is required to be regulated by the Commodity Futures Trading Commission (CFTC) and a member of the National Futures Association (NFA) (NFA). The Background Affiliation Status Information Center (BASIC) is the name of the online verification system that the NFA provides. With this system, Forex brokerage businesses can have their compliance with the relevant regulatory requirements as well as their approval checked.
How You Can Benefit from a Market That Is Regulated
You will benefit in two different ways from the regulation of forex in the United States. In the first place, it ensures that licensed US Forex brokers are well run and funded, which helps minimize the risk that your broker will fail, leaving you waiting to get your deposit returned while you wait for the bankruptcy processes to be finalized. Second, it ensures that your broker cannot take unfair advantage of you and must provide you with a fair market as well as the trading conditions that their advertising promises. This protects you from being taken advantage of in an unfair manner.
How to determine if Your Broker is Subject to Regulation
Forex brokers that are subject to regulation always make public the information required to verify by whom they are governed, as well as, in most cases, the specifics of their license. It is typically published at the bottom of the website’s home page, and in other cases, it is published at the bottom of each page contained on the website. Forex brokers who are regulated typically also have a dedicated website page on which they provide comprehensive and detailed information about their regulatory structure.
Dodd-Frank Act
The Dodd-Frank Act, which is a package of laws that was established in the United States in 2008 as a response to the financial crisis, had a significant impact on forex brokers in the United States. Many people believe that the severe laws were the cause of US forex brokers shifting their operations overseas or entirely shutting down their businesses. Those foreign exchange brokers in the United States who are still in business must now satisfy some of the most strict capital requirements demanded of Forex brokers anywhere in the world, in addition to paying significant licensing fees.
It is important to keep in mind that the Securities and Exchange Commission (SEC) does not consider currency pairs to be securities, which is the reason why it does not have any power over the foreign exchange market.
The funds deposited by customers with US-based Forex brokers are not covered by any kind of deposit insurance of any kind. In spite of the absence of this protection, US Forex Brokers are still considered some of the safest in the world because to the rigorous control provided by the CFTC and the NFA.
This maximum leverage cap is designed to safeguard regular traders from the risks associated with using excessive leverage, and the leverage limit for US-regulated forex brokers is restricted at 50:1. It also indicates that the top US Forex brokers all operate according to the same maximum permissions for leverage, which eliminates leverage as a criterion when selecting among the best US Forex brokers for either novice or experienced traders.
As a parting thought concerning the regulation of the foreign exchange market in the United States, I would like to advise US traders that if they come across an overseas foreign exchange broker that is not registered with the NFA but accepts customers from the United States, they should exercise extreme caution before handing over their deposit. Working with the finest US Forex brokers is beneficial for both novice and experienced traders since it ensures that your trades will be carried out by a dependable and trustworthy company.
Working with US-based forex brokers comes with a number of benefits.
The question that needs to be answered by you, as a retail trader in the United States, is whether or not these imposing limits are beneficial to retail traders. The fact of the matter is that stringent rules have both positive and negative effects. As a disadvantage, the tight standards have made it difficult and expensive for forex brokers to accept customers from the United States, which has, in turn, reduced the number of forex brokers who are willing to work with customers from the United States.
On the bright side, those forex brokers that cater to US citizens have put in a lot of effort to ensure that they satisfy all of the regulatory requirements. They will be well-capitalized, have outstanding compliance, and most importantly they are serious about staying in the sector for the long-term.
It is much simpler to navigate the environment because all US-regulated Forex firms are subject to the same set of laws. There are no distinctions at the regional or state level. Because of this, while comparing one US Forex broker with another US Forex broker, you can rest assured that they will both operate according to the same set of standards. As a result, you may use other criteria to evaluate which US Forex broker is the best.
The Times That the US Forex Market Is Open To Trade
The foreign exchange market in the United States is dominated by retail investors in the eastern time zone. Even though the Foreign Exchange (Forex) market is open twenty-four hours a day, seven days a week, there is a general consensus that the opening time for US traders is eight in the morning Eastern Time. This is despite the fact that the market operates around the clock. Due to the fact that London and other European centers are still working during the first few of hours of the US open, these hours are often the ones with the highest volume of trading activity within any given 24-hour forex period.
FAQs
Do the United States allow forex trading?
Yes. Trading foreign exchange is not only permitted, but also strictly governed by the National Futures Association (NFA) and the Commodity Futures Trading Commission (CFTC) in the United States (CFTC).
Which forex broker is the best for beginning traders in the United States?
Check out our up-to-date list of the most reputable US brokers operating in the market today to ensure that the broker you choose will meet all of your requirements as a new trader in the US market. In our reviews, we evaluate the various brokers to see which ones provide the finest support and educational resources, so that you can get off to a good start.
How does one get started trading forex in the United States?
Finding the best US Forex brokers who will execute your trades when you switch to a live account and having a trading methodology or strategy that you have successfully tested on a demo account are the two most important steps toward becoming a successful trader in the foreign exchange market in the United States.
Is there no withholding tax on foreign exchange in the United States?
In the United States of America, Forex profits are not exempt from taxation. Traders who only hold positions for a short period of time are subject to the same unfavorable tax treatment. Profits from spot forex trading are subject to taxation as commodity 1256 contracts or under Section 988 of the Internal Revenue Code.
Does the IRS receive reports from forex brokers?
Yes, in accordance with the rules of the United States, all Forex brokers operating in the United States, as well as those located outside the country that accept US citizens or residents as customers, are legally required to disclose the trading gains of their clients to the Internal Revenue Service.
Which forex brokers are available to Americans?
People living in the United States are free to work with any foreign exchange broker who is willing to do business with them. Because Forex brokers outside the USA who accept US persons as clients are required by US law to report to the CFTC, very few Forex brokers outside the USA will accept US persons as clients. This is because US brokers are required to report trading activity to the CFTC. Even while it appears that dealing with foreign brokers who do not disclose to US authorities does not constitute a criminal offense, many Americans experience anxiety when doing so. This results in a somewhat limited selection of Forex brokers available to people residing in the United States.
Are US citizens permitted to trade forex outside the country?
Even if they do not report to the CFTC, US individuals are of the idea that they are allowed to trade forex with foreign brokers even if they are located outside of the US. However, there are very few foreign brokers who will work with US citizens as customers. It appears that the trader is within their rights to do so, but it is questionable whether this is the best course of action.
Are you able to use American Express with Forex brokers?
There are some Forex brokers that will accept American Express as a funding source, while there are others that will not.