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Best forex brokers in 2018

6 June, 2018
Best forex brokers in 2018

Choose the best forex broker, we did the research for you. We tested in-depth only quality online brokers available for European and US customers. We evaluated fees, funding, withdrawal, product portfolios, account opening, trading platforms and more.

As a result, we filtered out the forex brokers with the highest quality and the lowest fees.  

Our top five picks for the best forex brokers in 2018 are:

Broker Description From which regions you can open an account?
Saxo Bank Danish investment bank Worldwide except for the US
Interactive Brokers Leading discount broker from the US Worldwide
Pepperstone Australian discount forex broker Worldwide except for the US
FXCM UK forex broker Worldwide except for the US
Oanda US discount forex broker Worldwide

Head to our country selector to get detailed info on which broker is available in your country.

We have created two forex broker categories: stockbrokers offering forex and forex-only brokers. At the stockbrokers, you can also trade with other instruments like stocks and bonds. At forex-only brokers, you can trade with forex and in some cases CFDs.

 

BEST STOCKBROKERS OFFERING FOREX

  Saxo Bank Interactive B.
Fee structure ★★★★ ★★★★★
Funding and withdrawal ★★★★★ ★★
Forex product portfolio ★★★★★ ★★★★★
Account opening ★★★ ★★
Trading platform (web) ★★★★ ★★
Overall rating 4.8 4.4

BEST FOREX-ONLY BROKERS

  Pepperstone FXCM Oanda
Fee structure ★★★★ ★★★★ ★★★★★
Funding and withdrawal ★★★★★ ★★★★★ ★★★★
Forex product portfolio ★★★★ ★★ ★★★
Account opening ★★★★★ ★★★★★ ★★★★★
Trading platform (web) ★★★★★ ★★★ ★★★★
Overall rating 4.3 4.2 4.1

If you are a beginner, be very careful with forex trading. You can easily lose all of your money within a couple of seconds. The best way to start is to open a demo account and start learning. All of the mentioned brokers above offer a demo account. A demo account is where you can try out trading with paper money, without risking your own savings. Improve your learning further at the forex trading 101 chapter.

best-forex-brokers-number-of-currency-pairs

Not sure which forex broker to choose? For a personal broker recommendation, check out Brokerchooser's broker selection tool. You input your preferences and you get a personal recommendation fitting your needs.

Want to see more options? For comparing all the brokers, visit our comparison page.

Best forex brokers
What makes a good forex broker?

Trading with forex became really popular in the last decade. Keeping your eyes on important criteria like fees or depth of product portfolio helps you find the most suitable broker for you. 

We tested brokers according to more than 60 criteria. In this article, we will uncover the 5 most important criteria you must take into account of choosing the most suitable forex broker.

The 5 most important criteria for forex brokers are:

1. Fee structure: The overall cost of a typical forex trade can be 10-15 times higher at one forex broker compared to another. Worth to check the fees.
2. Funding and withdrawal:  Transferring money to your account can be 5 times longer and more expensive at one forex broker compared to another.
3. Product portfolio: You want to invest in NZD/USD and EUR/TRY currency pairs? They might not be available. Check the product coverage before opening an account.
4. Account opening: Some brokers require at least $10,000 to invest, others don't set a minimal first-time deposit. Check out what the best forex brokers require.
5. Web trading platform: A user-friendly and well-equipped trading platform can significantly increase your trading comfort.

Best forex brokers
Comparing forex broker fees

Fees, fees, and fees. We bet this is on top of your mind when you want to select the best forex broker. Let's kick off with fees than. 

It is not easy to compare forex broker fees, but we are here to help. You need to calculate with two fee categories: trading-related fees and non-trading fees.

You can compare below the trading-related and the non-trading fees.

Trading fees

Brokers can charge commissions, spreads, and financing fees.

Forex brokers apply two trading fee methods. The first version is when all of the trading fees are included into the spread except the financing rate. Imagine that the broker gives you a wider spread than it gets from the market. The difference is its profit. The other method is when you get the same spread what the broker receives from the market, but you pay a commission based on the traded amount. We believe the latter is more transparent, however, this doesn't mean the first method cannot be cheaper.

Saxo Bank and Interactive Brokers have a spread+commission pricing policy, while forex-only brokers usually include their trading costs into the spread.

When you hold a forex position overnight, you have to pay a daily financing fee for the broker. This also called rollover fee.

First, we compare the overall costs of a typical $20,000 forex trade. After that, you can check the spread and the financing fee comparison.

 

Overall cost of a $20,000 forex trade

To make your life easier we will compare the trading cost of a major and a minor currency pair for a typical $20,000 trade. The trading cost includes the commission and the spread cost. The spread cost is an implicit cost, but the wider the spread the higher your spread cost will be.

Stockbrokers offering forex

The trading cost of a $20,000 trade Saxo Bank Interactive Brokers
EURUSD $3.2 $2.3
NZDUSD $4.3 $2.7

Forex-only brokers

The trading cost of a $20,000 trade Pepperstone FXCM Oanda
EURUSD $1.1 $1.1 $1.1
NZDUSD $2.1 $2.8 $2.2

The forex-only brokers are more competitive in pricing, especially Pepperstone and Oanda.

 

Spread-only comparison

The spread comparison is not as relevant as the all-inclusive trading cost, because you compare apple with pear. 

Stockbrokers offering forex

Typical spread Saxo Bank Interactive Brokers
EURUSD 0.2 0.3
NZDUSD 0.9 0.5

Forex-only brokers

Typical spread Pepperstone FXCM Oanda
EURUSD 1.2 1.3 1.2
NZDUSD 1.5 2.0 1.6

Both Saxo Bank and Interactive Brokers have very competitive spreads but bear in mind that the spreads are only one part of the costs.

Among the forex-only brokers, Pepperstone has the most competitive spread.

 

Financing fees

When you trade forex on leverage and hold your position overnight, a fee will be charged. This fee is called rollover or financing fee.

The amount of the financing fee depends on the currency pair you trade and on the chosen broker. The higher the typical yearly financing rate, the more you have to pay overnight.

Stockbrokers offering forex

Typical yearly financing rate Saxo Bank Interactive Brokers
USD 9.45% 2.95%
EUR 8.00% 1.50%

Forex-only brokers

Typical yearly financing rate Pepperstone FXCM Oanda
USD Not transparent 5.32% 1.70%
EUR Not transparent 2.65% 0.40%

You can see that Oanda has the lowest financing fees. Furthermore, Interactive Brokers has much lower financing rate than Saxo ans it is also competitive among the forex-only brokers.

 

Non-trading fees

The deposit, withdrawal and inactivity fees are the most important non-trading fees, all listed below.

Stockbrokers offering forex

Fee category Saxo Bank Interactive Brokers
Deposit fee No No
Withdrawal fee No One free/month, $10 for the rest
Inactivity fee $100/6 months after 6 months inactivity $10/month - your monthly generated commission

 Forex-only brokers

Fee category Pepperstone FXCM Oanda
Deposit fee 3% for credit/debit card, free for other deposits No No
Withdrawal fee

$20 for international bank transfer

It depends on the currency, the type of transfer and the origin of your account. Here you can see the costs.

€15 for bank transfer

Inactivity fee No $50/year after 12 months of inactivity €10/month after 2 years of inactivity on the account

Now that we compared the fees, trust us, you need to look into a bit deeper than just fees when selecting a broker for forex trading. Let's investigate the best forex brokers one by one. 

Best forex brokers
Part A: Stockbrokers offering forex

Saxo Bank

BACKGROUND:

Danish investment bank specializing in online trading and investments.

RECOMMENDED FOR:

Investors aiming for a great research and trading platform with a broad access to the international markets.

OVERALL SCORE:

4.8/5

MINIMUM DEPOSIT:

$2,000

NEGATIVE BALANCE PROTECTION:

No

Visit broker

 

best-forex-brokers-blogpost-saxo-bank-web-trading-platform

1. Fee structure ★★★★☆

Saxo Bank has an okayish fee structure. Its trading fees, including forex fees, are not the most competitive. Most of its non-trading fees are favorable, except the financing rate.

2. Funding and withdrawal – ★★★★★

Saxo has an easy interface and multiple options to fund and withdraw money. You can transfer money via bank transfer or credit/debit cards. Furthermore, the withdrawal is free of charge.

3. Forex product portfolio –  ★★★★★

Forex

In Saxo forex trading, you can reach 100 major and minor currency pairs. This number is quite good, compared to Interactive Brokers’ 105 currency pairs. Saxo was one of the global broker institutions signed up the Fx Global Code of Conduct showing their commitment to customer protection and transparency.

Other asset classes

  • Equities
  • ETFs
  • Bonds
  • Options
  • Futures
  • CFDs
  • Cryptos

4. Account opening – ★★★☆☆

Account opening is available for almost all residents and is fully digital. However, a $2,000 minimum funding is required.

5. Web trading platform – ★★★★☆

Saxo Bank's trading platform, the SaxoTraderGO is a great platform. It is easy to navigate and provides all features. On the flip side, its customizability is limited.

 

Full Saxo Bank Review

 

Interactive Brokers

BACKGROUND:

Interactive Brokers is one of the biggest US-based discount brokers

RECOMMENDED FOR:

Traders aiming low fees and can deal with a complicated trading platform

OVERALL SCORE:

4.4/5

MINIMUM DEPOSIT:

$10,000

NEGATIVE BALANCE PROTECTION:

No

Visit broker

 

best-forex-brokers-blogpost-interactive-brokers-web-trading-platform

1. Fee structure ★★★★★

Interactive Brokers has a competitive and transparent fee structure. 

2. Funding and withdrawal – ★★☆☆☆

Only bank transfer is available to European customers. For more information on US funding and withdrawal options, check IB's website.  

3. Forex product portfolio – ★★★★★

Forex

In forex trading, you can reach 105 currency pairs including the major and minor ones. This is a really wide offering and only a few competitors can provide a similar forex portfolio.

Other asset classes

  • Equities
  • ETFs
  • Funds
  • Bonds
  • Options
  • Futures
  • CFDs
  • Cryptos
  • Asset management service

4. Account opening – ★★☆☆☆

At IB, you can choose from a great variety of account base currencies and account types. On the other hand, the account opening process is slow and complicated. Furthermore, a $10,000 minimum account balance is needed. 

5. Web trading platform – ★★☆☆☆

Interactive Brokers' web trading platform is good for execution with a very advanced order management panel. However, standard functions like technical analysis are missing or underdeveloped.

 

Full Interactive Brokers Review

Best forex brokers
Part B: Forex-only brokers

Pepperstone

BACKGROUND:

Pepperstone is an Australian discount forex broker.

RECOMMENDED FOR:

High volume FX traders.

OVERALL SCORE:

4.3/5

MINIMUM DEPOSIT:

None

NEGATIVE BALANCE PROTECTION:

Yes

Visit broker

best-forex-brokers-blogpost-Pepperstone-web-trading-platform

1. Fee structure ★★★★☆

Pepperstone provides competitive and transparent trading fees. However, gathering together the non-trading fee information is not a piece of cake. This is especially true for the financing cost information which is not provided at all.

2. Funding and withdrawal – ★★★★★

You will have a wide variety of funding and withdrawal options. You can transfer money through bank transfer, electronic wallets plastic cards and so on.

3. Forex product portfolio ★★★★☆

You can trade with only forex and CFDs

Forex

With over 80 currency pairs, Pepperstone offers a wide range of forex trading possibilities. 

Other asset classes

  • CFDs 
    • Stock Indexes 
    • Cryptocurrencies 
    • Commodities 

Pepperstone's CFD offering is average, with 14 stock indexes, 4 cryptocurrencies, and 14 commodity pairs to choose from.

4. Account opening – ★★★★★

Pepperstone does a good job with their account opening, residents of most countries may open an account, and the process is straight-forward.

5. Web trading platform – ★★★★★

Pepperstone offers well designed, user-friendly third-party trading platforms, MetaTrader 4 and cTrader. 

 

Full Pepperstone Review

 

FXCM

BACKGROUND:

FXCM or Forex Capital Market is a London-based forex broker offering forex and CFD trading.

RECOMMENDED FOR:

Forex traders looking for easy account opening, funding, and withdrawal processes.

OVERALL SCORE:

4.2/5

MINIMUM DEPOSIT:

None

NEGATIVE BALANCE PROTECTION:

No

Visit broker

 

1. Fee structure ★★★★☆

FXCM offers some of the most competitive trading fees on forex trading. On the flip side, a lot of non-trading fee is applied.

2. Funding and withdrawal – ★★★★★

Funding and withdrawal are easy and fast with FXCM. Funding is free of charge, while withdrawal fees range from zero to $40.

  • Bank transfer: Free for funding, withdrawal fees depending on your location range from zero to $40.
  • Debit/credit card: Minimum funding is $50, note that you can only withdraw to the same card that you funded with.
  • Other options: ACH, Skrill, UnionPay.

See our full FXCM review for further details. 

3. Forex product portfolio – ★★☆☆☆

Forex

FXCM gives you access to 39 currency pairs. This is a narrow product offering compared to its competitors', like Pepperstone's ~80 or Oanda's 55.

Other asset classes

  • CFDs 
    • Stock Indexes 
    • Commodities 

FXCM's CFD offering is below average, with 12 stock indexes, and 7 commodity pairs to choose from. FXCM does not offer cryptocurrency CFDs.

4. Account opening – ★★★★★

The account opening process at FXCM is hassle-free and straightforward. It takes roughly 30 minutes to open an account, you can choose from multiple base currencies, and there isn't a minimum balance requirement.

5. Web trading platform – ★★★☆☆

FXCM's Trading Station platform is easily customizable and includes useful functions, like clear fee report. On the flip side, the platform's design is not user-friendly and some bugs occurred during the testing.

 

Full FXCM Review

 

Oanda

BACKGROUND:

Oanda is a privately held discount forex broker with US origins.

RECOMMENDED FOR:

Price-sensitive FX traders.

MINIMUM DEPOSIT:

Standard: None

Premium: $50,000

OVERALL SCORE:

4.1/5

NEGATIVE BALANCE PROTECTION:

No

Visit broker

​​​​​​best-forex-brokers-blogpost-oanda-web-platform

1. Fee structure ★★★★★

Oanda's spreads are almost the same as those of Pepperstone's. Its financing costs are transparent which is not true for Pepperstone.

2. Funding and withdrawal – ★★★★☆

Funding or withdrawal is possible via debit/credit card, PayPal, and bank transfer. Credit/Debit card funding is immediate, while bank wire transfer may take up to 5 business days. One withdrawal per month through credit/debit card or PayPal is free of charge.

3. Forex product portfolio ★★★☆☆

Oanda's forex offering lags behind Pepperstone's. However, Oanda has a wider CFD offering.

Forex 

The menu is full here as you can find all major and a lot of exotic pairs, over 55 of them, which is a good amount. A useful feature is the real-time rate and spread check option from the website

Other asset classes

  • CFDs: 
    • Indexes 
    • Commodities 
    • Precious Metals
    • Government Bonds 

Oanda offers 16 indexes, 8 commodities, 19 forex/precious metal, 4 precious metal, and 6 government bond CFDs.

4. Account opening – ★★★★★

From start to finish you can calculate with less than 10 minutes to be able to open your account. Beyond the speed, the account opening process is fully digital and straight-forward.

5. Web trading platform – ★★★★☆

Oanda's trading platform is very user-friendly and offers an easy learning curve.

 

Full Oanda Review

Best forex brokers
Forex trading 101

Forex trading looks simple, but involves serious risks. Understand the basics and find out if this is the right way for you.

Understanding the forex market

Forex, FX, foreign exchange or currency market. You have probably already heard one of these expressions. They all mean the same: a market where you can exchange currencies or bet on the price movement of currency pairs.

The forex market has several outlets, from the currency exchange store on the street until the currency trading desk of big banks.

For a non-professional individual, as you probably are, the easiest and safest way to trade forex is by opening an account at a reliable online broker.

The vast majority of the currency transactions are conducted on OTC (over-the-counter) markets. An OTC market is a non-regulated market. On a non-regulated market, you have to assess for yourself how safe your counterparty is. For example, when you travel abroad to an exotic country and you need to exchange some money, you usually go to a bank office instead of changing money on the street. This is how you minimize your counterparty risk. You have to do the same risk minimization when you select your online broker for trading forex. You better go with a reliable one.

Forex trading is very tempting for the following reasons:

  • everybody has an opinion on where the currencies are going,

  • forex market for the first sight it is relatively easy to understand compared to other markets, like the stock market,

  • by using leverage, a trader can easily trade with 100 times more than he/she has on the trading account,

  • the market is open 24 hours a day, 5 days a week,

  • it is the most liquid market in the world, meaning it has tons of transactions every second and you do not need to worry about not finding a partner to trade with.

Although it looks easy, trading with forex can be risky if you don't know what you are doing. By using high leverage inappropriately, you can easily lose all of your money within a couple of seconds. So you better start off slow,  learn and open a demo account first. If you want to study more, check out our blog post about the best trading apps for learning.

Forex market trading hours

The forex market is open from 11:00 PM Sunday until 11:00 PM Friday, London time.

The highest trading activity within each day is when London and New York are open.

best-forex-brokers-blogpost-market-trading-hours

It is good to know that there is a difference between currency conversion and forex trading.

The end result of a conversion is basically changing one currency to another. Imagine you receive your salary in euro, but you spend it in GBP. In this case, you exchange the euros to pounds. At the beginning of the transaction you had euro and at the end, you will have pounds.

When you trade with currency pairs there is no physical conversion happening. Imagine you have an online broker account in US dollars and you want to bet on the price movements of the EURUSD. In this case, you effectively never convert your dollars to euro. If your bet was correct, the profit of your trade will be booked into your account in US dollars. If you were wrong, the loss will be deducted from your account in dollars as well.

Breaking down the forex trading jargon

When you trade forex, you bet on the price change of a currency pair, for example, the EURUSD.

EURUSD bid price EURUSD ask price
1.1700 1.1705

First of all, you need to understand the bid and the ask price. Let's take the EURUSD again as an example. The bid is the price at which you can sell the EURUSD, or in other words to go short in it. If the price goes lower, you will generate profit. The 'ask' price is the opposite. If you want to bet on the price increase, you can open a trade on the 'ask' price. The mid-price is usually half way between the two, but it is just a theoretical price, it is not used for trading.

The actual bid and ask prices together are called the quote.

A long position is when you bet on the price increase, while a short position is when you profit from the price decrease.

The spread is the difference between ask and bid price. In the example above the spread is 0.0005 that is calculated as 1.1705-1.1700.

The pip is the smallest amount of a currency pair. One pip is equal to 0.0001 for most of the currency pairs. In case of our example, the spread is 5 pips, or 5 times 0.0001, equalling 0.0005. For some currency pairs like the USDJPY, one pip is 0.01.

The leverage enables you to take bigger positions than the amount of money on your account. Imagine this as a multiplier of your profit or your loss. This can be as high as 300. Imagine you have one thousand dollars on your account and your applied leverage is 100. If you open a long position by using all your $1,000, this means you open a trade for $100,000, $1,000*100. If the price decreases 1%, you will lose $1.000 (1%*$100,000), all of your money on your account. And the price of a currency pair can very easily decrease by 1%. In case of EURUSD, this would mean a price decrease from 1.1705 to 1.1588.

A lot is the standard number of units of a forex contract. It is usually 100,000 of the base currency. The base currency is the first currency in a currency pair. For EURUSD, the base currency is the EUR and one lot is €100,000. A mini lot is 10.000, a micro 1,000 and a nano 100 unit of the base currency.

You can meet three types of contract in forex trading, spot, forward and futures. The spot forex contract is traded by most of the people and you are also trading a spot contract when you use an online broker. A spot contract by definition is settled after two days of the trade. The settlement means the counterparties who traded are converting their currencies between each other at the price of the trade made two days earlier. Imagine the settlement as a currency conversion made at an exchange office on the street. The only difference is that this happens two days after the price was agreed on.

However, the settlement doesn't happen in most of the cases, because spot contracts are rolled over before the settlement. This is always the case when you trade forex with your online brokers. The rollover happens because when you are betting on the direction of a currency pair, you do not want to effectively exchange money. You just want to bet on the price movement. The rollover ensures that the conversion will not happen.

When your position is rolled over, your online broker in the background is basically closing your current spot position and opens a new one. This is not visible for you but has a fee, the rollover fee or financing fee. The rollover fee is calculated from the interest rate difference between the two currencies you are trading. It can also happen that you receive a fee from the broker if the interest rates you trade are in your favor. 

A forward forex contract is a contract made on the OTC market. The specifics of the contract, like the term, the price and the settlement are defined by the counterparties case by case. For example, imagine a company which needs $100,000 in 30 days for paying its employees, but it will receive its revenue in euro. Since it wants to specify the exact exchange rate it can get in 30 days, it will seal a forward contract with a big bank at a fixed price, let's say 1.1710. After 30 days they will exchange the currencies and the company will receive €85,397 ($100,000/1,1710). Here the settlement actually happens.

A futures forex contract is traded on a regulated market, for example, a commodity exchange, like the Chicago Mercantile Exchange (CME). When you trade futures, your counterparty is the exchange and the specifics of the contract are predefined by the exchange. When your counterparty is a regulated exchange, you don't need to check your counterparty risk, this is one of the safest modes of trading. However, the exchange requires high initial money for trading, so this is not suitable for you with little money to invest. For example, if you want to trade one EURUSD futures contract on the CME, you need to have more than $2.000 on your account.

 

What drives the forex market price?

As told before, in the forex market, everybody has an opinion, because it seems simple to have one. However, currency markets are among the most unpredictable ones in the world.

Everything from monetary policies, government spendings, politics to wars can influence the price change of the currency pairs. The prices have so many influential factors it is hard to make an estimate on them.

Although, economic calendars can be on your help, so at least to know those scheduled events that can influence the forex market.

Best forex brokers
Bottom line

We hope, you managed to pick your favorite from the recommended best forex brokers. If you are still uncertain which the best forex broker in 2018 is, this little summary might provide further clarity.

Stockbrokers offering forex

Beginners can feel comfortable with Saxo Bank, while more advanced traders would appreciate its great tools, charts and a wide range of research. However, its fee structure is mid-range, not the most competitive.

 

Visit broker

best-forex-brokers-blogpost-saxo-bank-logo.

Interactive Brokers is designed for advanced traders and investors. We like it since it has tons of functions, a competitive fee structure, and great markets coverage, but stay away if you are a beginner.

 

Visit broker

best-forex-brokers-blogpost-Interactive-Brokers-Logo

Forex-only brokers

If you are looking for a forex broker with competitive pricing, and a world class customer support, try Pepperstone. Account opening is quick and user-friendly, no minimum balance, with many funding options to choose from. 

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best-forex-brokers-blogpost-pepperstone-logo

FXCM offers fast account opening, has great fees, and it is easy to fund and withdraw your account. However, the web trading platform is not user-friendly and lacks more sophisticated functionalities. 

 

Visit broker

best-forex-brokers-blogpost-fxcm-logo

When looking for a well-estabrlished broker with a forex focus, try Oanda. It has a very competitive forex pricing, fast and fully digital account opening, no minimum balance, and strong technical analysis tools.  

 

Visit broker

best-forex-brokers-blogpost-oanda-logo

Still not sure? Get a personal recommendation.

 

Gergely Korpos
Author
Gergely Korpos
Co-founder, CPO
Gergely's aim is to bring more clarity into personal investing. He has 10 years of experience in financial markets with GE Money, KPMG and MOL. He concluded thousands of trades as a commodity trader and financial portfolio manager

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