The foreign exchange (commonly known as forex or fx) markets are the most busy in the world because trillions of dollars in currency are moving around the globe all the time, five days a week. Brokers regularly allow traders to borrow significantly to fund their speculations, which may result in huge gains or huge losses very rapidly.

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You’ll need a broker who deals in currencies if you want to join in on the action, and many well-known brands in stock trading don’t provide this service. It is necessary to analyse a forex broker using criteria that are distinct from criteria used to evaluate a stock broker due to the differences in the markets.

A few prominent forex brokers, including ones that let you trade cryptocurrency, are listed below..

2021’s top forex trading platforms and firms include the following.

1. RoboForex
2. Ally Invest
3. IG
4. Robinhood

Best online forex brokers for September 2021: an overview

RoboForex

RoboForex, a brokerage firm, was established in 2009 and is based in London. It serves financial markets in 169 countries with its products and services. There are more than 3.5 million customers and partners that use RoboForex, one of the industry’s top software producers. Experts in the financial markets see RoboForex as a trustworthy business partner. In the past, the firm has been honored with several accolades of distinction.

Forex.com

While it also deals in metals and futures, Forex.com has a focus on currency trading and a slew of appealing features. Customers may choose between a variety of pricing structures, including spreads, commissions, or the broker’s STP Pro pricing, which uses prices sourced from worldwide banks and other sources with no additional markup.

There are also more than 80 currency pairings available for traders at Forex.com, and because of this, the broker claims to be America’s number one forex broker when it comes to customer assets kept with the broker.

Ally Invest

As a low-cost stock broker (with particularly attractive pricing on options transactions), Ally Invest is more known, but currency trading adds a lot of depth to its services. In addition to offering over 80 currency pairings and simple charting tools, Ally is an excellent alternative for traders who are just getting started.

Even if you don’t intend to trade, Ally lets you establish a $50,000 practise account to understand how currency trading works. Given the complexities of forex trading, that’s a fantastic starting point for newcomers to try their hand at it.

IG

IG is a highly specialist forex broker that accepts US investors. It’s a powerful broker, but it also has many helpful tools for new traders, such a demo account. Web, smartphone app, and access to MetaTrader4 and ProRealTime trading platforms are all available through the broker.

For the euro-dollar pair, IG enables spreads as low as 0.8 pips (a pip is one ten-thousandth of a point) and claims to have pricing that is up to 20% less expensive than the other two leading US brokers. In addition, the broker’s platforms all come equipped with a wide range of charting tools.

Robinhood

In the crypto arena, Robinhood brings its sleek and easy-to-use interface that it’s renowned for, but does not provide traditional currency trading. Customers may trade seven different kinds of cryptocurrencies here, including some of the most well-known ones including Bitcoin, Ethereum, Litecoin, and Dogecoin. Ten additional digital currencies will be available for comparison as well.

Robinhood’s crypto trading is free, just like its stock and options’ trading is.

What to look for when selecting a forex trading firm

Only a few of the well-known online stock brokers also provide FX trading services. Instead, the market is flooded with specialised specialty brokers that cater to currency traders with large volume who are searching for every advantage they can get.

Regardless of the type of forex broker you’re looking for, you should pay attention to the following features:

Foreign exchange brokers might charge their services in one of two ways: as a commission or as part of the buy-sell spread. Pips, or a ten-thousandth of a point, are commonly used to describe spreads.

Risk: How much risk are you willing to accept from the broker? A larger degree of leverage is often sought by traders to increase the magnitude of currency market movements. Depending on the currency’s availability, the price might be higher or lower.

Pairs of currencies: Only a few main currency pairings are traded, but how many smaller or exotic currency pairs does the broker offer? US dollars, Euros, Japanese yens, British pounds and Swiss francs are the most widely used currencies.

The broker’s spreads on transactions are how wide? The trade becomes less appealing as the gap widens. Because that’s how they get paid, brokers who charge a spread markup usually have larger spreads.

In certain cases, typical stock brokers such as TD Ameritrade or Robinhood will let you purchase cryptocurrencies, but the trading process differs from ordinary FX trading in the way it is explained above.

Traders from the United States may find it difficult to conduct business with top forex brokers situated in the United Kingdom because of their nationality. However, all of the aforementioned brokers are suitable for U.S. citizens.

How can I tell whether my forex broker is properly regulated?

To keep company standards high while also safeguarding consumers, there has to be regulation of forex brokers. Unregistered persons, items, or businesses are at the center of most frauds, according to the Commodity Futures Trading Commission (CFTC). So, if you’re trading forex, make sure you’re working with a licenced broker. You can tell if a broker is licenced by looking at their license.

The CFTC is in charge of registering and supervising foreign exchange brokers. Financial criteria for a broker, background checks for employees, and compliance with conduct and disclosure laws are all necessary.

The National Futures Association website (which is overseen by the CFTC) provides a search engine that you may use to see if a forex broker is properly registered. It is possible to look up a broker’s registration, disciplinary history, and financial data on the web. When dealing with an unregistered company, use caution.

How do trading desks and agency brokers differ?

It is necessary to have a broker while trading forex, however the broker may not always have your interests at heart. Both a dealing desk and an agency broker have their advantages and disadvantages when it comes to completing deals.

It is the responsibility of an agency broker to locate the greatest possible bargain pricing for their clients. Thus, the agency broker serves only as a go-between, holding no inventory of the goods being transferred and avoiding any potential conflict of interest between the agent and the customer. To use this service, clients pay the agent a fee, which can result in substantial savings for the customer. As a result, agents are often designated for customers with a high net worth who are moving large sums of money.

A dealing desk, on the other hand, both deals and owns securities. Because of this arrangement, the dealing desk may not always act in the client’s best interest.

This means that the dealing desk can serve as both a party to the transaction (the principal) and an agent for the buyer (the buyer’s agent).In its capacity as a principal, the dealing desk may accept a trade from a customer in which it has a financial stake. Thus, the dealing desk may benefit at the cost of its clients, maybe dumping inventory to the customer just before a market decline or purchase it just before a market increase.

Dealing desks act as agents for their clients, executing deals on their behalf and passing the trade price through to them.

Customers may never know the interests of the dealing desk on any given trade because of this arrangement, which is problematic if you’re the customer.