Forex brokers for traders in the United States
With millions of dollars in circulation every day, Forex is the largest financial market in the world with a large number of investors and brokers. Generally speaking, the sheer size of the foreign exchange market means that there will be no shortage of Forex brokers. However, if you were based in the US, you would realize that there are fewer forex companies in the USA compared to those in neighboring countries like Canada.
US Forex brokers are subject to strict laws and regulations aimed at protecting US investors. However, there are a handful of US regulated brokers that offer reliable services, excellent customer care services, and easy-to-use trading platforms. Are you looking for a USA based Forex Broker? You can easily get a review of the top brokers in the table below, as we have compiled a list of the best forex brokers for US traders:
Forex.com
Interactive Brokers
OANDA
Saxo Bank
eToro
IG
TD Ameritrade
Reviews of the Best Forex Brokers in the USA:
Here is a list of the best US based brokers that will enable you to decide which brokerage firm to trade with in foreign currencies. The list has been developed after keeping in mind key factors such as technology, safety, trading conditions and support.
Forex.com:
Forex.com is currently one of the largest Forex brokers in the USA. It is owned and operated by GAIN Capital. Traders who participate in Forex.com get benefits like expert advisor hosting, free education, narrow spreads, 24/7 customer care service, and market research.
North America Derivatives Exchange (NADEX):
NADEX is well-known for its CFTC-regulated binary options exchange. It is the first exchange in the world to be regulated via the Internet for the futures markets. Nadex has two trading platforms. The Nadex trading platform is a web-based platform that can be accessed through any browser while the mobile trader has direct access to the market.
OANDA:
Founded by Dr. Richard Olsen and Dr. Michael Stom, OANDA is one of the first online forex brokers. It is also estimated that it handles about 20% of forex trades in the world. It is also a well-established subsidiary of NFA.
Some of the benefits for those who use them include innovative trading practices, transparent pricing, tight spreads, easy-to-use trading platforms and quality support.
Choosing the best Forex brokers in the USA can be frustrating and overwhelming, as there are so many factors to consider. With all the options that traders have, it is likely that they will find unscrupulous forex brokers who may intentionally trick you out of your money to get more profits. Having a trusted forum like topbrokers.com can help you find the perfect USA Forex Broker.
Restrictions and comparison to other countries / scams:
The foreign exchange trading regulations in the USA are not the same as in many parts of the world. These laws are very strict which explains why the United States has few brokers licensed by NFA.
Some of the US Forex regulations that differ from those in other countries include:
Positive effect
Hedge
The ability to authenticate the broker
Positive effect :
Forex is what it is today due to the leverage. It allows traders of small amounts of capital to trade with more funds thus amplifying the profit or even the loss. However, regulatory agencies can direct the appropriate amount of leverage. The Dodd-Frank Act of 2010 limits leverage of 50: 1 on major currencies and 20: 1 on minors. This is done to reduce the amount of risk for traders who do not understand the disadvantages of leverage.
Hedge:
The trader has three options when running a losing trade and one of them is hedging which places the order in the opposite direction. It is a very effective strategy that reduces losses. However, USA regulations do not allow hedging. Instead, your previous order will be closed regardless of your profit or loss, if you place a new order on the identical currency pair.
The ability to authenticate the broker:
Since most of the brokers operate online platforms, they can claim to be subject to a certain regulatory authority even when they are not. All NFA members have a token authorization that investors can use to verify the agency's database. All US-based brokers are also CFTC members. In the absence of the middleman in any of the databases, the company is not permitted to do business with US retailers.
NFA also offers a premium online resource with in-depth information on brokerage scams, banned companies, penalties, and not forgetting key information about the financial markets in the United States.
Other regulations revolve around the security of deposits and the storage of clients' funds.
Ensure your broker has a professional certification :
To become a US Forex broker, you must pass the Series 3 license (also referred to as the National Commodity Futures Exam). Forex is one of the most ambiguous categories of investments. As a result, a separate exam is set to test the eligibility of those selling it.
The Series 3 exam is 150 minutes long and consists of two parts. Part 1 contains 85 questions and a market knowledge test. It also tests price limits, orders, underlying accounts, accounts, margin requirements, and underlying hedging. The second part, on the other hand, has 35 questions as it tests the regulations. Some of the topics covered include the CPO (Commodity Group Operator) or CTA (Commodity Trading Advisor) regulations, various arbitration techniques, and the Commodity Exchange Act.
You must be familiar with and familiar with the different regulations to pass. There are many detailed preparation materials for this test online. To take the real test, one has to pay $ 115 and sponsor a licensed forex broker. A multiple-choice exam is administered by the Financial Industry Regulatory Authority (FINRA) and can be taken any day at websites across the United States and internationally. The pass mark is 70% on both sides of the test.
In some cases, some people may not be allowed to sit the Series 3 exam but may be allowed to take other exams. Therefore, it is important to check the competency requirements at the NFA official website. Also, some exceptions may be allowed for some brokers depending on the business of the company.
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