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Best Forex Brokers for Beginners

One thing we learned in 2020 is that our jobs are never secure and having multiple streams of income is better than having one. So with this mindset, many people decided to take their financial freedom into their own hands and started trading while locked down at home during the coronavirus pandemic.

While scrolling through social media apps, you’ll likely come across an advert encouraging you to open an account and start trading. Many of those adverts will be for foreign exchange (forex) trading.

Forex trading can be intimidating, and for many people, it’s hard to know where to start. So in this guide, we will help you navigate this field and tell you about the best forex brokers for beginners in 2021.

Our List of the Best Forex Brokers for Beginners

When determining the list of forex brokers for beginners, we examined the regulations, withdrawal and deposit fees, trade commissions, spreads, and minimum deposits of the brokers. Based on this, we came up with the following list.

1
Min. Deposit
$10
Exclusive promotion
Our score
10
Leverage
500:1
New accounts
Spreads
0.7
PIPs
Regulations
Forex Pairs
55+
No Fee
Start Trading
Pros:
0% Commission Account
Low Spreads
Eco-Account Option
Payment Methods
Bitcoin, Credit Card, Debit Card
Full regulations list:
Please ensure that you fully understand the risks involved, taking into account your investments objectives and level of experience, before trading, and if necessary seek independent advice.
2
Min. Deposit
$10
Exclusive promotion
Our score
9.3
Leverage
500:1
New accounts
Spreads
0.8
PIPs
Regulations
Forex Pairs
55+
No Fee
Start Trading
Pros:
55+ currency pairs available
Trade on a trusted platform
24/7 support via live chats, email or phone call
Payment Methods
Credit Card, Debit Card, Visa, Bitcoin
Full regulations list:
LonghornFX offers high-leverage trading on a wide variety of assets. Trading with leverage carries a degree of risk which may result in losing more than your investments. Clients should practise risk management to protect themselves from losing more than they can afford when trading with leverage.
3
Min. Deposit
$200
Exclusive promotion
Our score
8.7
Leverage
500:1
New accounts
Spreads
0.5
PIPs
Regulations
FSPR, FMA New Zealand
Forex Pairs
27+
No Fee
Start Trading
Pros:
BlackBull Markets’ unique feature lies in its stated goal of delivering an “institutional” trading experience to retail clients
No-Dealing Desk Broker (NDD), with Straight Through Processing (STP) all done on a true ECN
State of the art Equinix servers, based in New York (NY4), London (LD5) and Tokyo (TY3)
Payment Methods
Mastercard, Visa, Bank Transfer, Neteller, Skrill, UnionPay, FasaPay
Full regulations list:
FSPR, FMA New Zealand
4
Min. Deposit
$200
Exclusive promotion
Our score
8.5
Leverage
30:1
New accounts
Spreads
1
PIPs
Regulations
CySEC, FCA
Forex Pairs
No Fee
Start Trading
Pros:
Join the Social Trading revolution. Connect with other traders, discuss trading strategies, and use our patented CopyTrader
eToro is the world’s leading social trading platform, offering a wide array of tools to invest in the capital markets
Largest number of currency pairs to trade
Payment Methods
Wire Transfer, Bank Transfer
Full regulations list:
CySEC, FCA
Cryptoassets are highly volatile unregulated investment products. No EU investor protection. eToro USA LLC does not offer CFDs and makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared by our partner utilizing publicly available non-entity specific information about eToro. Your capital is at risk.
5
Min. Deposit
$10
Exclusive promotion
Our score
7.9
Leverage
500:1
New accounts
Spreads
0.7
PIPs
Regulations
Forex Pairs
55+
No Fee
Start Trading
Pros:
Can fund with BTC
64 global companies including Netflix and Amazon
Free deposits and withdrawals
Payment Methods
Credit Card, Debit Card, Bitcoin, Wire Transfer
Full regulations list:
EagleFX offers leveraged trading on a range of assets within its platform. CFD and Spot Forex trading do carry a degree of risk which may result in you losing more than your initial investment. Please ensure you fully understand the risks involved with leveraged trading and ensure this is not detrimental to your personal or institution's financial well being.

What Is a Forex Broker for Beginners?

A broker is a financial services company that provides a platform for buying and selling assets. A forex broker provides a platform for foreign exchange trading.

We have all been buyers and sellers in the forex market at some point. When we travel to a foreign country and convert our local dollars to the foreign country's currency, we buy foreign currency. The exchange we bought the currency from, be it a bank or at a counter in the airport, acted as a broker between us and the foreign exchange market.

An online forex broker lets you notionally buy foreign currency (or speculate on it) without taking possession of any physical currency at all.

How Does a Forex Broker for Beginners Work?

Forex brokers act as financial intermediaries between buyers and sellers. They allow you to buy one currency using another currency at the current “exchange rate”, and you do this because you believe that the currency you bought will outperform the currency you sold.

A forex broker lets you trade currency pairs such as the JPY/USD. In this pair, the base currency is JPY, and the quoted currency is USD. Here, you are notionally buying JPY with USD in the hope that you can subsequently sell at a profit if the Japanese yen becomes more valuable relative to the US dollar.

You should start by trading the popular currencies that tend to be more liquid (i.e., can be bought or sold more easily). These are usually the currencies of the world's largest economies, such as the US dollar (USD), British pound (GBP), or Japanese yen (JPY).

Key Features to Look For in a Forex Broker for Beginners

As a beginner forex trader, there are several features you should look for in a broker. Let’s look at some of them.

Regulators

The most important feature for any trader is knowing whether your broker is regulated, and the regulatory bodies governing your broker. Brokers that are not regulated may have hidden fees and may not have proper compliance rules, putting you as a trader at greater risk.

Education

It is crucial to choose a broker that provides trading videos and a simulator (demo) account for you to practice trading and to use their platform as a beginner. This allows you to develop a trading strategy that works for you without costing you any money.

Low Initial Deposit

Many beginners may not want to start with a large account. As such, it is essential to find a broker with a low initial deposit. Once you become more confident in your ability, you can fund your account with more cash.

Customer Support

Knowing that your broker is always there to answer any questions can be comforting to many beginner traders. Forex brokers should be available 24/5 to traders who may need help using their platform or clarifying trade disputes.

Pros & Cons of Using a Forex Broker for Beginners

Pros

Regulated brokers provide an additional layer of protection to the consumer
24/5 access to customer service if a trader if needs help
Brokers that offer fix spreads usually also guarantee executions at set limit price orders
Access to a large number of forex markets
Educational tools available to new traders

Cons

Some brokers may have wide spreads
Forex markets are always open during the week, unlike stock markets which generally operate from 9 am EST to 4 pm EST during the week.

How To Choose the Best Beginners Forex Broker for Me?

To find the best broker, you have to take the time to do your research.

A beginner's biggest mistake is choosing the wrong platform for their trading style, which can mean higher fees and lower profits. It can also mean having to deposit more money in your account than you might want to.

If you intend your trading style to be in and out of a trade within a few seconds to take advantage of bid and ask spreads — a strategy known as scalping — you need a broker with the fastest executions and lowest fees. However, if your objective is to buy the currency and use it to trade stocks or any other asset class in that currency — i.e. to actually use the currency rather than merely speculating on it — you would need a broker who trades other asset classes with fixed spreads.

How to Safely Use a Broker to Make Money Online Trading?

The ultimate consequence of not doing your research before trading is that you significantly increase the chances of losing your money. This is not what you want. The most critical feature of a forex trading platform for beginners is education. Take some time to learn about the platform and how to use the features correctly. Most brokers allow the use of a simulator (demo) account. Take the time to practice trading in this account so you can develop a trading style that best suits you. Learn to use tools like limit orders and stop orders to reduce the risks of trading.

Conclusion

With six trillion dollars in average daily trading volumes, the forex market is the largest financial market in the world. Participants range from retail investors to large multinational banks and even governments. Understandably, a beginner might find this practice intimidating. However, with good education and risk management tools like limit orders and stop orders, it does not have to be as risky an investment. Even beginners can go on to make millions by trading forex.

Frequently Asked Questions

  1. A currency pair is the value of one currency quoted in another currency. For example, EUR/USD means you are buying EUR with USD.

  2. To open a forex brokerage account, you will need to go to the broker's website, where they should have a link to open an account. Most brokers require you to provide proof of identification and verify your address before funding your account.

  3. The forex market is open 24 hours a day from Sunday evening until Friday night.

  4. Forex brokers let traders use leverage. This means that for every $1 you have to trade, your broker allows you to place a trade worth up to $200. Beware that it can magnify your losses as well as your gains.

  5. A pip is the smallest unit of change in the price of a currency pair.

  6. Spread is the difference between the bid (price when selling) and ask (price when buying) of a currency pair.