Best Forex Brokers for Beginners 2020

With new forex brokers coming online every day, choosing the best forex broker for you often requires a lot of research and patience. To save you time and help beginner traders we have identified some of the key things that every trader must evaluate when selecting a broker and we’ve compiled a list of the very best Forex brokers in the market.

The Bottom Line: The brokers below represent the best brokers for beginners.

Here’s a summary of the best brokers for beginners.

• XTB
• Naga
• eToro
• Alpari
• Plus500
• Forex Brokers for Beginners
• How to choose a forex broker? (As a beginner trader)

Note: Not all Forex brokers accept US clients. For your convenience we specified those that accept US Forex traders as clients.

XTB

XTB is an award-winning CFD platform that supports Forex, indices, commodities, stock CFDs, ETF CFDs, and cryptocurrencies. For Forex, XTB supports 48 currency pairs with low-cost spreads. Customers of XTB can choose between trading on the xStation 5 or MT4 platforms. For leverage accounts, this brokerage offers leverage of up to 200:1.

Stock and ETF CFDs all attract a fixed commission of 0.08% per lot across the two types of accounts.

XTB was founded in 2002 with headquarters in Warsaw. It is regulated in markets across Europe by the IFSC, FCA, KNF, and CySec. XTB has a free demo account and a Trading Academy set of courses for beginner and intermediate traders.

Naga

The broker offers more than 500+ tradable asset classes covering Forex, Stocks, Indices, Commodities and Cryptocurrencies. In fact, the broker has its own cryptocurrency called NagaCoin which was the world’s 18th largest token sale in 2017. Clients can not only trade the asset classes listed above but can also access social trading tools, trade on real cryptocurrencies, have their own crypto wallet on NAGAX and access a NAGA MasterCard.

Naga Markets offers their own proprietary browser-based trading platform powered by TradingView, which features an AI trading assistant called CYBO, as well as themed asset management groups through NAGA Portfolios. The broker also offers a wide range of trading webinars and tutorials on how to use their platform.

eToro

eToro is another awesome platform for beginners. A standout feature here is the ability to view and copy other trader’s strategies. Dropping into a new platform for the first time can be intimidating. Etoro takes away some of that fear factor by showing you what other traders are doing that works.

The platform is intuitive and the site offers some useful education and news resources for new traders as well. But if you are truly a “noob” in foreign exchange, looking at real examples in a live setting can teach you what’s going on much faster than piecing it together on your own.

Alpari

Alpari is great for beginners thanks to its support of both popular MetaTrader versions (MT4 and MT5) and a solid forex education section with detailed foreign exchange courses. This makes it easy for you to get up and running quickly without major gaps in your forex knowledge. Like other top platforms for beginners, it also offers a free demo account.

This broker also allows you to trade with a live account using very small transactions. A nano account on MT4 lets you trade with eurocents and US dollar cents. This reduces your risk by 100x compared to trading full Euros and Dollars.

Plus500

Plus500 offers one of the easiest trading platforms to navigate, which makes it an excellent starting place for brand new forex traders. The site claims 304,000+ active customers, so they know more than a bit about how to bring a new trader up to speed when getting started in the forex marketplace.

Many traders prefer using a PC due to its support of the widest range of trading systems, but Plus500 is web-first, which means you can use it on any type of computer or mobile device. It offers native iPhone, Android, and Windows Phone apps as well, which makes it easy to manage your account on the go. You don’t want to miss a minute when you are a new trader with open positions!

Forex Brokers for Beginners

A forex beginner can make costly mistakes without fully understanding why. To protect yourself, it is best to start with a demo account, research and refine your strategy, and do a lot of testing before funding your account with real money. To avoid losses, consider starting with one of these best brokers for beginners.

Remember, your forex broker wants to help you succeed so you will come back and trade again and again. Many brokers, however, find clients losing more than they make. Many brokers, particularly those regulated in the United Kingdom, share what percent of traders earn a profit on their platforms. Look out for that statistic as you start with any new broker and trading plan.

How to choose a forex broker? (As a beginner trader)

The forex market is the world’s largest market with a daily turnover that easily exceeds $4 trillion. However even though it is the largest market in the world, there is no central exchange for it. Consequently, forex traders have to rely on the services of a forex broker to help them execute a trade.  That is why it is so important to choose the best trading partner for you. So what do you need to consider when choosing a broker?

Regulatory Oversight

Before all else, the first thing every beginner trader must check when looking for a trusted and reliable broker is to see if the broker is regulated. As the forex market is an unregulated market, having a forex broker that is regulated ensures the broker will operate with transparency and fairness. It is important to note that regulatory oversight for a forex broker is only applicable for the jurisdiction that the broker is based in. For example in the U.S, a forex broker is required to be a member of the National Futures Association (NFA) and be registered with the  US Commodity Futures Trading Commission (CFTC). For forex brokers that are based in the UK, they are required to be registered with the Financial Conduct Authority (FCA). These regulatory agencies main functions are to protect the interest of investors as well to develop the rules that dictate how forex brokers should conduct their operations.

Most important of all, regulatory agencies constantly monitor the conduct of the brokers under their jurisdictions to prevent any kind of abusive practices, fraud and manipulation on the part of the brokers. By doing so, these regulatory agencies help to promote competition and instill trust in the forex market. So before you decided to open a trading account with a forex broker, ensure that it is regulated by one of the regulatory agencies listed below:

• Australia: Australian Securities and Investment Commission (ASIC)
• Canada: Autorité des Marchés Financiers (AMF)
• Cyprus: Cyprus Securities and Exchange Commission (CySEC)
• France: Autorité des Marchés Financiers (AMF)
• Germany: Bundesanstalt für Finanzdienstleistungsaufsicht (BaFIN)
• Switzerland: Swiss Federal Banking Commission (SFBC)
• United Kingdom: Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA)
• United States: National Futures Association (NFA) and Commodity Futures Trading Commission (CFTC)

Finally many regulators offer an investor compensation scheme which protects the investors deposits up to a certain level should the broker become insolvent and become overly exposed to the markets.

The Forex Platform / Software

The next thing that you have to evaluate in a beginners forex broker is their trading platform or software. The trading platform is the trader’s gateway to the forex market hence you have to ensure the trading platform is reliable and easy to use. It must also have a wide range of trading tools which you can use to help in the analysis of the market. Most useful tools for beginners are clear charts, a streaming news source and even an economic calendar, giving upcoming economic events. In addition, you must also ensure that trade entries and exits can be done effortlessly. This means that the interface of the trading platform must be well designed with all the functionalities clearly labeled and strategically placed.

A trading platform with a poorly designed user interface can actually impede trading which can lead to costly mistakes. For example instead of closing a position, a poorly designed trading platform can cause you to add to a position. Or it can cause you to go long on a position when you really intended to go short. At the end of the day, all these mistakes will just cause you more frustration and drain you emotionally. Make sure that the broker offers you a reliable trading platform such as the MetaTrader 4 platform or the Sirix WebTrader. As a beginner trader is also important to know that brokers usually offer mobile versions of their platforms. This is great when you are on the go, as you never need to lose trading opportunities. 

Commissions & Spreads

All forex brokers make their money through the commissions or the spreads which they charge their clients. For commission based trades, the commission is usually a fixed amount per lot traded or a percentage of the total volume traded. For spread based trades, the forex broker generally markup a few pips in the difference between the Bid and Ask price. It should be noted that the spread can be fixed or floating.

• For example for fixed spreads, a broker may specify that the spread for the EUR/USD currency pair is 2 pips.
• With floating spreads, the spread that is payable depends on the market volatility.

Take note that the wider the spread, the more difficult it is for you to make a profit. Nevertheless, frequently traded currency pairs such as the EUR/USD or USD/JPY often have very tight spread as compared to less frequently traded currency pairs.

Account Types

All leading forex brokers offer their clients a selection of trading accounts for their clients to choose from. These accounts are typically differentiated by the benefits which they offer the account holder but they vary between the different brokers. For example, a micro or mini account which allows a trader to trade in an amount that is less than a standard lot usually comes with a low minimum deposit requirement. These trading accounts are designed for beginner traders and have higher leverage. But they also often come with higher spreads. Sometimes, the broker might limit the number of currency pairs which a trader can trade with a micro or mini account.

Trading accounts can also vary according to the type of spreads which a trader has to pay. Some trading accounts have fixed spreads whereas others have variable spreads. Or they can be commission based trading accounts as well. Usually the trading accounts that are geared for experienced traders are ECN type accounts which allow the account to access the raw spreads provided by the liquidity providers.

Deposits and Withdrawals

Another factor which you must take into account when evaluating the different types of trading accounts is the deposit and withdrawal methods supported by the broker. Every forex broker in the industry has their own policies on how they handle deposits and withdrawals. Some brokers may require their clients to fund their trading accounts by direct bank deposit whereas others may be more flexible and support a variety of payment methods. Regardless of the payment methods that are supported, always choose a broker which can provide you with a convenient and cheap payment method.

Customer Service

The forex industry a 24 hours market where trading activities never ceases. Because of this, it is possible for a forex trader to trade the market continuously. This means you can encounter a problem which requires the assistance of the customer support team at any time. Hence, it is essential that the support services are available on a 24 hours basis throughout the entire trading week as there is nothing more frustrating than not being able to get assistance when you need it most.

Check the methods which are available to contact the support team with eg. live chat, localized phone numbers, email.  In addition, review the response time of the customer support representative. Another often overlooked factor when reviewing a broker’s customer support service is whether the broker has provided you with a localized or toll free telephone support number. The reason is fairly obvious as the telephone charges that you rake up when calling the support lines can easily build up to a substantial amount.

Our 10 Tips for the Beginner Trader

Below we have compiled a definitive list of the absolute best brokers for beginner Forex traders. We have considered all of the below points.

1. To verify a broker’s regulated status, we check the website of the regulatory agency that issued the authorization for the broker to operate in a particular jurisdiction.
2. Sometimes, a forex broker can be regulated in several jurisdictions. The more jurisdictions the broker is regulated in, the most committed the broker is towards earning the trust of potential clients.
3. On trading platforms, the more choices of trading platforms that are provided by the broker, the better it is for you as a trader. If you are the type of trader that is constantly on the move and doesn’t like being desk bound, consider a broker that is able to support mobile trading as well.
4. To evaluate how the trading platform is able to perform, always try out the demo account provided by the broker. This will help give you an idea of the performance of the trading platform.
5. Some brokers offer a demo account that works only for a limited period whereas some brokers offer an unlimited demo account. Of course an unlimited demo account is better since you will still be able to use the demo account to back test your trading strategies.
6. For trading costs, we check to see if the broker offers a rebate on the commissions that you pay. Some brokers as a way of rewarding their clients’ loyalty offer rebates on the commission paid by their clients. In other words, the more the trader trades, the more he will get back in terms of rebates.
7. On the issue of withdrawals, we check to see if the broker has any restrictions or specific requirements. Some brokers require a minimum amount to be withdrawn before the withdrawal request is processed. In addition, some brokers may also charge their clients a fee on each withdrawal made.
8. On customer support, we check to see if the support services can also be accessed through social media or through internet telephony. The more methods which the broker can support, the better it is for you as a client.
9. We check the quality of their training academy. This is important for beginner traders as you want to learn as much as you can before you take the plunge risking your money in the forex market.
10. Some brokers in their bid to differentiate their services from other brokers also offer value added services such as free market signals. These free signals can prove useful to you as a trading aid as well as an educational aid.

Conclusion

Finding the perfect broker is not always easy, especially when you are a beginner trader and don’t really know what to look for. In order to help you out we have  collated a list of the best Forex brokers for beginners, we hope it’s useful!

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