Best Forex Brokers For Hedging 2019

FX Empire Editorial Board
Last Update:
At FX Empire, we stick to strict standards of a review process. Learn about our review process. FX Empire may receive compensation. Here’s how we make money.

The following article presents an informative overview of hedging in the forex markets. Here, you will learn exactly what hedging is, and how is it used in the trading of forex.

We outline the various hedging strategies and inform you on whether hedging is aloud by all brokers. Discover what this important insurance methodology called hedging has to offer forex traders.

The brokers below represent the best Forex Brokers for Hedging.

Scroll for more details
BrokerRatingOfficial SiteRegulationsMin DepositMax LeverageTrading PlatformsFoundation YearPublicly TradedTrading Desk TypeCurrenciesCommoditiesIndicesStocksCryptoCommission on tradesFixed spreadsoffers promotionsOfficial Site
Visit Broker>

Your capital is at risk

CFTC, DFSA, FSA, IIROC, MAS, NFA

$1

1:50

MT4, Oanda fxTrade

2001

Market Maker, No dealing desk

Visit Broker>

Your capital is at risk

Tickmill
Visit Broker>

Your capital is at risk.

BaFin, CySEC, FCA, FSA

$100

1:500

MT4

2014

No dealing desk

Visit Broker>

Your capital is at risk.

Vantage FX
Visit Broker>

Your capital is at risk

ASIC, CIMA

$200

1:500

MT4, MT5, myFXbook, Zulutrade

2009

ECN, STP

Visit Broker>

Your capital is at risk

EightCap
Visit Broker>

Your Capital is at Risk

ASIC

$100

1:500

MT4, MT5

2009

No dealing desk

Visit Broker>

Your Capital is at Risk

JustForex
Visit Broker>

Your capital is at risk

Not a regulated broker

$0

1:3000

MT4

2012

ECN, No dealing desk, STP

Visit Broker>

Your capital is at risk

Markets.com
Visit Broker>

CFDs carry risk. 73% of traders lose

ASIC, CySEC, FCA, FSCA

$100

1:300

MT4, MT5, Proprietary

2008

Dealing Desk

Visit Broker>

CFDs carry risk. 73% of traders lose

Pro Tip: Most of these brokers offer free demo accounts so you can test the brokers and their platforms with virtual money. Give it a try with some play money before using your own cash.

Here’s a list of Best CFD Trading Brokers 

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

Oanda

Regulated By:CFTC, DFSA, FSA, IIROC, MAS, NFA

Foundation Year:2001

Headquarters:795 Folsom St Floor 1, Suite 1038 San Francisco, CA 94107

Min Deposit:$1

Visit Broker

Your capital is at risk

Your capital is at risk

OANDA is one of the early pioneers of online forex brokers, established in the mid-1990s. The company is said to be founded by Dr. Michael Stumm and Dr. Richard Olsen. When the online trading platform FXTrade was launched in 2001, it was the first fully automated forex trading platform.

Since then, OANDA has grown by leaps and bounds to handle more than a million queries a day. It is estimated that about 20% of the global spot forex trades go through OANDA’s servers.

Pros: Cons:
  • Innovative Trading Practices
  • Open And Transparent Pricing
  • Powerful And Simple To Use Forex Trading Platforms
  • Tight Spreads
  • EAs Are Not Supported On Their MT4 Platform
  • Spreads Tend To Widen During The Releases Of News
  • The Charting Package Supplied Can Be Improved

Tickmill

Regulated By:BaFin, CySEC, FCA, FSA

Foundation Year:2014

Headquarters:1 Fore Street, EC2Y 9DT, London, United Kingdom

Min Deposit:$100

Visit Broker

Your capital is at risk.

Your capital is at risk.

Tickmill is a brokerage business that was established in 2014, to offer traders the opportunity to trade FX and Contracts-for-Difference assets on an online platform. The Tickmill brand is owned and operated by three subsidiary companies known as Tickmill Ltd (Seychelles), Tickmill Europe Ltd (EU) and Tickmill UK Ltd (United Kingdom).

Tickmill offers various deposit options, all of which are based on fiat currency. Cryptocurrency-based deposits are not supported.

Vantage FX

Regulated By:ASIC, CIMA

Foundation Year:2009

Headquarters:29/31 Market St, Sydney

Min Deposit:$200

Visit Broker

Your capital is at risk

Your capital is at risk

Vantage FX was founded in 2009 in Australia and is the brand name of the Vantage International Group which is regulated by the Cayman Islands Monetary Authority (CIMA) and advertises the segregation of client funds which are held with Australia’s AA rated National Australia Bank (NAB).

The broker offers services that are designed for both beginner and professional traders with access to Forex ECN trading, as well as CFD trading on Indices, Commodities and U.S and Hong Kong Shares on the MetaTrader 4 and MetaTrader 5 trading platforms for Mac, PC, iOS and Android as well as social trading platforms such as MyFXbook and Zulutrade.

Clients of Vantage FX have access to an impressive range of educational materials and research tools including MT4 SmartTrader Tools, a wide variety of promotional trading offers and rebate programs, as well as access to accounts with 500:1 leverage.

Pros: Cons:
  • Forex ECN Trading.
  • U.S and Hong Kong Share CFDs.
  • Segregated client funds with the National Australia Bank (NAB).
  • Unique bonus and promotional trading offers.
  • No regulation from Europe or UK regulators.
  • Limited Share CFDs on offer.

EightCap

Regulated By:ASIC

Foundation Year:2009

Headquarters:360 Collins Street Level 6, Melbourne, Australia

Min Deposit:$100

Visit Broker

Your Capital is at Risk

Your Capital is at Risk

Founded in 2009, EightCap is a brokerage firm with a mission to provide exceptional financial services to its clients. This FX and CFD broker offers fast execution on more than 200 trading instruments, using their Equinix-connected trade servers.

Clients are provided access to trade currencies, indices, commodities and crypto assets using cutting edge technology. EightCap states clearly that it is a completely transparent broker that gives its clients access to pricing from top-tier liquidity providers. As a result, spreads are low and trades are executed speedily. There is no dealing desk.

 

Pros Cons
  • Regulated by the ASIC
  • Broker has taken an insurance policy to further protect clients and its operations
  • Very fast trade executions with larger leverage of 1:500
  • Segregation of traders’ funds
  • Demo account is only for 30 days
  • No services to clients from USA and over 35 other countries
  • No social trading

JustForex

Regulated By:Not a regulated broker

Foundation Year:2012

Headquarters:No. 1 Orchid Garden street, P.O. Box 445, Belmopan, Belize

Min Deposit:$0

Visit Broker

Your capital is at risk

Your capital is at risk

The JustForex brand operates from Belize and the islands of St. Vincent and Grenadines. Following its launch in 2012, JustForex continues to target traders globally. With offshore locations outside Europe, JustForex brings high-leverage, low spread FX brokerage services.

The brand claims to offer market-making and ECN-style brokerage services depending on which account type you take eg. the ECN account or the Standard account respectively. The JustForex team offers low margin, high-leverage FX and CFD trading with Investor protection and the MT4 available in 12 languages for desktop, web and mobile trading. They offer leverage up to 1:3000 and spreads starting at just 0.0 pips and commissions free deposits.

Markets.com

Regulated By:ASIC, CySEC, FCA, FSCA

Foundation Year:2008

Headquarters:Safecap is located at 148 Strovolos Avenue, 2048, Strovolos, P.O.Box 28132, Nicosia, Cyprus.

Min Deposit:$100

Visit Broker

CFDs carry risk. 73% of traders lose

CFDs carry risk. 73% of traders lose

Markets.com was founded in 2008 and is regulated by four major global financial regulators (CySEC, FSCA, ASIC and the FCA) under several different operating names relating to the TradeTech Group which are all constituents of Playtech PLC – a company that is traded on the London Stock Exchange Main Market and which is a constituent of the FTSE 250 Index.

The broker offers users the ability to trade commission-free, with costs just related to spreads and swaps, on more than 2,200 CFD instruments covering Stocks, Indices, Currencies, Commodities, Cryptocurrencies, Bonds, ETFs and even IPOs with 24/5 customer support and assistance. Users can also access the Markets.com in-house developed, cutting-edge mobile trading app and web trader platform which offers advanced research and trading tools.

Pros: Cons:
  • Wide range of assets available to trade.
  • Flexibility of global offices to access options such as higher leverage and/or bonus promotions.
  • Impressive Markets X Web Trader platform, simple to use and feature-rich.
  • Wide range of trading tools and customer support options.
  • Educational resources on using their trading platforms are limited.
  • Higher than average swap rates.

What is Hedging?

Hedging is a somewhat advanced type of investment strategy. The sole strategy or purpose of hedging is to protect the investor by mitigating possible losses. Hedging acts as a sort of insurance for the investor in the event of a negative outcome. The strategy reduces exposure to various risks by using instruments in the market to counterpoise risk from negative price movements. So, in investment terms; investors “hedge” one investment by making another. However, hedging is not the holy grail of investment insurance, it comes at a cost. Insurance is not free and this is true with hedging as well, while using a hedging strategy your potential profits are reduced, as well as your potential losses.

What is Hedging in Forex?

Hedging in forex protects investors from the volatility and uncertainty of financial markets. With forex hedging, the strategies refer to the act of an additional buy/trade of currency to offset the risk involved in the initial buy/trade. It is a method of insurance for forex traders, but should only be used by experienced traders who understand the ups and downs along with timing in the market. Adopting a hedging strategy without sufficient trading experience can make for disastrous impact on your account.

Forex Hedging Strategies

There are numerous hedging strategies forex traders can use. Some are quite simple, while some are more complex. The type of hedging strategy implemented depends on the experience level and preference of an investor, as well as whether it’s allowed by the brokerage. The hedging strategies are overviewed below:

  • Simple Forex Hedging- Some brokers allow you to place a trade to buy a currency pair, while at the same time placing a trade to sell the same currency pair. The net profit is zero while open, but if you time the trades just right you can come out with a profit while mitigating the risk.
  • Complex Hedging- For brokers who do not allow hedging, there are ways to get around their rules through complex hedging. There are numerous methods for this strategy.
  • Multiple Currency Pairs- This strategy differs from simple forex hedging because of the trading of 2 different currency pairs. This method of hedging is more complex and often requires many different currency pairs to be traded.
  • Forex Options- This method is different from all other hedging methods since there is a predetermined price and time frame to commence the trade. For instance, you conduct a trade at a specific price, as well as a strike option lower than the current price. If your exchange reaches the price point you specified in the future within the specified time frame you reap the profits. Or, if the price hits the strike option you lose, trading at the lower price. If it neither reaches the determined price in the future or hits the strike option, you lose on the purchase price of the option.

Do Forex Brokers Allow Hedging?

Hedging may be a popular method among forex investors, but not all forex brokers allow hedging. Many experts are totally against the practice of hedging; therefore, it is not welcomed on all platforms and brokerages. US based brokers strictly prohibit hedging because of US law instating a Fist In First Out policy (FIFO).

Read More:

IMPORTANT DISCLAIMERS
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
RISK DISCLAIMER
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.
FOLLOW US