Best Forex Brokers For Scalping and Advanced trader 2020
This article outlines the world of scalping in the forex market. We have created a list of the ultimate forex brokers that allow scalping through our objective user reviews and expert research. Looking for a broker that allows scalping? Look no further.
|Broker||Rating||Official Site||Regulations||Min Deposit||Max Leverage||Trading Platforms||Foundation Year||Publicly Traded||Trading Desk Type||Currencies||Commodities||Indices||Stocks||Crypto||Commission on trades||Fixed spreads||offers promotions||Official Site|
IRESS, MT4, MT5
DFSA, FINMA, SFC
Advanced Trader, MT4, MT5
Bank, Dealing Desk, Market Maker, No dealing desk, STP
90% of retail CFD accounts lose money
CySEC, FCA, FSC
90% of retail CFD accounts lose money
70.24% of retail investor accounts lose money
AMF, ASIC, BaFin, CONSOB, FCA, FSB
No dealing desk
70.24% of retail investor accounts lose money
CySEC, DFSA, FCA, FSCA, SCB
cTrader, MT4, MT5, Proprietary
No dealing desk
FP Markets is the brokerage arm of First Prudential Markets Pty Ltd, an Australian firm that was established in 2005. In over 14 years of brokerage operations, FP Markets has grown to become a foremost online forex and CFD broker.
The Head Office is located in Sydney, Australia. The brand has won multiple industry awards in areas like; customer service, trader education and trade execution.
Swissquote Bank Ltd. is an online forex, CFD and derivatives trading broker that offers what may be called a total trading package that goes beyond forex or CFDs. Swissquote Bank is part of the Swissquote Group Holdings Ltd, and represents the Swiss-based trading division of the company. Swissquote Bank operates from Gland, Switzerland and commenced operations in 1996.
The Swissquote website is a multi-lingual portal which offers 10 languages, giving it a wide linguistic spread that can accommodate traders from various countries. Swissquote is a sponsoring partner of Manchester United Football Club, the most successful domestic club in the UK.
This broker offers a dedicated foreign exchange trading platform that gives experts everything they need. With FXTM Invest, you can tap into a proprietary copy trading program. Beginners enjoy being able to copy expert traders. But experts like you can profit by sharing your strategy with others.
Strategy Managers with high rates of return attract green traders looking to follow along with your winning strategy. As a strategy manager, you can charge a fee to those who copy you and profit. You’ll probably want to start with a lower fee, around 10%, to build a fan base while new on the platform. The top three performers charge 30% to 50%.
Founded in 1999, FXCM Group is an international online forex and CFD brokerage brand. In the UK, the FXCM brand is managed by FXCM Ltd. The company is based in the UK and its head office is located at 20 Gresham Street, 4th Floor, London EC2V 7JE, United Kingdom.
The brokerage firm also maintains offices in several jurisdictions such as Australia and South Africa. The broker is well known in the online trading community for suffering massive losses when the Swiss franc was unpegged from the US dollar in 2015. Having recovered from the crisis, FXCM today is focused on catering to the trading needs of both beginner traders and experienced traders.
FxPro is a forex and CFDs broker that was established in 2006. To better serve its international clientele base, FxPro has established offices in major cities around the world. With its quality 24/5 customer support service, traders at FxPro can be assured that all their trading needs will be catered to by this broker. The broker offers both true ECN (non dealing desk) and dealing desk access a the trader prefers.
Introduction to Scalping
In this article we delve into what scalping is at its core. Learn about the regulations and firms who allow scalping. Discover the technology and methods involved, and we’ll look at what it takes to be a competent firm allowing the investment practice of scalping.
What is scalping?
When it comes to trading, scalping is the quickest investment practice regarding opening and settling positions. It’s considered to be a trading strategy unlike any other. For instance, typical traders will follow trends in the market, hold stocks for days, weeks, even months at a time. Even day traders will trade far less, focusing on the latest stock market news, events affecting markets, economic outlook, etc.
Scalpers on the other hand use a strategy based on technical analysis and short-term price fluctuations. A typical scalper will trade anywhere from 10 to a couple hundred trades in a single day. It truly is the shortest form of short-term trading. It’s a popular method among traders with the potential of making many small profits leading to large gains. However, scalping is considered a high-risk style of trading due to the frequent use and large amount of leverage.
What are the Regulations Concerning Scalping?
Scalping, like other forms of trading has its own set of rules and regulations that firms put in place to protect themselves and the clients trading needs. However, scalpers do have a lot of freedom and control over their strategies. They get to choose their stop loss or take profit orders, as well as their time frame for trading. What a scalper does not have any say over is; the server stability, spreads, and the brokers attitude toward the investment practice of scalping.
Some firms don’t even allow scalping techniques to be used by their clients- we’ll get to that in the next section. For the firms who do allow scalping, they are generally using ECN platforms due to their high speeds in terms of performance and the ability to create a no slippage atmosphere (the expected price of a trade will be the same as when the trade is executed). This also benefits ECN brokers by leading to more trade commissions. In other words, as a rule of thumb its important for investors interested in scalping to trade within firms that have proper regulations in place for scalping to be executed smoothly.
5 Important Aspects of Brokers to Consider for Scalping
What is the broker’s policy towards scalping?
Most well-established brokers have an official policy allowing scalping techniques to be practiced. Others make scalping very difficult or unprofitable for traders. Some out right refuse scalping techniques within their firm. That being said, it is very important to understand your brokers policies before taking part in this potentially lucrative endeavour.
For instance, a broker allowing scalpers to trade have a system set in place to protect themselves from becoming bankrupt in the event of large profits or losses of their clients. (Forex brokers are liable to liquidity provider banks for the profits or losses of their clients). Brokers trade against the clients, which sets the total market exposure to zero. This allows the firm to be unimpacted by losses or profits by the clients. If a firm is incompetent with scalping practices and how to handle them, the trader can run into many problems such as slow servers, or accounts being deactivated. That being said, it’s best to understand your firms’ policy so you know they can handle the large amount of trades and leverage involved in scalping.
What jurisdiction is your broker in?
You may not think it matters where your broker is located, but this couldn’t be farther from the truth. The forex exchange market has jurisdictions that strictly prohibit scalping. It is important to know what jurisdiction your forex broker is in. For instance, many offshore brokers prohibit scalping. These same brokers are often unregulated and considered unsafe. Regulations regarding money, compensation schemes, and scalping are set in the US, Japan, Australia, UK, Cyprus, and among others.
Is your Broker using an ECN platform?
Brokers who allow scalping are generally using ECN platforms for their traders (Electronic Communication Network). These brokerages are among the fastest in the Forex world, and they provide a marketplace where market makers can place competing bids against the trader and vice versa. This makes it possible for brokerages to allow scalping and offer lower spreads. ECN brokers offer many other benefits too. Trading with brokers using ECN often offers lower fees and extra trading time, which is great for traders who prefer the flexibility over normal market times. Also, a great deal of privacy is available for those who want it. Another strong point for ECN brokers is the level of transparency. All the ECN brokers have access to the price information and history, allowing for easier analyzation of the marketplace and helping to prevent price manipulation.
Some additional things to consider about ECN brokers are:
- Account Size- Higher deposits are usually required.
- Execution- The high speeds of this platform is unparalleled compared to other systems. Sometimes spreads are non-existent and can even be inverted by a second or two.
- Spreads- Are much lower than those used by regular brokers, because of this ECN brokers charge their clients a fixed commission per trade. However, spreads will vary a lot as they are based more precisely upon market supply and demand.
Does the broker have fast speeds in terms of execution?
We’ve talked about how important it is to have a reputable broker with a regulated policy allowing scalping within the marketplace. But what’s equally important, is how fast the price feeds are. Since a scalper is trading many times in a short time frame, it is important to receive the latest quotes in a timely manner, and at the same time execute decisions without delay. Slippage is not an option for scalpers. They need to be able to trade constantly without delay, or trading this way would be impractical. I conclusion, scalping really is a high intensity trading method and requires state of the art tools, and a highly efficient brokerage firm.
What does your broker specifically say about scalping?
If your broker is a highly reputable and competent broker, they should have no problem providing you with an absolute statement on weather or not scalping is permitted in the marketplace. Their statement should be concise and understandable, not with any grey areas or uncertainty. If a broker is hesitant about scalping, they are not the ones to use. Brokers who allow scalping and provide an excellent atmosphere and platform to do so will welcome scalpers with open arms.
Terms & Conditions: What to Look Out For?
The terms and conditions are very important to a scalper. By trading in an unconventional way there are certain terms and conditions that affect and apply specifically to scalpers. Some of these terms and conditions are as follows:
- Make sure to check the amount of time you have to close your trades. Many well established and reputable brokers offer scalpers additional trading time outside of normal market hours. This can be important to a scalper who enjoys more flexibility.
- Be sure that the broker definitively states that scalping is a viable trading method on the platform. You don’t want to be confused after reading whether its allowed or not. It should be concisely written in plain language.
- If it says some where in the terms and conditions that price arbitrage is not aloud, then it might as well say scalping isn’t aloud either.
Reasons for choosing a broker that allows scalping
Brokers who allow scalping is not a bad thing, in fact it’s a very good thing. Brokers who allow scalping are more often than not, very established and reputable brokers. They are required to be competent and efficient which allows them to handle large amounts of orders. Scalping brokers also use modern and fast technology, which allows them to be very efficient at what they do.
Technical Tools for scalpers
Scalping relies heavily on technical software. Which is why it is of the upmost importance for the system to be fast and efficient. Not only are the performance requirements important, but the visual aspect of the software is of high priority to scalpers. A dedicated and experienced scalper will spend hours a day staring at the screen. Therefore, an interface that is easy on the eyes is very important. Also, a platform that allows the display of multiple time frames simultaneously is very important for keeping up to date with the latest price movements.
FAQ’s 3 questions and answers related to the topic matter:
Why do traders scalp?
Scalpers can make a large profit from many small profits. The technical analysis aspect of scalping draws attention to scalpers as well. A forex scalping system can either be manual or automatic- looking for signals on whether to buy or sell. The use of real-time charts is a scalpers best friend, and this method of analysis and trading attracts scalpers.
Why do some brokers disallow scalping?
Scalping requires a lot of technical power, techniques, and competence from a brokerage firm. If the brokers technological platform is out of date or too slow to handle large amount of trades in a short period of time they will run into issues. As well, brokerages need to have a system in place on how to deal with scalpers or they could lose money and become bankrupt- this often scares firms away from allowing scalping. Also, not all jurisdictions allow scalping- it depends where the broker is located.
Is scalping legal?
Yes, the practice of forex scalping is perfectly legal. However, you need to be in the right jurisdiction- some do not allow it. Scalping
Finding a broker that offers scalping is hard. But don’t worry we have saved you the time and effort by creating a list of the very best scalping brokers. Our list is compiled as the result of user reviews and our expert research.