Interactive Brokers is simply not for the average trader. There are a lot of differences between this broker and your average forex dealer. For starters, IB is a true ECN. This means that you will not have the broker dealing against you, and the people at IB actually have an interest in seeing you succeed as they get paid in commission and not the spread.
It should be noted that this is a professional platform, and as such has variable spreads. You will never hear a word about scalping, or placing an order within the current spread. Interactive Brokers isn’t for the beginner, as it has massive abilities far beyond most forex brokers out there. It should also be noted that there are multiple order types, and as such gives massive flexibility to the trader. Also of note is that IB is a globally focused broker, allowing you to trade stocks, bonds, forex, futures, and options in over 90 markets around the world. To call it a forex broker isn’t telling the entire story.
The “TraderWorkstation” is a proprietary platform that IB offers. It should be noted that the platform allows for very different types of set ups, but isn’t the most user-friendly, there is simply a learning curve when starting out. However, the massive amount of order types certainly makes it a viable platform.
Charting is not IB’s strong suit. In fact, many professional traders will get a third party charting package such as NinjaTrader to display markets as the included charts are functional, but not great.
Interactive Brokers has customer agents around the world, and depending on the time you may find yourself talking to someone on the phone from Hong Kong, America, or even the UK. From experience, the customer service has been very helpful and professional through this broker. All agents speak English, and all call centers have multi-lingual agents in order to help customers worldwide.
The platform is very reliable, and the orders can be looked into as to whether or not they were valid as this is a true ECN, and professional set up. The platform has an uptime of over 99%, and being java can be run on any computer with Internet access.
The broker itself is extremely reliable, and is regulated in the United States as well as several other countries around the world such as the UK, Australia, and Japan. All accounts are segregated and deposited in accounts in home-based banks. If you are trading through IB Australia, your money will sit in an Australian bank for instance.
Commissions and Spreads
The commissions at IB are billed at 0.2 basis points of the trade value, or at the minimum a commission of $2.50 per turn. This is the one thing that will keep smaller traders away as it means to do a complete round-trip in the forex markets you are going to pay $5. Of course, the spreads are as good as you will find, with the markets occasionally trading at “even” since the spread is variable. However, you will find that the smallest position size you can trade on the spot forex market called IdealPro is $25,000 or more, meaning that the tick size on EUR/USD will be at least $2.50 per tick. There is an Ideal platform that you can use to convert money from foreign stock gains or losses that you can use smaller positions, but this market can slip so it isn’t recommended for an actual trade.
There are no promotions at IB, and I wouldn’t expect to see them. The broker is a choice of large funds as well as retail clients, meaning that the massive amount of capital that flows into the company make it unnecessary in order to bring people in.
- The ability to trade all over the world. You won’t outgrow this broker.
- The commission structure ensures that the broker has an interest in seeing you succeed. If you lose your account – they don’t get more commission.
- The platform shows true liquidity.
- The ability to trade currency futures as well as spot opens up all kinds of possibilities.
- The platform offers over 30 different types of orders for your trades.
- The spreads are incredibly small.
- True ECN and the deposits are segregated into local banks.
- Accepts US traders.
- Depositing and withdrawing can be done by either check, ACH, or Bank Wire.
- $10,000 to open an account.
- The commission ($5 round turn) makes trading FX through this broker expensive unless you are trading larger positions.
- The platform is a bit intimidating to new traders, as it offers so much.
- The charting isn’t great.
Interactive Brokers is without a doubt one of the best brokers in the business, be it forex or otherwise. However, it is not set up for the smaller account, and as a matter of fact, there is a minimum deposit of $10,000 to open an account. Because of this, the broker is out of reach for a lot of people. However, if you have the correct sized account – this is the Cadillac of brokers as you can trade just about everything from the same platform.