Best forex brokers of April 2024 by investfox

Selecting the right Forex broker has never been easy. It’s especially challenging now as local companies go global and the pool of brokers to choose from expands. Brokers vary in terms of fees, regulations, minimum initial investment requirements, and more. We have compared 5 well-established forex brokers to make choosing easier for you.

Here are our top picks for today’s comparison:

• XM - Reputable broker with extensive educational material.
   
• Pepperstone - Highly regulated broker that offers cTrader platform in addition to MT4 and MT5.
   
• Capital.com - Gives you access to a huge number of tradable instruments.
   
• AvaTrade - The safest broker out there regulated by a large number of regulatory bodies.
   
• HYCM - Broker with great customer support that’s available 24/5.
   

Let’s zoom in

It’s important to note that each broker is unique. We picked the most important aspects that we believe every trader should look for in a broker. What works for one trader might not work for the other. To aid you in choosing the one that fits you best, let’s take a look at each broker in more detail.

XM was founded in 2009 and has managed to grow very fast. The broker has 5+ million clients from all over the world. XM offers a vast amount of educational material including webinars, e-books, analytical content and more. The material is aimed at both beginners and professional traders. XM offers MetaTrader 4 and MetaTrader 5 platforms, both of which are widely used in the industry. Using these platforms you can trade more than 1,200 instruments including 55 FX pairs, 1000+ Share CFDs, 5 Cryptocurrencies, 14 Indices and 8 commodities.

It’s worth mentioning that the broker charges $15 inactivity fee after a year of inactivity and $5 monthly inactivity fee.

XM offers various account types to suit the interests of different kinds of traders. Let’s check them each in detail. 
 

Pros and Cons of XM

Pepperstone is an Australian born, highly regulated forex broker. The company is regulated by top tier financial institutions such as Australian Securities & Investment Commision (ASIC), Financial Conduct Authority (FCA) and others, which makes the broker an extremely trustworthy partner.

Pepperstone is one of the few brokers that offers cTrader platform as well as MT4, MT5, and TradingView. While MetaTrader 4 and MetaTrader 5 are the most popular among forex traders, cTrader offers a more modern and user-friendly interface.

Pepperstone offers up to 400:1 leverage. And the minimum initial deposit required is $200. There’s no dealing desk execution and therefore, fees are very affordable.

The broker offers two types of accounts: Razor and Standard. Both accounts have very reasonable prices. Moreover, the standard account type offered by this broker is superior compared to the standard account types offered by the rest.

Pros and Cons of Pepperstone

Capital.com offers a huge number of tradable asset classes ranging from Forex pairs to Stock CFDs. You can buy or sell more than 6,500 instruments. The broker is regulated by the Financial Conduct Authority of the UK (FCA), Australian Securities and Investments Commission (ASIC), and others.

What’s extremely impressive about this broker is the speed at which it has managed to grow. Established in 2016, the broker already has more than 400,000 clients across 180 countries.

Leverage at Capital.com is 1:30 and spreads start from 0.6 pips. The minimum initial deposit required is only $20. 1:30 is pretty low when compared to other forex brokers in the market. It's important to note that high leverage doesn’t necessarily mean a better option. Leverage gives you the opportunity to manage a larger amount of money using borrowed funds and can increase your profits. On the other hand, it can increase your losses too. Therefore, high leverage is sometimes referred to as a double-edged sword. 

Pros and Cons of Capital.com

AvaTrade was established in 2006. The company’s headquarters are located in Dublin, Ireland.

This forex broker offers trading access to 1,200 instruments using MT4, MT5 and web trading platforms. Regulated by various regulatory bodies, avaTrade is exceptional when it comes to safety. They offer negative balance protection and is a member of the Investors Compensation Fund. What’s more, the funds are kept in segregated accounts.

AvaTrade offers only one type of account type that can be upgraded to a professional account. The leverage offered is up to 1:400. Spreads on EUR/USD are starting from 0.3. The minimum initial deposit is $100. 

Pros and Cons of AvaTrade

HYCM has been providing trading services since 1998. The broker is from the United Kingdom and has been under strict regulations for more than 20 years. The broker is regulated by the Financial Conduct Authority (FCA), Cyprus Securities and Exchange Commission (CySEC), and others.

Leverage varies among asset classes. For forex pairs, maximum leverage of 500:1 is offered. For stocks and cryptocurrencies the number is 20:1, For commodities, it’s 67:1.

Instruments offered include more than 70 currency pairs, 28 indices, 17 commodities, 60+Stock CFDs, and cryptocurrencies.

HYCM offers 3 types of trading accounts: Fixed, Classic, and Raw. Raw spread accounts are generally preferred by high-frequency traders and scalpers. 

Pros and Cons of HYCM

Now, let’s compare standard account fees. In general, brokers don’t charge clients with commission on standard accounts and this rule is true for these 5 brokers. In addition, none of these brokers charge deposit and withdrawal fees, which is great.

As you can see, Pepperstone and Capital.com are the winners in the standard account category by providing the lowest spreads and no inactivity fees.

Keep in mind that the spreads shown in the table are just broker markups. In live trading conditions spreads can be much higher. To protect yourself from high spreads, you should trade highly liquid assets like major stocks, cryptocurrencies, and currency pairs. Examples of highly liquid currency pairs: EUR/USD, GBP/USD, USD/JPY, etc. Examples of highly liquid stocks: TSLA, AAPL, AMZN, etc.

High liquidity not only gives you the lowest spreads but also reduces the risks of slippage. Slippage simply refers to buying or selling an asset on an unintended price. Slippage usually occurs in low liquidity environments where spreads are high, and market orders are swallowing limit orders.

When it comes to forex trading, there are various platforms to choose from, but the most popular ones are MetaTrader 4, MetaTrader 5, and cTrader.

MetaTrader 4 was created by MetaQuotes in 2005 and the platform specializes in currency trading. MT4 is the oldest trading platform among the 3 and has a large pool of users. As a result, there can be many trading algorithms found on the market. MetaTrader algorithms are also called Expert Advisors (EAs) and help traders automate their trading.

MetaTrader 5 is a younger brother of MetaTrader 4. The platform was created in 2011. The main difference between the two is that MT5 offers more tradable instruments such as Crypto, CFDs, Stocks, Indices, and more.

cTrader is very user-friendly and offers advanced features for market depth and extensive tools for technical analysis. The platform offers more timeframes and detachable screens. What’s more, cTrader can give you access to level 2 market depth.

When it comes to trading platforms for trading Forex markets, Pepperstone is the clear winner. As for the other aspects like trading stock CFDs and mobile trading, the broker is a little bit behind competitors. 

Strict regulations are put in place to protect traders’ interests. Some regulators require brokers to keep funds in segregated accounts. Some help you get refunds in time, process withdrawal requests instantly, and more. The higher the number of strict regulators your broker has, the better it is for you.

When it comes to safety AvaTrade and Pepperstone shine. Pepperstone is highly regulated by strict regulators. Whereas, AvaTrade operates under some strict and many average regulatory bodies. 

When choosing a broker, the first and foremost thing to consider is safety. The world of Forex is full of money traps. You want to invest with a broker that is highly regulated. All of the 5 brokers we have chosen are regulated by trustworthy financial institutions.

Another important topic is fees. Fees can make or break a trader. Especially high frequency traders that place more than 10 trades a day, are looking for low spreads. Generally, brokers are offering raw account types charging very little spread for each trade. On the other hand, raw accounts are often charged with commission. Moreover, keep in mind that there are hidden fees like inactivity fees. Some brokers even charge deposit and withdrawal fees.

The third important thing to consider is platform. Most forex brokers are offering MetaTrader 4. MT4 specializes in currency trading. Whereas it’s younger brother MetaTrader 5 is offering a wider range of trading instruments including Cryptocurrency CFDs, Stocks, Commodities and Indices. cTrader is usually preferred by novice traders due to its user-friendly features and outstanding design.

In addition, the more asset classes offered the better. Trading strategies and styles differ throughout asset markets. Stocks move very differently than currencies do. As a trader, you want to be able to have a choice and try different markets to see what works for you best. Most Forex brokers offer stock CFDs instead of real stocks. CFDs stand for Contract For Difference and they are the preferred trading instruments for short term speculators. Trading CFDs help you benefit from price moves in both bull and bear markets. Liquidity in the CFD market is much higher than in stock, commodity, and indices markets. It’s worth mentioning that long term investors prefer actual assets instead of CFDs due to lower long term holding fees.