Trading forex, which involves exchanging one currency for another on the foreign exchange market, involves a level of risk and complexity that you might not find in traditional investing. That's why it's especially important to choose a broker that helps you understand and navigate the potential costs and benefits associated with forex.
When selecting your forex broker, you should consider trading platforms and tools, the number of currency pairs offered, customer service and, of course, trading costs.
But comparing costs is tricky in forex trading. Some brokers charge a commission, while others are compensated with a spread, or a markup between the price they pay for an asset and what they sell it for.
That’s just one reason why the search for the best forex broker is complex. Another is that there are a variety of brokers, many of them unregulated or regulated in countries outside of the U.S. For our list of best currency trading brokers, we considered only those that are regulated by the National Futures Association and the Commodity Futures Trading Commission.
Among the riskier elements of forex trading is the rapid pace at which transactions are carried out. Forex trades also often use high leverage, which means investors can quickly lose more than their initial investments.
Of course, leverage means you can also profit at the same speed, which — combined with liquidity — is what attracts investors to currency trading.
One suggestion: All of these brokers offer free demo accounts so you can test the market with virtual dollars. Dip a toe in with some play money before using your own cash.
Top brokers for forex trading
Interactive Brokers
NerdWallet rating
on Interactive Brokers' website
Commission: 0.20 basis points if trading at or below 1,000,0000,000 in value per month. $2 minimum commission per order. Volume discounts available.
Currency pairs: 100+
Account minimum: $0
Inactivity fee: None.
Our take
Interactive Brokers is a well-rounded, multi-asset broker known for its powerful trading platforms. Forex traders will love FXTrader, which supports over 20 different order types, offers customized layouts and trading cell displays and allows you to transmit an order with a single click. Interactive Brokers' spreads are extremely competitive — the company advertises spreads as low as 1/10 pip.
Forex.com
NerdWallet rating
Commission:Choice of spread markup or commission account. Commissions are $5 per 100,000 traded per side.
Currency pairs: 80+
Account minimum: $100
Inactivity fee: $15 per month after there is no trading activity for 12 months.
Our take
Despite its name, Forex.com is also a multi-asset broker —in addition to forex, the company offers access to stocks, ETFs and options trading through its StoneX platform. The company offers an impressive suite of trading platforms, including integration with MetaTrader 5.
OANDA
NerdWallet rating
Commission: Spread markup. Elite trader program offers commissions and rebates for those who trade $10,000,000 per month.
Currency pairs: 60+
Account minimum: $0
Inactivity fee: 10 units of the currency your account is denominated in if there are no open trades for a period of at least 12 months.
Our take
OANDA offers forex and cryptocurrency trading (through a partnership with Paxos) and pricing flexibility —users can choose between spread-only pricing or the elite trader program, which is designed for active traders and offers rebates for high monthly trade volume.
Frequently asked questions
Which forex broker is the best choice for beginners?
Forex trading in general isn't where we'd suggest beginner investors get started — if you're brand new to investing, check out our list of the best brokers for beginners. That said, if you're a seasoned investor looking to dabble in trading forex for the first time, you might benefit from going with a more traditional broker to start, like Interactive Brokers.
How can I learn how to trade forex?
Many forex brokers offer paper trading tools that let you test different strategies without putting any money at stake. Virtual trading simulators like those are a good way to learn how to trade and understand the different strategies you might employ.
Which forex brokers offer the most leverage?
Many forex brokers will offer leverage of up to 50:1 on major currency pairs. Some brokers will reduce that for minor currency pairs, offering as little as 20:1 instead.
Methodology
How do we review brokers?
NerdWallet’s comprehensive review process evaluates and ranks the largest U.S. brokers by assets under management, along with emerging industry players. Our aim is to provide an independent assessment of providers to help arm you with information to make sound, informed judgments on which ones will best meet your needs. We adhere to strict guidelines for editorial integrity.
We collect data directly from providers through detailed questionnaires, and conduct first-hand testing and observation through provider demonstrations. The questionnaire answers, combined with demonstrations, interviews of personnel at the providers and our specialists’ hands-on research, fuel our proprietary assessment process that scores each provider’s performance across more than 20 factors. The final output produces star ratings from poor (one star) to excellent (five stars).
For more details about the categories considered when rating brokers and our process, read our full methodology.
