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.
Here are NerdWallet's top brokers for forex trading.
3 best brokers for forex trading
Online broker | Details |
|---|---|
NerdWallet rating Learn More on Interactive Brokers' website 4.9 | 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. |
4.3 | 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. |
4.1 | 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. |
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.
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Charles Schwab | Interactive Brokers IBKR Lite | J.P. Morgan Self-Directed Investing |
|---|---|---|
NerdWallet rating 4.9/5 | NerdWallet rating 5.0/5 | NerdWallet rating 4.1/5 |
Fees $0 per online equity trade | Fees $0 per trade | Fees $0 per trade |
Account minimum $0 | Account minimum $0 | Account minimum $0 |
Promotion None no promotion available at this time | Promotion None no promotion available at this time | Promotion Get up to $700 when you open and fund a J.P. Morgan Self-Directed Investing account with qualifying new money. |
Learn More | Learn More | Learn More |
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.
