Top 5 Forex Brokers In The World
There are thousands of online Forex brokers, all keen to take your hard-earned money, and sadly, there are many unregulated brokers with no regard to you as the customer. Visit any Forex forum, or do a Google search for scam Forex brokers, and you will find many unhappy Forex traders relaying horrendous stories of scam Forex brokers taking their money.
Forex is a highly liquid market, with $6.6 million traded 24-hours a day, five days a week. And, as 95% of Forex traders lose, Forex brokers can make a lot of money from uneducated traders.
Finding the right Forex broker is essential if you want to start trading Forex. The top 5 Forex brokers in this guide are all established, trustworthy and regulated. So you know you are trading Forex with a level of security for your account deposit.
This guide to the top 5 Forex brokers in the world can help you avoid online Forex scam brokers and start trading with a Forex broker you can trust.
- How Forex Brokers Make Money
- What Are The Different Types Of Forex Brokers?
- Regulated And Unregulated Brokers
- How To Find A Trustworthy Forex Broker
- The Top 5 Forex Brokers In The World
- Recap Of The Top 5 Forex Brokers Of The World
How Forex Brokers Make Money
Most Forex brokers make money from the spread on a currency pair, the difference between the buy and sell price. The spread may be small, like 1 or 2 pips, so it's hardly noticeable to your trade results. For instance, if the GBP/USD sell price is £1.2000, and the buy price is £1.2050, the broker's profit is the difference between the two. And with thousands of Forex traders on the broker's platform, those small amounts add up every day.
Some Forex brokers make money by taking the opposite side of your trade. If you submit a buy order, they'll place an equivalent sell order. And, as 95% of Forex traders lose money, it's guaranteed that the broker will come out ahead most of the time.
What Are The Different Types Of Forex Brokers?
There are two types of Forex brokers.
- Dealing Desk (DD)
- No Dealing Desk (NDD)
Dealing Desk Brokers (DD)
Dealing desk brokers are Market Makers. These are the brokers that take the opposing trade to yours. So instead of trading against other retail Forex traders, your opponent is your broker.
Doesn't this seem like a conflict of interest?
Well, yes, you could think so. But not all dealing desks are bad. If you lose a trade, it's no different than your loss contributing to a retail Forex trader taking the win.
What sets dealing desk Forex brokers apart is how they treat their customers. Some of the leading social trading platforms are market makers but have great customer reviews from Forex traders.
For a while, as you learn how to trade Forex, you may have more losses than wins. Or, you may get your lot sizes wrong, and a significant loss could take out lots of small profits.
It takes time and experience in the Forex market to develop as a Forex trader.
No Dealing Desk Brokers (NDD)
No dealing desks don't take the opposite trade to the customers. Instead, they link two parties together, and your order is sent directly to the interbank to be processed. The NDD brokers profit with a small commission on trades or slightly increase the spread on currency pairs. An NDD broker is a popular choice for professional Forex traders.
Under the NDD banner, there are two types of processing options:
1. Straight Through Processing (STP) Forex Brokers
STP is an acronym for Straight-through Processing.
STP brokers make their money from the spread, and you are trading against other retail traders in the Forex market. STP brokers use liquidity providers for currency prices, and they keep the difference in the spread price.
STP brokers may have several liquidity providers to research the best price for maximum profits whilst still giving their customers a fair price on currency pairs.
The mark up on currency pairs is likely no more than 1 pip. Some STP brokers offer variable spreads, and others provide fixed rates, and you will know which it is from the outset.
2. True ECN Broker
The difference between an STP broker and a True ECN broker is that the latter adds a small, fixed-rate and proportional commission on every trade, win or lose.
True ECN brokers are popular with traders who run automated Forex trading systems.
Check Out: How Difficult is Forex Trading?
Regulated And Unregulated Forex Brokers
Search online for a Forex broker, and there are thousands of search results. Novice Forex traders do not understand Forex regulation because they don't do enough research to protect their money.
Trading Forex with a regulated Forex broker won't stop you from losing trades. That's down to your Forex trading skills. But, it does provide reassurance that you have some protection for the money in your trading account if the broker suddenly closed down.
Unregulated Forex Brokers
Unregulated brokers have no licence with a governing financial body. That means they can lay out their own trading rules and do not have to follow trading guidelines. You have zero protection if something goes wrong.
Regulated Forex Brokers
A regulated Forex broker has a licence with the financial regulatory body of their country. In the UK, for example, this is the Financial Conduct Authority (FCA). Some larger brokers have licences for more than one country.
Regulated Forex brokers must comply with the given rules and guidelines of the regulatory body. You can lodge an official complaint with the governing body if your broker fails to adhere to the rules and guidelines.
Regulated Forex brokers must submit regular account records on time and submit evidence of regular audits.
How To Find A Trustworthy Forex Broker
Do your research before depositing money with a Forex Broker. Even regulated brokers aren't all great, and some have poor customer service, so it pays to do the checks:
- Is the broker regulated?
- Have you researched online reviews or broker comparisons?
- Do they have an account on TrustPilot? If so, read customer comments
- Are they a DD or NDD broker?
- What is the minimum deposit?
- What payment processors do they use?
- How quickly are withdrawals processed?
- What trading platform do they use?
- What are trade commission fees?
- Does the website have multiple contact options like email, live chat, support tickets, instant message etc.?
It won't take more than an hour to do the above checks, but it could save you heartache later down the line.
So, now to the main feature of the guide. Let's find out who are the top 5 Forex brokers in the world.
The Top 5 Forex Brokers In The World
1. Pepperstone - A World-Class Forex Broker
Established in 2010, Pepperstone Group Limited, an Australian-based company, owns Pepperstone Limited. It has become one of the largest Forex providers worldwide.
In 2016, Pepperstone Limited launched in the UK and expanded services to European clients and the UK. The Pepperstone Group has offices in London, Melbourne, Dallas and Bangkok.
Pepperstone has top-tier licences
- Pepperstone Limited - FCA (UK)
- Pepperstone Group Limited - ASIC (Australia)
- Pepperstone Markets Limited - SCB (Bahamas)
- Pepperstone Markets Kenya Limited - CMA
- Pepperstone EU Limited - CySEC (Cyprus)
Pepperstone offers ECN accounts and is fully digital with powerful trading and research tools. Customer support is excellent, and Pepperstone has a quality section for Forex trading education.
One downside to Pepperstone is that you can only access a demo account for 30 days, which is certainly not sufficient time to learn Forex if you are a novice trader and customer support is available 24/5.
The minimum deposit is only $200. Funding and withdrawal options are the following electronic wallets:
- Union Pay
Pepperstone serves retail and institutional Forex traders, providing the best market prices with low-cost fees, which it can do through accessing multiple liquidity providers.
Pepperstone is a 6X winner of Exporter of the Year | Digital Technologies | Governor of Victoria Export Awards 2017, rating number one for:
- Overall Client Satisfaction
- Value for Money
- Execution Speed
- Platform Reliability
- Platform Ease of Use
- Investment Trends
Pepperstone are also a 3X winner of UK Forex Awards:
- Best Forex ECN broker
- Best Forex trading support
- Best Forex trading conditions
Pepperstone has 1,291 Trustpilot reviews with a 4.7-star rating and is one of the world's best Forex brokers.
2. IG Markets - One of the Best Forex Broker in the World
Number two on the list of top 5 Forex brokers in the world is IG Markets.
IG started in 1974, initially launching into the stock market. They have an excellent reputation with Forex traders as the pioneer for Forex and the CFD field. With a trust score of 99 (out of 99) and five-star rated premium services, IG markets earned the right to be one of the top 5 Forex brokers in the world
IG has impressive regulatory licencing with dozens of countries from tier 1 to tier 3. IG has achieved massive success where many other Forex brokers fall short.
Trading commissions are more than acceptable, and the platform is well structured and user friendly and mobile trading is available. The mobile app includes:
- Economic calendar
- Watch lists
- In-depth market information
IG specialise in Forex trading, but if you feel like branching out your trading, they also offer:
- Tradable symbols
- US stock trading (non CFD)
- Cryptocurrency (CFD)
- Int'l stock trading (non CFD)
- Social trading
- Tradable symbols
IG Markets offer a selection of trading platforms:
- Proprietary platform
- Virtual trading
- Desktop platform
- Web-based platform
- Social trading
- MT4 (MetaTrader)
- Charting trade
- Order type
IG Markets is a publicly-traded company and a world-class broker for Forex trading. There are a broad range of education and trading tools, several withdrawal options, low deposit.
Payment options are debit/credit card, PayPal or bank transfer. The minimum deposit is £250.
Occasionally customers have expressed dissatisfaction with high Forex fees, but that hasn't been our experience. Customer support would benefit from being a bit quicker, but Forex traders across the globe trust overall IG markets.
IG Markets has just under 5,000 Trustpilot reviews with a 3.8-star rating. Bear in mind that many novice traders complain about a Forex trading platform, but in reality, a lack of Forex trading knowledge caused the issue.
3. eToro - The World’s Leading Social Trading Platform
eToro is the world's leading social trading platform with over 23 million registered users. Established in 2007, eToro led the Fintech revolution by opening up trading and investing to a global audience.
eToro has a vast range of Forex trading tools, offering a reliable proprietary trading platform suitable for Forex beginners and veteran traders alike.
eToro launched OpenBook in 2010. The world's first copy trading service was born, enabling eToro users to use the CopyTrader™ feature to replicate the trades of successful and verified eToro Forex traders.
eToro is licensed and regulated by several governing bodies, including the United States -
- The Financial Conduct Authority (FCA) UK
- Cyprus Securities and Exchange Commission (CySEC)
- eToro USA is operated by eToro USA LLC, registered with FinCEN as a Money Services Business.
- Australian Securities & Investments Commission (ASIC)
eToro is regulated in two-tier 1 jurisdictions and one tier 2 jurisdiction, making eToro a trusted and secure broker for trading Forex.
The proprietary web trading platform is user-friendly, and trading fees are competitively low. You can also trade Forex on the go by downloading the eToro app available on Google Playstore or Apple store.
The eToro education section is quite basic and doesn't go into a lot of detail. If you want to learn how to trade Forex, you can find better avenues for a Forex trading education.
Deposit and withdrawal options for eToro are the following -
- Credit/Debit cards
- Rapid Transfer
- Klarna / Sofort Banking
- Bank transfer (there is a $5 fee for withdrawals)
eToro has 9,939 Trustpilot reviews with a 3.9-star rating.
4. CMC Markets - One of the Best Forex Brokers in the World
CMC Markets is one of the best web platforms for trading Forex, adapting to the ever-expanding online Forex market. CMC is a publicly-traded, well established UK Forex broker founded in 1989 and regulated by the UK's Financial Conduct Authority (FCA).
CMC Markets is listed on the London Stock Exchange (LSE) under the ticker symbol CMCX. CMC does not accept United States traders. It is suitable for all levels of Forex traders, from the beginner to the professional Forex trader.
Trading fees are competitive, and CMC has excellent customer service, a good level of trading education options, and industry-leading research amenities.
CMC Markets ranked as the winner of Investopedia's Best Overall Forex Broker for their range of 2020 trading offerings.
There is no account deposit minimum, and payment options are debit or credit card and bank transfer. You can withdraw up to the total of your initial deposit. For example, if you deposited £500, that's the sum you can withdraw using the same method as the deposit.
CMC Markets has over 1,200 TrustPilot reviews with a 4.2-star rating.
5. Saxo Capital Markets UK – A World-Class Forex Broker
Founded in 1992, Saxo Bank says it is "a leading Fintech specialist focused on multi-asset trading and investment and delivering 'Banking-as-a-Service' to wholesale clients."
Saxo Bank was the first company to launch an online trading platform in 1998. It has operated in the United Kingdom since 2006 via Saxo Capital Markets UK (SCML). Like many Forex brokers, Saxo Capital Markets is regulated by the FCA (UK) and does not accept United States traders.
SCML is more suitable for advanced Forex traders because small account retail traders may encounter obstacles such as higher fees, account minimums, and reduced customer support options. If you're just starting on your Forex trading journey, you could have a bit of a tough time reaching the higher customer tiers, and fee structures can be confusing.
Spread fees are competitive with the Forex market.
Accounts with considerable equity have more benefits. The minimum deposit is £500, and deposit methods are debit cards or bank/wire transfers.
That said, in 2020, SCML ranked as the winner for Investopedia's Best Forex Broker for Advanced Traders.
Saxo Markets does not have an independent TrustPilot account.
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Recap Of The Top 5 Forex Brokers In The World
As eager as you are to start trading Forex, take your time choosing the right broker.
Our list of the top 5 Forex brokers in the world is an excellent start if you don't want to spend time searching online for a Forex broker.
Regulated brokers display their regulation details on the home page and often on the bottom of every page on the website. Read the small print and check deposit requirements and how easy it is to withdraw, including withdrawal methods.
The top 5 Forex brokers in the world are all regulated, secure Forex brokers. Apart from Saxo Capital Markets, all of the Forex brokers are suitable for beginners to Forex trading.
Finding a Forex broker if you are trading Forex in the United States can be a challenge. eToro welcomed US traders to their platform in 2018, and Saxo Bank has a global client base, though Saxo Capital Markets are regulated for the United Kingdom.
Please note that the above information is not providing advice on tax, investment, or financial services. We provide the above information without consideration for risk tolerance and a specific investor's financial circumstances.
Trading or investing in financial instruments such as Forex may not be suitable for all investors. It does involve risk and the possibility of a loss of capital. There are no guarantees for profiting from trading Forex, and it's advisable only to risk what you can comfortably afford to lose.
eToro – Best Social Trading Platform
67% of retail investor accounts lose money when trading CFDs with this provider