Talk to a beginner, or novice in the Forex market and you will often hear questions such as; what is the forex market? Who is a Forex Broker? How can I select the best Forex broker? And other numerous questions as regards forex trading. Here is an ultimate guide provided for beginners or new prospects in the forex trading world. This guide is specific to help those in the USA to help select the best forex broker while starting their journey in the Forex world. This guide will enlighten you on the top Forex broker in the US.
Let us begin by defining the forex market. The forex market is the largest and most liquid market in the world, representing every global currency with trading conducted 24 hours a day, five days a week. Now that we have known what a Forex market is, it is important to know “Who is a Forex broker”. A Forex broker simply put is an intermediary who buys and sells a particular asset or assets for a commission. Thus, a broker may be thought of as a salesman of financial assets.
As a beginner in the Forex market, how can you select the best forex broker in the USA? In our forex brokers reviews list, we have taken into account a wide range of ranking factors, from fees and spreads to trading platforms, charting, and analysis options in entirety that gives you knowledge on the top Forex brokers in the USA.
BEST FOREX BROKERS US COMPARISON 2020
| Image | Name | Key Features | Action |
|---|---|---|---|
| Oanda.com | Best for High Volume TradersAccepts US Traders Minimum Deposit: 1 USDMaximum Leverage: 1:48Trading Platform: Mt4, Mt5, Web, Mobile | Check Now | |
| Forex.com | Best For Educational PlatformAccepts US Traders Minimum Deposit: 50Maximum Leverage: 1:50Trading Platform: MT4, MT5, WebTrader | Check Now | |
| TDAmeritrade.com | Best For Trading PackagesAccepts US Traders Minimum Deposit :1Maximum Leverage: 1:50Trading Platform: Two platforms: TD Ameritrade web and thinkorswim (desktop) | Check Now |
Looking for Offshore Brokers for flexible trading ( No FIFO, NO CFTC RULE), Check out our content on 3 Offshore forex brokers for US Citizens
HOW TO CHOOSE BEST US FOREX BROKER IN US
When considering the idea of Forex trading, working with the right forex broker can be all you need to be successful in the Forex market. A Forex Broker can make the difference of whether you will buy a new car before the end of the year, or sell that old one you have been managing to pay up debts incurred. No doubt, it can be a puzzle to figure out where to find the best Forex trading broker that offers topnotch Forex trading services, and a bit of a challenge to make sure the broker is reputable and can meet your needs. Hence, here are a few things to consider while choosing the best Forex broker in the US.
(a) Security:
The first and most important factor to consider while selecting a forex broker is security. A top forex broker in the USA must have a high level of security. You certainly would not want your hard-earned dollars to fall into the hands of scammers who use your money to go for vacation in Borabora Island, while you shed hot premium tears. This is why it is important that you select a broker in the US who is a member of the regulatory body. The name of the regulatory body in the USA is called National Futures Association ( NFA ) and Commodity Futures Trading Commission ( CFTC ).
(b) Transaction Costs:
As a trader, it is important to note that you cannot do away with transaction costs. As a newbie in Forex trading, you might want to look for forex brokers with the cheapest and affordable rates when paying for spread commission. I do suggest always not to because of a few bucks select an unreliable broker as you could lose your hard-earned cash. Always strike a balance between security and low transaction costs.
(c) Deposit and Withdrawals:
When investing my money into any investment I usually consider the convenience of withdrawing my profits at the appropriate time. A good forex broker would ensure that the withdrawal process is speedy and smooth.
(d) Trading Platform:
No one wants to have their online transactions on a website that is not user-friendly and also unstable. When choosing a forex broker it is important to check out what the trading platform has to offer. One of the most important things to look out for on a trading website is if it has easy-to-use technical and charting tools, video tutorials or tours to guide users with all the information they need to trade properly.
(e) Execution:
Execution is important in Forex trading, and it is a factor to consider while selecting a forex broker. A forex broker is mandated to fill you at the market price you see when you click the “buy” or “sell” button. A minute difference in price can make it difficult for you to win a trade.
(f) Customer service
We would all agree that customer is King and this phrase should be adopted by all businesses in dealing with their customers. A Forex broker understands that the customers are the reason they exist and as such the proficiency of brokers when handling the account and technical support issues is just as fundamental as their performance on executing trades. A top Forex broker in the USA should ensure they provide good customer service support to customers during the process of account opening and even after-sales support.\
(g) Regulated Broker
When choosing a forex broker in the USA it is important to select a regulated broker. A proper regulation helps to ensure that the forex broker maintains standard practices and also guarantees the safety of your money. This article will also help to enlighten you on US brokers’ regulations.
5 THINGS YOU SHOULD KNOW ABOUT US FOREX BROKERS
- A US forex broker allows for a trader to keep a tab on the rise and fall of exchange rates. Through this, they can pinpoint the optimal time to purchase a currency pair based on their potential returns.
- Dealing with US forex brokers is as easy and simple as counting ABC. It’s all done online and the only requirement is a deposit into the trader’s account to serve as collateral. The broker then provides leverage so that traders can trade in higher quantities than the deposit offered.
- Forex, Oanda, and Td Ameritrade all offer excellent customer service support during the account opening process and even after-sales support.
- Top US brokers offer very high leverage to individual traders who can control a large trade with a small account balance.
- The three forex brokers discussed above focus on helping new forex traders to understand the macroeconomic fundamentals driving currency values and experience with technical analysis to become more profitable.
DIFFERENCES BETWEEN US FOREX BROKERS AND NON-US FOREX BROKERS
REGULATION
US Forex brokers are well regulated compared to non USForex brokers. US forex brokers are regulated by National Futures Association ( NFA ) and Commodity Futures Trading Commission ( CFTC ) which is why it is important to select a US Forex broker over a Non-US Forex broker because they work under a strict regulatory environment.
Some offshore Forex brokers are regulated by offshore regulators which include the International Financial Services Commission (IFSC) which operates in Belize, Vanuatu Financial Services Commission (VFSC), and Cayman Island Monetary Authority (CIMA). Many US traders are trading with Offshore brokers for the flexibility of trading like high leverage, hedging, etc. Also, Offshore brokers run on reputation other than regulation.
GEOGRAPHICAL LOCATION
US Forex brokers only attend to US citizens and US permanent residents which even makes them more secure to their clients and also reduces the traffic on their app or website which could give traders issues.
Offshore brokers take on clients from all over the world and some even accept US residents even though some of those who do might not be regulated but then they exist based on their good reputation.
MINIMUM DEPOSIT
US Forex brokers require traders to deposit a minimum of around $50-$100 for opening balance this is due to the leverage caps imposed on retail Forex trading.
Non-US Forex brokers allow traders to open accounts with as low as $10 for opening balance.
LEVERAGE
For US Forex brokers they have a leverage cap of 1:50 for Forex majors and 1:20 for Forex minors this was mandated by the CFTC (The Commodities and Futures Trading Commission).
Non-US Forex brokers usually have higher leverage of up to 1:2000. They have leverages ranging from 1:25, 1:200, 1:500, 1:1000, and 1:2000. This gives you an opportunity to select from the wide range of choices provided in trading your preferred currency pairs
WHAT IS BROKER REGULATIONS?
Forex broker regulations vary from country to country as each country has its own regulations and regulatory bodies that regulate Forex brokers. Without these regulatory bodies, there will be numerous issues with dealing with Forex brokers as there would be cases of people losing out their hard-earned cash to dubious Forex brokers. This is why I stated earlier that as a Forex trader in the US it is important to deal with only Forex brokers that are regulated in the USA. Being regulated does not mean there won’t be issues with the Forex brokers but the regulatory body holds them accountable for their actions and as such this ensures the safety of your money.
Below is the Forex Broker’s regulation in the USA discussed extensively.
US Forex Market Regulations
Now that we already know what Forex trading is, and discussed the best Forex brokers for the US, it is also important to talk about the US Forex market regulations. Think about it this way, in order to be a professional driver, one has to learn how to drive a car right? Purchase a car, and also know about various driving and traffic rules. This can also be applied to Forex trading. Retail Forex trading is unpredictable and has ceaseless growth. As a result of this perpetual growth, there is a high probability for brokers to participate in financial irregularities, scams, exorbitant charges, hidden fees, and other bad practices. The essence of the US broker regulations is to ensure that brokers do not engage in bad practices. Regulations are aimed at protecting traders and also ensuring fair operations by brokers to safeguard traders’ investment in the US.
Proper steps should be taken to verify ownership, status, and the location of each forex trading firm, website, or app before signing up for a trading account. Offshore brokers claim to offer low brokerage charges and high leverage (allowing more trading exposure with less capital); some as high as 1000:1; these brokers operate from outside the United States and are not approved by the NFA and CFTC in the US. However, US broker websites such as forex.com, oanda.com, tdameriTrade.com have regulations that apply to US residents and these are top Forex brokers in the US to consider while making a choice.
The essence of regulation is to help maintain standard practices and guarantee the safety of your money. Depending on the country, Regulations on leverage, deposits, and investor protections would differ from that of another country.
US FOREX REGULATORY ORGANIZATIONS:
There are 2 main regulatory bodies in the USA, the NFA, and the CFTC. These bodies work together with other sub-bodies to regulate the Forex markets, and other derivatives and OTC markets.
The following are the organizations that regulate forex trading in the US:
Commodities Futures Trading Commission (CFTC): The CFTC has the ultimate regulatory authority over the forex markets. The Commodities Exchange Act provides the legal framework within which the CFTC operates. The CFTC has a set of established CFTC regulations to govern the forex trading markets. All non-bank forex brokers dealing with retail clients are covered by the CFTC regulations.
National Futures Association (NFA): The NFA is an independent self-regulated organization and watchdog for the commodities and futures industry in the US. The CFTC has designated the NFA to safeguard the integrity of the derivatives market, protect investors and ensure Members meet their regulatory responsibilities.
The NFA enforces its rules by taking disciplinary actions against members by issuing fines and suspending operations of their members when appropriate. The National Futures Association (NFA) ensures that Forex traders are protected by offering a variety of resources to help investors make the best investment decision. The NFA also ensures its members respect their regulatory responsibilities for better trade integrity and trading standards.
The NFA also ensures through their regulations that Forex brokers must collect security deposits from their customers as this helps to protect the brokers against losses that might cause them to be insolvent.
Office of the Comptroller of the Currency (OCC): The OCC is an independent bureau of the U.S. Department of the Treasury. The OCC is responsible for regulating Forex trading for national banks and foreign banks. The OCC has put in place regulations to govern banks as required by the Commodities Exchange Act. All banks dealing in forex transactions with retail clients are subject to these OCC regulations.
To be an NFA and CFTC FX broker, a broker must follow the rules listed below:
Follow safe and transparent best market practices:
- hire knowledgeable and professional staff,
- use real facts and numbers in advertising and promotional materials without misleading traders,
- submit reports and financial statements that are later on published on the NFA website,
- follow the FIFO rule (first in, first out),
- never open positions against its clients,
- never allow hedging for traders,
- offer a leverage effect of 50:1 maximum
- Keep client funds in segregated accounts,
- Have at least $20,000,000 in operating capital.
Pros
- The US regulated brokers work under a strict regulatory environment
- US regulated brokers provide software and data for traders and they make it easily accessible
- US regulated broker offers a feature that allows traders to be able to control and limit risk depending on their trading account.
- They offer minimum deposit fees and much flexibility concerning withdrawals. These regulated brokers make it easy for you to withdraw your money without hassles.
- They also offer demo accounts to brokers for practice without losing any money. This helps to guide them easily into learning how to trade and also safeguards their money.
Cons
- The US regulated brokers charge high withdrawal fees for bank transfers
- Some of these US-regulated brokers have research tools that are poorly organized which are not explicit enough to guide beginners.
- The 24/7 markets make it difficult to regularly monitor prices and volatility
- One of the cons to be duly noted is that there is no centralized exchange house. The broker is the one that acts as the exchange which makes him the market maker automatically.
BEST TOP 3 FOREX BROKERS IN THE USA 2020
1. OANDA.COM – BEST FOR HIGH VOLUME TRADERS
Feature
Regulation: CFTC, IIROC, FCA, ASIC, MAS, IFFA
Products Offered: Forex, CFD
EA/ Robots: Allowed
Demo Account: Available
More features: Demo Account Available, Live Chat and Phone Support, OANDA does not offer “negative balance protection” for U.S. clients.
To the experienced Forex trader, mention the name OANDA and they think of how much they have made through this Forex broker. It is well known for its standard trading platforms and below-average trading costs. The company ensures to differentiate itself from other Forex brokers with its top-notch execution quality and accountability. Key features that give OANDA a competitive advantage in the Forex market include pricing transparency, regulatory oversight, platform technology, and comprehensive product offering.
Another important point to know about OANDA is that it was one of the first companies that offered inclusive currency exchange information online. OANDA is considered safe because it has a long track record, discloses its financials regularly, and is also one of the brokers regulated by top-tier authorities. This automatically translates that your money is safe with OANDA. Sounds enticing right? You already know what to do. Before you make a decision, let’s examine some of the pros and cons of trading with Oanda.
PROS
- Low fees are charged.
- Accounts can be opened with as little as one dollar
- Its web trading platform is convenient to use.
- OANDA is also regulated by major governmental regulatory bodies
- It has a fully digital account opening process
- OANDA also boasts of the advanced trading platform
CONS
- OANDA has restricted leverage
- It also has no fixed spread accounts
- High withdrawal fees when conducting bank transfers
- OANDA customer service representatives are brilliant but could be slow to respond
2. FOREX.COM – BEST FOR API TRADING
Feature
Regulations: NFA, FCA, IIROC,CFTC
Products Offered: Forex,commodities,cryptocurrency,stocks,share,metals
EA/ Robots: Allowed
Demo Account: Available
More features: Possibility of Free VPS, Demo account, Live Chat support on hand to the assistant, email, online and phone
FOREX.com is widely known for its robust trading platform for both the new trader and the professional. FOREX.comdelivers a superb trading experience for Forex and CFDs traders in the US. Pricing at FOREX.com is convenient to understand and also offers tight spreads on cryptocurrency CFDs.
As a new trader, FOREX.com is an outstanding choice for brokers searching for a base for their currency trading. The platform provides extensive education and research center that provides free and informative forex trading courses at multiple skill levels for Newbies and experienced traders. This feature sets them apart from other Forex brokers in the US.
PROS
- Impressive and easy to navigate platform.
- Provides a wide range of education and research tools
- Its web trading platform is also user-friendly
- FOREX.com delivers a great experience to forex traders of all experience levels.
- TradingView charts are also built into the platform
- FOREX.com regulated by several authorities
CONS
- FOREX.com has high stock CDS fees
- It has no negative balance protection
- It has limited customer support options
- Traders cannot buy or sell other securities (i.e. stocks and bonds)
- FOREX.com has a slow account verification
- FOREX.com has a limited product portfolio
3. TDAMERITRADE.COM – BEST FOR TRADING PACKAGES
Feature
Regulations: Product
Products Offered: Product
EA/ Robots: Allowed
Demo Account: Available
More feature: Demo Account Available, Live Chat and Phone Support, Negative Balance Protection Available
TD Ameritrade is one of the biggest online brokers and it has continued to build on its edge with beginner traders. The extensive educational offerings help new investors become more confident and motivate them to explore additional asset classes as their skills grow. The website is known for its special feature known as “the thinkorswim”
For expert traders, “the thinkorswim” platform offers all the data, charting, and tools needed to find great market opportunities. The sheer number of tools and research available through TD Ameritrade can be a bit overwhelming for the expert traders but not for new traders. The thinkorswim Earnings Analysis tool makes it a favorite for planning ahead for earnings releases and assessing each company’s results afterward.
TD Ameritrade requires a $0 minimum investment and delivers standout features, including; free and extensive research and data, portfolio-building guidance, $0 commissions for the stock, options, and exchange-traded fund trades, and nearly 300 branches for in-person customer support. Investors have a choice of four trading platforms.
TD Ameritrade’s website includes a handful of distinctive tools. For example, the Social Signals tool unveils both a real-time streaming feed of algorithmically filtered brand-relevant tweets and a summary chart of the most-tweeted brands.
PROS
- Great customer support channels
- Free research materials
- No deposit fees
- High-quality trading platforms
- Low trading and non-trading fees
- Free ETFs and Stocks
CONS
- High withdrawal fee for wire transfers
- No credit/debit cards and electronic wallets withdrawal option
- Trading is made only on US markets
WHY DO I NEED A FOREX BROKER?
As a beginner in the Forex trading world, it is a common question to ask why you do need a Forex broker. A Forex broker is needed because there are buyers and sellers of different currencies, they need a place to come together to trade and a facility to buy and sell those currencies. A Forex broker connects retail forex traders with the market. Before the existence of Forex brokers, individuals who wish to trade in foreign currency needed to have a large amount of money and a remarkable relationship with a bank to purchase foreign currencies. Forex brokers in the US also help you to learn about the forex market with tutorials provided to guide you as a beginner to ensure that even as a beginner you make a profit.
When searching for a Forex broker in the US, take your time, open a Forex demo account with the broker you are interested in and try it out to learn the market. It is also important to note that if you plan to continuously trade Forex you would have to select a reliable Forex broker in the USA.
IS FOREX TRADING LEGAL IN THE USA?
Everyone hates dipping their hands into illegal business and as such beginners do always ask this pertinent question “ is Forex trading legal in the USA” to avoid being involved in the illegitimate business. I would rather answer this question by asking you a question which is “Why is there a governing body in the USA for an illegal business”. Of course, Forex trading is a legal business in the USA but US Forex brokers must be licensed as futures commission merchants (FCM) and must also possess a retail foreign exchange dealer (RFED) license.
WAYS TO IDENTIFY AND AVOID FOREX SCAM
Plenty of scams have been associated with trading forex. Despite these scams, it is important to note that Forex is a legitimate business. You can engage in forex trading as a real business and make real profits. Many popular Forex scams have ceased thanks to the relentless efforts by the Commodity Futures Trading Commission (CFTC) and the National Futures Association (NFA) even though new scams keep popping up despite these efforts. The major technique employed by these unscrupulous elements is luring traders to earn fortunes within a limited amount of time.
First, it is common practice for Forex traders especially beginners who are looking for cheap deal and ways to make huge profits to fall into the hands of offshore and unregulated brokers. Kindly take note of offshore and unregulated brokers who offer you mouth-watering deals they do always appear to be real and the profits they dole out always seem fascinating but they are only trying to rip you off your hard earned money.
Furthermore, there is also a common practice by Forex brokers which you should watch out for they offer wide bid-ask spreads on some certain currency pairs, making it more difficult to earn profits on trades. Be watchful of such acts because this will hinder you from making profits conveniently.
Additionally, it is also important for Forex brokers whether beginner or expert traders to watch out for those Forex brokers who are in the habit of limiting customer withdrawals because It could be an indicator of the fact that something fishy is going on. The only way to avoid being scammed is to select the right Forex broker. The Forex brokers discussed above Forex.com, Oanda.com, and Td Ameritrade.com are not involved in all these shady practices and which is why they are highly recommended for you to select as your Forex broker. It is worthy of note that “if it looks too good to be real then it is probably not real.”
DEPOSIT AND WITHDRAWAL METHODS OF US FOREX BROKERS
FOREX.COM
DEPOSIT METHODS
It is important to let you know what a Deposit method is to help you understand the deposit methods made use by US Forex brokers. Deposit methods can be defined as a means which is used to deposit money into your Forex trading account. Most times the same method you employed in depositing money into your Forex account is the same method you would use to withdraw your money this actually protects Forex brokers from chargebacks and also from money laundering purposes.
Forex.com allows you to deposit funds into your account through the following channels:
- Credit card
- Bankcard
- Wire transfer
- Neteller
- Skrill
WITHDRAWAL METHODS
Withdrawal methods can be defined as the means used to withdraw your money from your Forex account. Withdrawals must be made in proportion to the deposits depending on the payment method employed initially. Your withdrawals must be transferred to the same bank card, bank account, and e-wallet used for the deposit.
Forex.com allows a minimum withdrawal of $100 and a maximum of $25000 for bank withdrawal and $50000 for debit cards while wire transfers have no restriction on transaction size. For bank transfer withdrawals, the bank transfer may take up to 24 hours, and no fee is charged. Debit card withdrawals are limited to the number of total deposits. Wire withdrawals may be up to the number of total deposits plus any excess funds. Wire transfer may take up to two business with the US and five business days. A $25 fee is charged within the US, $40 for international wires (including Canada). There are no fees for withdrawals greater than $10,000. Processing time only reflects the time it takes FOREX.com to complete the withdrawal during normal business hours. Your bank may take additional time to credit the funds to your account.
It is important to note that the time required for your funds to be transferred to your account will depend on the payment method you chose.
OANDA.COM
DEPOSIT METHODS
Oanda.com has a wide range of deposit methods which include debit and credit cards, bank transfer, wire transfer and PayPal. There is no minimum deposit amount. They accept payments from credit and debit cards provided by MasterCard and Visa. Deposits made using a debit or credit card will typically be visible in the trader’s account within one business day. Funding a PayPal account also takes up to one business day for funds to be visible on your account. As regards bank transfer, they have provided a range of bank transfer options such as Faster Payment, Bacs, CHAPS and SEPA. The processing times for these methods vary. Oanda has no minimum deposit or minimum balance required to open or maintain an OANDA account.
WITHDRAWAL METHODS
Withdrawal of funds from your account can be done via different payment methods. Oanda ensures that funds are returned to the same source that is if you deposit with a credit card you would need to withdraw funds back to that same card. Also, withdrawals are subject to their hierarchy rules which states that if you have deposited funds using multiple methods, you must withdraw the total sum deposited by each means in a set order, i.e. you need to withdraw first using debit cards, then PayPal, and finally bank transfer. The withdrawal fee is low for credit/debit cards and PayPal however, the bank withdrawal fee is high. Oanda also charges a reasonable $10 per month after 2 years of inactivity.
TDAMERITRADE.COM
DEPOSIT METHODS
TdAmeritradeoffers 5 primary ways to fund your account which include:
- Electronic Bank Deposit (ACH)
- Wire Transfer
- Check
- Account Transfer from another Firm
- Physical Stock Certificates
Electronic Bank Deposit is the most popular funding method for Ameritrade. This usually takes about 5 minutes and the minimum deposit is $50 and the maximum deposit is $250000. For Wire transfer, the standard completion time usually takes up to one business day, and no deposit limit as well. As regards the check deposit method, the standard completion time is 1-3 business days, and no deposit limit. You can transfer stocks, options, ETF, and other assets into your TdAmeritrade account from another firm and the standard completion time for this is about a week and no deposit limit. For Physical Stock Certificates, you can deposit physical stock certificates in your name into your TdAmeritrade account and the standard completion time for this is 1 business day with no deposit limit.
WITHDRAWAL METHODS
TDAmeritrade has provided different means for the withdrawal of funds. The first method is an electronic (ACH) service which is free and takes between one-three business days to complete. There is a convenient online form where an external bank can be linked to a TDAmeritrade account. There is a maximum withdrawal amount of $250,000 on this service. There is also a deadline time of 4:30 pm EST, any ACH request submitted after this deadline will be processed on the following business day.
The wire transfer withdrawal method is quicker than the ACH method as it usually takes one business day. There is a $25 charge for the wire and even the receiving institution may charge a separate fee. There is no maximum or minimum limit for this withdrawal process. It also has a deadline time of 3:00 pm, EST. The bank account must have also been added to the Td Ameritrade account before submitting a wire request.
Requesting for a paper check to be mailed to your home address is free. It takes one business day to process this but mailing time does not depend on the broker despite using a first-class mail. The check can be for any amount and the deadline to make a request is 4:30 pm EST.
Td Ameritrade also offers a Visa debit card for free. The card is linked to your account’s core cash position and ATM withdrawals and point-of-sale purchases will take the funds out of the account.
The final withdrawal method is to transfer account positions which can include cash to another brokerage firm. Any Td Ameritrade brokerage account can be moved, in whole or just in part, to another firm via ACAT service. Transferring just one position is free, so one could move cash or a cash equivalent, such as a money market mutual fund and they don’t charge for this.
WHAT ARE THE RESTRICTIONS OF US TRADERS?
Leverage
The Laws governing the retail Forex market ensured that leverage was capped at 50:1 when trading major currency pairs and 20:1 when you are trading exotic pairs. The essence of leverage caps is to help prevent people from losing too much of their investment when working with leverage without sufficient understanding. Amateurs need to understand that leverage can work against them and it can cause them to suffer from huge losses that can exceed their investment.
Hedging
Hedging can be termed as an important trading strategy that helps to reduce the number of losses you can suffer from trading. Hedging usually involves opening two trades on the same currency pair simultaneously. The CFTC however, restricts hedging; this is to prevent traders from imposing an unnecessary load on the Forex brokers. Most traders see it as a restrictive policy but then it is also a measure to safeguard the traders from unnecessary risk.
Taxes
Traders should note that the regulatory body in the USA requires you as a US resident to file your tax returns. You should expect to get taxed when dealing with US-based Forex traders. Many traders see this as a limitation in trading in the USA as most people try to evade payment of taxes but I do encourage traders to deal with US Forex brokers for the safety of their money despite taxes being a limitation for their trading.
COMMON FREQUENTLY ASKED QUESTION ABOUT US FOREX BROKERS.
HOW DO I KNOW IF MY FOREX BROKER IS REGULATED?
National Futures Association (NFA) provides an online verification system called Background Affiliation Status Information Center (BASIC) where the status of U.S.- based Forex brokerage firms can be verified using their NFA ID, firm name, individual name, or pool name. With this method, you can verify if your Forex Broker is regulated by the regulatory body
WHAT IS THE HIGHEST LEVERAGE US BROKERS OFFER?
Leverage is loaning out a certain amount of the money required to invest in currency pair. The maximum leverage US residents can get within the United States is 50:1. This is due to the US regulation that forbids Forex brokers in the US to offer leverage of about 50:1 or 2%. Leverage is limited to 50:1 on major currencies and 20:1 on minor currencies.
WHAT IS FIFO RULE?
FIFO rule means “First in First Out” and it is the rule by the US National Futures Association where the trader will have to close their oldest open positions first in a situation where the trader is dealing in multiple trades of same size and pair.
DO I HAVE TO MAINTAIN FIFO WITH US BROKERS?
Yes, trading with US brokers means you have to maintain the FIFO rules it means you are required to abide by FIFO rules.
WHAT ARE THE TRADING HOURS FOR THE TRADING MARKET?
The Forex market is the largest and most liquid market in the world, representing every global currency with trading conducted 24 hours a day, five days a week, from Monday – Friday.
DOES THE BROKER CHARGE TAXES FROM MY TRADING RESULT?
The broker is not the tax agent and does not charge taxes from the profit received for trading. Traders should note that the regulatory body in the USA requires you as a US resident to file your tax returns. You should expect to get taxed when dealing with US-based Forex traders.
CONCLUSION
Making your preferred choice of selecting a broker in the US can be a herculean task which is why to make it easy by highlighting the best US Forex brokers for you to make your selection based on your trading style and what suit your needs.
It is imperative for you to know that choosing the right broker is proportionate to your success in the Forex trading market. It is also important to choose a regulated broker to guarantee the safety of your money, one that offers tight spread and fees, has a user-friendly trading platform, and also matches your trading style. The essence of this article is to help get you in the right direction but as a trader, you know your trading needs so select your best Forex broker in the US among the ones listed above as these is the best brokers that not only guarantees the safety of your money but also offers you the best services to ensure your eventual goal which is to make a profit.