Home of Forex trading

We know that choosing a forex broker within the USA are often challenging. you would like to seek out a reputable brand that meets all regulatory requirements the us imposes, but which also offers value for money. the great news is we’ve done all the diligence for you.

Our precise methodology allows us to bring you the simplest US forex brokers with ease. Our team evaluates each broker against 200 different criteria points in 10 key areas. This includes everything from licenses to customer support options, trading fees to mobile compatibility.

Each category is weighted differently to make sure that our final score reflects the foremost important things to you as an American trader. for instance , as licensing and regulation may be a critical category, it makes up 18% of the ultimate score. Paired with reputation, which is additionally given a better weighting than other areas, this makes it impossible for unlicensed, rogue US forex brokers to form our list.

Our forex broker review team also checks for various features which appeal specifically to US traders, such as:

Regulation – A broker working with US citizens must be registered with the CTFC and NFA, albeit the firm isn’t located within the us . We check every broker to form sure they need these licenses.
Proprietary trading platforms – Some US regulations, like anti-hedging laws and therefore the ‘first in, first out’ rule, make some trading platforms inappropriate for US traders. We check to form sure that the firm offers a user-friendly, high-quality alternative.
Localized payment methods – A deposit or withdrawal made via an American payment method are going to be both faster and cheaper for you. All of our recommended USA forex brokers accept convenient payment methods starting from Amex credit/debit cards to PayPal.
Attractive spreads on USD currency pairs – We understand that you simply could also be easier trading what’s familiar, which is why we glance for brokers who offer good spreads on USD currency pairs. This not only includes major pairs but exotic pairs that are important to the US economy, like USD/MXN and USD/CNY, too.
US stocks, indices, and more – apart from USD currency pairs, there’s an entire range of other assets that are particularly interesting to American traders. This includes stocks from big US-based companies, like Apple and Walmart, US indices, like Dow 30 and NASDAQ 100, and commodities like petroleum and soybeans.
How is that the US forex market regulated?
As a forex trader within the USA, you’re protected by two different regulatory bodies. All American forex brokers must have a futures commission merchant (FCM) license, also as a retail exchange dealer (RFED) license. These licenses are issued by the Commodity Futures Trading Commission (CFTC). Licensed brokers must even be members of the National Futures Association.

The CTFC
The CFTC is an independent US regulatory agency that regulates the financial markets for futures contracts, which include commodities and swaps. Founded in 1974, the CFTC’s mission is to make sure a competitive and transparent market that’s financially stable. The commission protects consumers and therefore the US economy’s integrity by mitigating a good range of risks.

The NFA
The NFA is an independent regulatory agency that specifically targets the US futures and derivatives markets. The NFA ensures the derivatives markets’ integrity while protecting investors and enforcing regulatory obligations on members.

The NFA also deals with registration, compliance, and arbitration. The association also fights against abuse and fraud within the futures markets by imposing registration conditions, compliance regulations, rigorous enforcement, and constant monitoring of the market.

As any forex brokers wishing to serve US traders must be registered with these two organizations, albeit the firm isn’t physically located within the us , you’ll rest assured that each one of our recommended USA forex brokers are completely safe and secure.

The Dodd-Frank Act and forex
All USA forex brokers also are subject to the Dodd-Frank Act Wall Street Reform and Consumer Protection Act (2010). This law was introduced to avoid another financial crisis just like the one that occurred in 2007-2008.

The Dodd-Frank Act protects each side of the industry, impacting how forex brokers can operate within the USA also as how you’ll trade.

Since the act was introduced, several key provisions are developed. Below you’ll learn more about each rule and therefore the purpose it serves.

Provisions for forex brokers
USA forex brokers must meet minimum capital requirements
Forex brokers within the USA must have a minimum capital of $20 million, plus 5% of any amount exceeding liabilities of $10 million to forex clients. This ensures scams won’t happen and limits the prospect of a broker going bust. However, it also makes it difficult for startup firms to exist and limits competition, which could become a problem .
Forex brokers must collect security deposits
On short forex options, the notional value of the transaction along side the premium must be kept as a margin . On long forex options, the entire option premium is required.
Brokers must hold money in specific accounts
The NFA also states that any money the forex broker owes US forex traders should be kept only in qualifying organizations within the us or countries deemed money centers.
Provisions for forex traders
Traders are subject to maximum leverage limits
As an American forex trader, you’ll be restricted to a maximum leverage of 50:1 for major currency pairs and 20:1 on minor currency pairs.
Traders must observe the FIFO rule
The first in, first out (FIFO) rule states that a trader must close their oldest position first once they hold multiple positions within the same asset. for instance , let’s say you open one long position of 10,000 units of EUR/USD at 1.0810 then another two at 1.0820 and at 1.0830 respectively. If you notice the EUR/USD drop to 1.0825, you would possibly want to shut out the lot you opened at 1.0830 to attenuate losses.
According to the FIFO rule, you can’t. you’ll only close the position you opened at 1.0810 because it had been the primary one you opened. This also applies to positions that differ in size.
It should be noted that not most are subject to the protections of those regulations. Customers are defined as most small businesses and individuals with assets that don’t exceed $10 million. a private with a better net worth won’t be covered.