What are the cheapest Forex brokers
One of the advantages of the highly advanced technological age is the increasing popularity of cost-efficient approaches both by customers and businesses. The customers are trying to cut on their expenditures in every way they can, whereas businesses are trying to minimize their cost of production. Both of them occur thanks to sophisticated digital software, platforms, devices, machines, and so on. The digitalized world allowed us to integrate numerous activities in our lives that would be unthinkable several decades ago.
Trading was more like a hobby for an elite group of the society back in the 20th century United States. You would not be able to join the group of traders but would rather have to wait to be invited. And even then, the group could simply not vote or not approve your acceptance on board. Nowadays, no one can keep you from becoming a trader. You do not need to pay a membership fee for the status of the trader. And moreover, you do not even have to leave the house to trade Forex. One more thing that technology brought with it in the early 21st century is the possibility to minimize the costs associated with trading.
Thanks to the highly advanced trading platforms and probably the incredible competition on the market, more and more Forex brokers began to reduce the costs associated with trading for their customers. Therefore, nowadays the concept of cheap Forex trading is quite common and works well in almost every region. The article below will examine the best low-cost Forex brokers, how to find them and what are the main features of cost-efficient trading in the Forex industry.
Best Cheapest Forex Brokers
In order to find a cheap brokerage firm a trader would have to go through hundreds of brokers and compare their costs on services, various features and read multiple reviews. It is obviously a very time-consuming task and not all traders are ready to dedicate their precious time to it. Moreover, some of the brokers operate with hidden fees which actually appear when the client tries to withdraw money or when they place the trades and close the positions. Therefore, one would have to check the professional reviews that analyze the broker’s features in-depth. We prepared the list of the cheapest and the most reliable brokers in the Forex market below.
AvaTrade
Starting Capital
$100
Financial License
FSA, FFAJ, CySEC, CBI, BVI FSC, FSCA, FSRA
Promotion
Financial Leverage
1:400
Established
2006
Trading Software
MT4, MT5, WebTrader, AvaTradeGO
XM
Starting Capital
$5
Financial License
CySEC, FCA, ASIC
Promotion
$30, 50%+20%
Financial Leverage
1:1000
Established
2009
Trading Software
MT4, MT5, WebTrader
Plus500
Starting Capital
ZAR 1,500
Financial License
FCA, CySEC, ASIC, FSCA, FMA
Promotion
25%
Financial Leverage
1:300
Established
2008
Trading Software
MT4
RoboForex
Starting Capital
€/$ 10
Financial License
FSC
Promotion
30%
Financial Leverage
1:2000
Established
2009
Trading Software
MT4, MT5
CM Trading
Starting Capital
250$
Financial License
FSCA
Promotion
Financial Leverage
1:200
Established
2012
Trading Software
MT4, Sirix WebTrader, Copykat
Exness
Starting Capital
$10
Financial License
FCA, CySEC, FsA, FSCA
Promotion
10%
Financial Leverage
1:2000
Established
2008
Trading Software
MT4
IQ Options
Starting Capital
$10
Financial License
CySEC
Promotion
Not Available
Financial Leverage
1:30
Established
2013
Trading Software
WebTrader
EagleFX
Starting Capital
$10
Financial License
N/A
Promotion
N/A
Financial Leverage
1:500
Established
2019
Trading Software
MT4
OspreyFX
Starting Capital
$10
Financial License
N/A
Promotion
N/A
Financial Leverage
1:500
Established
2019
Trading Software
MT4
AMarkets
Starting Capital
$/€ 100
Financial License
FSA
Promotion
15%
Financial Leverage
1:1000
Established
2007
Trading Software
MT4
Forex.com
Starting Capital
$50
Financial License
FCA
Promotion
Not Available
Financial Leverage
1:200
Established
1999
Trading Software
MT4, WebTrader, custom
FXRoad
Starting Capital
250 EUR
Financial License
FSA, Seychelles
Promotion
None
Financial Leverage
1:200
Established
Unknown
Trading Software
FXRoad web and mobile platform
HotForex
Starting Capital
5 USD
Financial License
FCA, FSA, DFSA, FSCA
Promotion
100%, 30%, 100%
Financial Leverage
1:1000
Established
2010
Trading Software
MT4, MT5, WebTrader
ForexMart
Starting Capital
15 USD
Financial License
CySEC
Promotion
30%
Financial Leverage
1:500
Established
2015
Trading Software
MT4, WebTrader
Tickmill
Starting Capital
100 USD
Financial License
FSA, FCA, CySEC, FSCA, FSALM
Promotion
30% Welcome Bonus
Financial Leverage
1:500
Established
2014
Trading Software
MT4, WebTrader
FXOpen
Starting Capital
1 USD
Financial License
ASIC, FCA
Promotion
10 USD
Financial Leverage
1:500
Established
2005
Trading Software
MT4, MT5, WebTrader, TickTrader
How to trade Forex with little money
Understanding the Forex market is the key to knowing where you can save money as a trader. For instance, if you are already familiar with the prices of the common trading assets, such as popular currency pairs, you will detect the unreasonable costs with the brokers and go for the cheaper ones. Also, knowing what are the costs of trading Forex in general will help you decide which is the most budget-friendly trading strategy. The main costs in the Forex industry are associated with individual Forex brokers. They can charge you for the commission rate, for the spreads on assets, for leaving the positions for more than 24 hours (or swap fees), for withdrawals, and so on. Below is the list for the cost of trading Forex:
- Commission fees
- Spreads
- Rollover fees
- Minimum deposit requirements
- Withdrawal fees
- Minimum equity requirements
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Commissions
Commissions are the primary business models that most of the brokers incorporated in the past. Today, on the other hand, as the competition among the brokers is growing daily, the brokerage firms drifted away from the commissions. However, depending on the trading asset or specific trading account type, some of the brokers still charge the commission fees. The commission fees can be as low as 0.00025 USD per trade or the percentage per side for Forex products. The most frequent commissionable assets are Cryptocurrencies and Precious Metals. Usually, currency pairs, stocks, and indices might come commission-free. Also, most of the premium accounts will come with commission charges, as these account types offer extremely tight spreads on most of the financial instruments.
Spreads
The broker has to somehow compensate for the absence of the commissions. We all know that firms need to make money. Therefore, without commissions, brokers can directly generate revenue either through spreads, or administrative fees. The administrative costs are very rare across the most popular Forex brokers. However, the spread is something that each broker has. The spread has to be convenient for the trader. If it is higher than the market average the trader will not invest with the broker. Usually, spreads on Forex can vary from 1 to 3 pips on popular Forex assets such as EUR/USD currency pair. If the spread is anything higher than that it is strongly recommended to avoid the broker. However, the spreads below 1 pip are the lucky catch. Standard accounts usually have less flexible spreads compared to Premium ones.
Rollover fees
If you are not a day trader, meaning that you do not open and close the trades on the same trading day, then you are leaving your positions open for more than 24 hours. Such positions are subject to swap fees, or rollover fees that apply to overnight open positions. The swap fees vary from one brokerage to another and usually represent a very small fraction of the total trading cost. However, some of the account types are exempt from the overnight charges. For example, for the Muslim traders, most of the brokers provide Islamic accounts. According to Sharia law, interest charges are strongly prohibited. Therefore, almost every Islamic account will come without rollover fees, however, these accounts might still be charged with administrative fees to compensate for the absence of the swaps.
Minimum deposit requirement
How do you open a real trading account? you register and deposit the minimum amount required by the broker. In contrast to the common misconception that you need hundreds of dollars to start trading, most of the brokers in fact allow you to start with few dollars. Even with the expensive brokerage firms, if the brokers provide high-quality services, they offer budget accounts, such as Micro or Cents accounts which might let you start trading with the minimum deposit requirement of 1 US dollar, 5 US dollars, and so on. If you are new to the Forex industry and are just starting to get to know the specifics of the market, do not choose the broker which asks you for a minimum deposit of more than 100 US dollars. Or at least, go for the demo account in the first place, check if you enjoy the trading environment and later you can open a real trading account with the deposit.
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Withdrawal Fees
Usually, the cheap Forex broker will never charge you for withdrawals. The same applies to leading brokerage firms worldwide. However, these brokers allow various payment methods to be used on their platforms. Therefore, depending on the payment solution that you choose, the payment service provider may charge you instead of the broker. In most cases, the payments processed through Mastercard/Visa or bank wire come without withdrawal fees. However, the time for the payment to be processed might stretch over few working days. The instant payment methods on the other hand, such as Skrill and Neteller might charge a fixed amount or the percentage of the withdrawal amount but will be instantly credited to your account.
Minimum Equity Requirements
Minimum equity requirements are much rarer than the rest of the cost types. They apply to the highest tier account types, such as VIP, Premium, or Professional, or to the day trading accounts. The top tier account types usually will ask for their clients to hold a certain amount of balance available on their trading account while processing the trades. However, some brokers also operate the premium platforms and account types without any trading capital requirement. On the other hand, day traders might be required by the law to have minimum equity available on their accounts depending on their countries or regions of residence. For instance, in the United States, day traders are asked to have at least 25,000 US dollars as their minimum equity in order to keep day trading.
Can you trade Forex with 1 USD or for free?
Surprisingly, trading Forex with 1 US dollar or even without any money is absolutely possible. However, the trader will really need to find the appropriate broker which provides such an opportunity. There is a number of ways how traders can actually get started in Forex trading with minimum to no cost at all:
- No deposit and welcome bonuses
- Demo trading contests
- Trading courses or demo accounts
Forex Bonuses
The promotional campaigns are often used as an encouragement for the newcomers in the Forex industry by the Forex brokers. Even though not all brokers are allowed to provide bonus programs due to regulatory restrictions, those who offer them are designing flexible conditions for claiming the bonus. No deposit bonuses or welcome bonuses are usually the most common programs among Forex brokers. These types of bonuses provide deposit-free starting capital to the traders. Brokers will often credit the money, which can be anything from 1 US dollars up to 30 US dollars. The traders can then use this money to trade and in case they generate the profits from trading with the bonus amount, they can withdraw their earnings. Otherwise, bonus money is non-withdrawable and is for trading purposes only.
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Trading Contests
The brokers hold trading championships in various regions or trading contests for new registering clients and the existing ones. These contests are based on the performance of the participants. Meaning that the trading results after the term ends will decide the results. Those participants with the most profit generated with the proportional calculation of the total deposit made will receive cash prizes or other types of rewards, such as premium memberships, gadgets, and so on. Some of the brokers also design these trading contests on demo accounts. Demo trading contests mean that the traders will usually join the contest without depositing any amount and they will be trading with the virtual money credited by the broker to their trading accounts.
Trading Courses and Demo Accounts
Most Forex brokers are determined to educate their traders in numerous ways. The educational materials are extremely helpful for beginner and intermediate traders. They can be accessed without any additional costs and can include numerous topics including introductions to the Forex market, trading strategies, tutorials on how to use the trading software and broker platforms, and so on. Afterward, traders can test out their expertise and trading skills on the demo accounts provided by the brokers. Usually, the demo accounts will be applicable to most of the trading account types that the brokerage firm offers. On a demo account, traders actually process their trades with virtual money without any risks or financial losses.
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