Best U.S. Brokers for Forex Investment in 2024

What is a Forex Investment Broker?

A Forex investment broker is a term used to describe many people and platforms that help facilitate Forex trades. However, for the purpose of this article, we are referring to Forex brokers that provide the following:

List of 5 Best Brokers to Invest in Forex in the U.S.

Because of how big the forex market has grown, there are hundreds if not thousands of brokers available today. This often makes it difficult to choose the right broker to partner with. Luckily, we have narrowed down the list to the 5 best brokers in the U.S. Why don’t we quickly take a look at the brokers who have made this list, shall we?

eToro

eToro Review

Open an account

eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs.

This is one of the top international brokers with clients in more than 100 countries and offers a wide range of services for their clients in the U.S. eToro offers the world’s largest social trading platform that allows users to learn from experienced traders. The platform allows you to copy successful traders and use their strategies to make profits free of charge.

On eToro, investors have access to a wide array of U.S. stocks, and ETFs at zero fees. The broker also offers over 50 top currency pairs for trading in the Forex market with tight spreads from 1 pip for the EUR USD pair. Moreover, traders also have access to over 70 cryptocurrencies on eToro. Traders are charged a $10 inactivity fee if their account is dormant for 12 months.

eToro is licensed and regulated by several reputable bodies. In the U.S. the broker is regulated by the SEC and FINRA. The company is also licensed and regulated in the UK by the FCA, in Cyprus by CySEC, and Australia by the ASIC. This offers you absolute peace of mind that your funds are safe and the broker has your best interest at heart.

The platform is intuitive and easy to use which makes it a great choice for beginner and experienced traders alike. Users can deposit and withdraw funds using a variety of methods ranging from bank transfers to debit and credit cards, to e-wallets (PayPal, Skrill, Neteller, etc), and even online banking. This makes it convenient for their users all over the globe. However, the broker charges a $5 commission on withdrawals.

Interactive Brokers

IBKR Review

Interactive Brokers is a renowned forex investment company and has been operational since 1977. The broker uses an integrated approach to work, ensuring that their users have the widest range of services from opening an account to withdrawing funds. The platform is optimized for use on personal computers and mobile devices.

Interactive Brokers offer traders over 300 trading instruments, including stocks, commodity assets, currency pairs, and precious metals. This allows users to implement a wide variety of strategies to maximize the chances of successful trades. The company provides high-quality and effective Forex services, and at the same time is constantly working to improve its existing systems.

The broker is regulated and licensed by multiple reputable agencies around the globe. In the U.S. Interactive Brokers is regulated by the SEC and FINRA. The firm is also regulated by the UK FCA, and the Australian AFSL, among other top regulatory agencies in multiple territories. Traders can rest assured that their capital is protected.

The brokerage firm offers average and fixed spreads, but they have no restrictions on the amount of deposit and withdrawal. However, they charge commissions that vary depending on the specific trading instrument. They also charge commissions for withdrawals made more than once every month. Clients can deposit and withdraw funds using a wide range of methods with fast execution.

Whether you are a seasoned trader or a beginner, you’ll find that Interactive Brokers is a great trading platform.

OANDA

OANDA Review

Open an account

Your capital is at risk.

Olsen and Associates, also known as OANDA is a U.S. registered Forex broker with over two decades of experience in the market. Founded in 1996, the broker has numerous clients all over the globe. They also have multiple awards under their belt, which makes them one of the top brokers in the U.S. and even worldwide.

The broker is licensed and regulated by various reputable regulatory authorities, with the UK FCA as the main regulator. OANDA’s platform offers exceptional execution with sophisticated trading tools. They also have innovative charting platforms with a wide range of revolutionary indicators and drawing tools powered by TradingView.

Traders only need a $1 minimum deposit to get started on OANDA. You also have access to a wide variety of trading instruments ranging from currency pairs, CFDs, options, bonds, indices, futures, and even precious metals. Traders also have access to copy trading accounts, where they can replicate trading strategies from successful traders.

OANDA offers competitive fees and commissions with a minimum spread of 0.1 pips for the EURUSD pair. No commission is charged on withdrawal, except if withdrawing to a credit card more than once a month where a commission of $15 is charged. The platform is suitable for both beginner and expert traders.

Forex.com

FOREX.com Review

Gain Capital Holdings is the parent company of Forex.com. The broker has been in the industry for more than a decade and is no new kid on the block. They are renowned for satisfying customer obligations in a responsible manner. The broker has more than 4500 financial instruments available to customers. These range from commodities, cryptocurrencies, CFDs, Forex, and more. The platform has more than 90 currency pairs for clients who want to trade Forex.

Forex.com is licensed and regulated by multiple reputable bodies around the world. The broker is primarily regulated by the UK FCA. In the US, it is regulated by the CFTC, the FSA in Japan, the IIROC in Canada, ASIC in Australia, and CIMA in the Cayman Islands. The strict regulation means that investors are assured of their capital protection in case of anything.

Forex.com has a minimum EURUSD spread pegged at 1 pip and the average lies somewhere around 1.3 pips. If you're an active trader with high-frequency operations, then Forex.com is a great option. They have a minimum deposit of $1,000 which is often deemed high, especially by beginner traders. The broker also charges fees for withdrawals. A fee of $15 is charged after 12 months of inactivity on your Forex.com account.

IG Markets

IG Markets Review

IG Markets is a top brokerage firm that has been in operation since 1974. The company is actively investing in the improvement and development of new technologies and services, especially for seasoned traders without any extra charges. Professionals can trade with any leverage on IG Markets, and with a margin reduced by 10%.

The company offers a wide range of trading instruments like Stocks, indices, CFDs, cryptocurrencies, and Forex currency pairs. In addition, they offer customers access to other markets such as commodities, bonds, options, IPOs, sectors, and ETPs. They also have proven risk-management mechanisms that help traders minimize losses.

IG Markets is licensed by the Bermuda Monetary Authority and the firm respects the principles of transparency and confidentiality, as required by its regulators. They also don’t have a minimum deposit, which means that there are minimal entry barriers for beginner traders. The broker has reasonably low and fixed spreads, averaging around 0.6 pips.

Traders can fund their accounts and withdraw using a variety of methods. It is important to note that IG Markets charges a flat commission of 0.5% on all transactions, which is fairly affordable. Regardless of whether you are an expert trader or a beginner, IG Markets is a great broker with low entry thresholds, various bonuses, and high-quality analytical material, among other numerous benefits.

How to Choose a Forex Investment Company in the U.S.

Choosing a Forex broker should never be a hasty process. Take your time and conduct some due diligence before settling for a broker. There are a couple of things that you need to consider when choosing a Forex Investment Company in the U.S. such as:

1. Trading Conditions

Each broker has different account offerings and you must take into consideration the various trading conditions before picking a broker. The key areas for consideration are leverage and margin, commission and spread, initial deposit requirements, and ease of deposit and withdrawal.

2. Forex Investment Options

When choosing a broker, you don't want one that would limit you, but rather one that will allow you to spread your wings and diversify your portfolio as much as possible. Ensure that they offer options with high liquidity.

3. Regulation in the U.S.

The most important thing when choosing a broker is to ensure that they are regulated and compliant with regulatory laws in the U.S. You can go to the National Futures Association (NFA) website to verify the broker's compliance. You can also find complaints or disciplinary actions previously taken against the broker before you choose. The last thing you want is for your financial information and hard-earned cash to end up with a group of scammers.

Main Types of Forex Investments in the U.S.

When it comes to Forex investments, there are lots of options. Here is a closer look at three of the top options:

Copy trading

For those who are yet unfamiliar, copy trading is a form of investment that includes making trades that copy the trades of other traders. Many investors enjoy this type of trading because it allows them to begin trading with minimal research. Rather, copy trading simply requires investors to find a lucrative trading platform that is trustworthy and of course, offers copy trading. Luckily, many platforms offer a way to search for the most experienced traders to assess their methods and progress to mimic their results.

Once you have joined the platform and enrolled in copy trading, you can essentially leave the system on autopilot and allow the platform to make trades for you. Specifically, when copy trading, the traders you are following make trades, and, in turn, the copy trading platform makes the same trades on your account automatically for as long as you are subscribed to the copy trading feature.

When a trader you follow opens a trade, the copy trading platform automatically opens the same trade on your account. Moreover, you also have the freedom to choose how much money you want to allocate to a trader and how much risk you are willing to assume per trade.

PAMM

On the other hand, PAMM is known as both the Percentage Allocation Management Module and Percentage Allocation Money Management, a type of pooled money forex trading. Using this method of investing allows investors to allocate their money however they choose to the qualified traders/money managers they choose. The traders/managers can manage various Forex trading accounts with their capital and pooled money, with the ultimate goal of generating profits.

Stocks and ETFs

Lastly, stocks are also known as equity, which is a security used to represent the ownership of a fraction of corporations traded on the stock exchange. These fractions or units are formerly called shares. Purchasing shares of companies makes investors entitled to a fraction of the business's profits and assets, which are equal to the value of the stock owned by each individual.

On the other hand, ETFs or exchange-traded funds are types of pooled investment securities that operate in a similar manner as mutual funds. These funds typically involve tracking a particular sector, index, commodity, or other asset. However, unlike mutual funds, ETFs may be sold or purchased on a stock exchange in the same manner as you would trade a regular stock. Also, ETFs can be structured to track everything from the prices of an individual commodity to a large and varied group of securities; they can even be structured to track identifiable investment approaches.

How to Invest in Forex in the U.S.

If you want to invest in Forex in the U.S. then you need to do a couple of things before you get started.

Step 1. Learn everything there is about Forex trading. Don’t just blindly get into Forex trading, understand the risks involved and plan how to execute strategies for profitable returns. Going in without ample knowledge could lead to immense losses.

Step 2. Open a Brokerage Account. To trade Forex, you'll need to have a brokerage account. Ensure that you first conduct thorough research before settling on a specific broker. You'll then need to deposit a specified amount to activate your account and get started.

Step 3. Place a Trade on a Forex Currency Pair. Once you have an account, you can place a trade, either a buy or sell order on your preferred currency pair. However, ensure that you conduct prior market research and never trade based on your gut feeling.

Step 4. Keep Tabs on Your Investment. The Forex market shifts quickly and often. Ensure that you keep a close eye on your investment to ensure that you make profits and minimize losses. You can set stop loss and take profit orders to help you.

Do I Pay Forex Taxes in the U.S.?

Yes, you do need to pay taxes on earnings that your forex trading activities accumulate. Futures contracts and forex options are both classified as IRC Section 1256 contracts. There is a consideration of 60/40 tax that is payable on earnings you make through your forex activities. A 40% of the gains and losses you make through your trading account are considered to be short-term taxable figures, while the remaining 60% are long-term taxable figures.