Things to Consider While Choosing the Best US Forex Brokers
The forex market was opened for retail traders worldwide in the early 2000s. And the US listed itself as one of the earliest entrants in the retail market. Before that, the individuals with high investment and intuitions were allowed to trade forex. Although the USA has the largest stock market, the retail traders quickly shifted to the forex as it offered high leverage compared to the stocks.
As time advances, forex trading in US became strict through strict regulations to protect the market from any illegal activities. As a result, the brokerage choosing option got limited. However, there are still many brokers, and you need to find the best forex broker in USA with best forex trading platforms to start trading.
Being said that, we completed an in-depth analysis on how to choose the best USA brokers.
Is Forex Illegal in the USA?
This is the big question. Due to the unavailability of some popular brokers, retail traders from the USA and outsiders may think that forex trading is illegal in the USA. However, forex trading is legal in the USA. Therefore, as a US trader, forex is not illegal.
US Forex Market Understanding
We all know that the US Dollar is the largest currency. Many commodities such as gold, oil are priced in US Dollars. Besides, the USA has the largest equity market in the world.
These factors make the US Dollar the major currency, which means the dollar is considered the main currency. Most of the major pairs contain the US Dollar, for example, GBP/USD, EUR/USD, etc. However, the pairs without the USD are called the cross, such as CAD/JPY, EUR/JPY etch. In the US forex market, a trader can trade any currencies they want.
Forex Market Regulations in the USA
The US financial market was well regulated before the availability of the retail forex. So, imposing the new regulations for the newly introduced retail forex in the early 2000s was not that tough. The US financially makes sure the trader’s interest and safety first.
That being said, all the US forex brokers need to get regulated by the Commodity Futures and Trading Commission (CFTC) and National Futures Association (NFA).
With the two regulatory authorities, USA brokers are being observed strictly so that now brokers can do any fraudulent activities.
However, you can always check a broker’s regulatory status.
How to Verify the US Regulated Forex Brokers with NFA?
Before starting trading with the US regulated forex brokers, traders can verify the broker if they want, as many scammers are roaming around online and can put you in a trap. Usually, brokers put their license number at the bottom of the web page, or you can ask them for the number. Then verify the number with the NFA website.
How to Choose the Best US Forex Brokers?
Choosing the best forex brokers in USA for beginners or for the experts depends on the trader’s intent and investments. But, overall, you may follow some standards while sorting out the top US forex brokers. Following are some standards you may follow in choosing the best forex broker in USA.
Regulations
The first thing you will have to consider is the regulatory status of the selected US forex brokers you have shortlisted. We have already mentioned how to verify the regulatory condition of a broker.
International Offerings
Forex brokers for us clients should offer global asset classes because if any trader wants to trade any international stock, the international offering is essential. A truly global broker can get you access to a wide range of global instruments.
Account Types
Forex trading in US may offer different account types for the traders. However, the priority of your deposit is necessary to check the account types. Typically, the brokers offer three types of accounts micro, mini and standard. And these two types may have some other sub-account types.
On the other hand, sometimes brokers may not offer all types of accounts. So, you should know the account types. Usually, micro accounts are suitable for beginners, which need a lower deposit, and the other two for the more advanced traders. It would be best for you to know the offered account types according to your experience level and investments.
Trading Platforms
Be aware of the forex trading platforms USA, too, as you may need to trade from anywhere or from any device. So, you should understand the offered trading platform. You may want to know if the broker offers mobile trading or web trading. After knowing these, you should decide for any US regulated forex brokers.
Spreads, Commissions, & Leverage
This is one of the main parts for the regulated forex brokers in USA. Usually, commission, spreads, and leverage decide the profit you may earn.
So, you will have to consider the US forex brokers with lowest spreads as it can get you the low volatile and high liquid assets. At the same time, US forex brokers with high leverage are also necessary. However, you may not get the combination of high leverage and lowest spreads. So, you may have to sacrifice one, but it will not be harmful either.
Minimum Deposit
Most of the top US forex brokers need a minimum deposit for the new traders. However, the minimum deposit is not the same for all brokers, but if you do proper research, you can find the US forex brokers no minimum deposit. Besides, you should also keep in mind that the minimum deposit for the forex trading platforms USA is between $100 and $250.
So, you should not get worried if you don’t find the zero minimum deposit brokers.
Customer Service
You will not know the quality of the specific US forex brokers customer service until you open an account. But you can still acquire some information about the customer service of the best forex brokers for US clients via different forex broker reviews.
These are the things a trader may consider before choosing any regulated forex brokers in USA. Moreover, you may also consider choosing US forex brokers that allow scalping.
Advantages of Choosing Regulated US Forex Brokers
As we have mentioned earlier, US financial authorities are one of the toughest in the world. So, regulated forex brokers in USA should give you the best service. Besides, you will get state-wise discrimination as all the regulated brokers run under the same sort of rules.
Can US Citizens Trade Forex Overseas?
You might not get a large number of best forex brokers for US clients, which may motivate you to look for a broker outside the USA. However, as a US citizen, you cannot trade outside of the country. It is illegal. You can trade with only the CFTC registered brokers.
Conclusion
Regulations are meant to control the brokers and provide the essential safety to the traders. However, a loose regulation can lead to financial misdeeds, and a tight regulation can lead the brokers to impose a financial restriction on the traders.
However, the US regulation is too strict compared to the other parts of the world. For example. US regulation allows 50:1 highest leverage while it is up to 1000:1 in other countries. But best forex broker in USA are providing great service under such tight regulations.
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