When To Trade. Despite being able to trade 24 hours a day, 5 days a week, you shouldn't (Forex trading is not quite 24.7). You should only trade a Forex pair when it's active, and when you've got enough volume. Trading Forex at weekends will see small volume. Take GBP/USD for example, there are specific hours where you have enough volatility to create profits that are likely to negate the bid price spread and commission costs. The Forex market is alive 24 hours a day because there's always a global market open somewhere, as a result of differing time zones. Despite that, not every market actively trades all currencies. As a result, different Forex pairs are actively traded at differing times of the day. For example, when the UK and Europe are opening, pairs consisting of the euro and pound are alight with trading activity. However, when New York (the U.S and Canada) are at their desks, pairs that involve the US dollar and Canadian dollar are actively traded. So, if you were trading EUR/USD pairs, you'll find the most trading activity when New York and London are open, or Tokyo for JPY and Sydney for the AUD. Utilise Forex daily charts to see major market hours in your own timezone. The below image highlights opening hours of markets (and end of session times) for London, New York, Sydney and Tokyo. Crossover periods represent the sessions with most activity, volume and price action. Forex Trading Sessions. Each session has a unique 'feel': Asian Session: Made up of the Asian markets, opening in New Zealand and Australia and moving west. This session generates lower volume and smaller ranges. The JPY, NZD and AUD are popular markets and news events can move prices significantly. The London ('European' Session): Actually kicks off in Frankfurt, and London an hour later. The UK opening sees larger volume in the Forex markets, plus volatility will peak during this session. European institutions, banks and account managers will be active and macro-economic data is released. The New York (US) Session: This opens at 9.30am New York time, but US fundamental data can be released at 8.30am. This can create early volume before the 'official' 9:30 opening. The London and New York 'crossover' sees the most volatility and liquidity. Key fundamental data is released, financial institutions trigger Forex contracts and 'smart money' is involved.
One Cancels Other. A One Cancels the Other (OCO) Order is a combination of a Stop and Limit order, but if one is triggered, the other order is removed or cancelled. It is an important strategic trade type. Cryptocurrency. Leading Cryptocurrencies like Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC) and Ripple (XRP) are often traded as a currency pair against the US dollar. These can be traded just as other FX pairs. Their exchange values versus each other are also sometimes offered, e.g. BTC/ETH or ETH/LTC etc. Charts. Charts will play an essential role in your technical analysis. So you will need to find a time frame that allows you to easily identify opportunities. In fact, the right chart will paint a picture of where the price might be heading going forwards. For example, day trading Forex with intraday candlestick price patterns is particularly popular. See our charts page for further guidance. Strategy. Any effective Forex strategy will need to focus on two key factors, liquidity and volatility. These are two of the best indicators for any Forex trader, but the short-term trader is particularly reliant on them. Intraday trading with Forex is very specific. While your average long-term futures trader may be able to afford to throw in 12 pips hedging (smallest price movement is usually 1%) here and cut 12 there, a day trader simply cannot. This is because those 12 pips could be the entirety of the anticipated profit on the trade. Precision in Forex comes from the trader, but liquidity is also important. Illiquidity will mean the order won't close at the ideal price, regardless of how good a trader you are. As a result, this limits day traders to specific trading instruments and times. Volatility is the size of markets movements. So, firm volatility for a trader will reduce the selection of instruments to the currency pairs, dependant on the sessions. As volatility is session dependent, it also brings us to an important component outlined below - when to trade.
Forex Orders. There are a range of Forex orders. Some common, others less so. Using the correct one can be crucial. The two main types of Forex orders are: 1. Instant order or Market order. 2. Pending orders. Instant Order / Market Orders. These are executed immediately at market prices. A Buy is an instruction to 'go long' or profit from rising markets. A Sell means opening a short position with an expectation of falling values. Pending Orders. A Stop loss is a preset level where the trader would like the trade closed (stopped out) if the price moves against them. It is an important risk management tool. It instructs the broker to close the trade at that level. A guaranteed stop means the firm guarantee to close the trade at the requested price. A stop loss that is not guaranteed may 'slip' in volatile market conditions, and a trade closed, close to, but not on, the stop level. The shock of the Swiss Franc (CHF) being 'unpegged' was one such event. A Trailing Stop requests that the broker moves the stop loss level alongside the actual price - but only in one direction. So a long position will move the stop up in a rising market, but it will stay where it is if prices are falling. It allows traders to reduce potential losses in good times, and 'lock in' profits, whilst retaining a safety net. A take profit or Limit order is a point at which the trader wants the trade closed, in profit. It is a good tool for discipline (closing trades as planned) and key for certain strategies. It is also very useful for traders who cannot watch and monitor trades all the time.
Which Currencies Should You Trade? Investors should stick to the major and minor pairs in the beginning. This is because it will be easier to find trades, and lower spreads, making scalping viable. Exotic pairs, however, have much more illiquidity and higher spreads. In fact, because they are riskier, you can make serious cash with exotic pairs, just be prepared to lose big in a single session too. How Is Forex Traded? The logistics of forex day trading are almost identical to every other market. However, there is one crucial difference worth highlighting. When you're day trading in forex you're buying a currency, while selling another at the same time. Hence that is why the currencies are marketed in pairs. So, the exchange rate pricing you see from your forex trading account represents the purchase price between the two currencies. For example - the rate you find for GBP/USD represents the number of US dollars one British pound will buy you. So, if you have reason to believe the pound will increase in value versus the US dollar, you'd look to purchase pounds with US dollars. However, if the exchange rate climbs, you'd sell your pounds back and make a profit. Likewise with Euros, Yen etc. Contracts. Forex contracts come in a range of types: Spot forex contracts The conventional contract. Delivery and settlement is immediate. Futures forex contracts Delivery and settlement takes place on a future date. Prices are agreed directly, but the actual exchange is in the future. Currency swaps Where two parties can 'swap' currency, often in the form of loans, or loan payments in differing currencies. Options forex contracts An option gives a trader, the option (but not the obligation) to exchange currencies at a certain price on a date in the future.
Forex Broker Reviews. Use this table with reviews of the top forex brokers to compare all the FX brokers we have ever reviewed. Note that some of these forex brokers might not accept trading accounts being opened from your country. If we can determine that a broker would not accept your location, it is marked in grey in the table. Forex Broker Reviews Broker Demo Min Dep. MT4 Bonus 24Option Yes $250 Yes No Avatrade Yes $100 Yes Yes AxiTrader Yes 0 $/€/£ Yes No Ayondo Yes £1 Yes No BDSwiss Yes 100 $/€/£ No No Binary.com Yes $5 Yes No Capital.com Yes £/$/€100 No No CityIndex Yes £/$100 Yes Yes CMC Markets Yes £ 0 Yes No eToro Yes $200 Yes No ETX Capital Yes £250 Yes No Finq.com Yes $100 Yes Yes Forex.com Yes $50 Yes No Fusion Markets Yes No Minimum Yes No FXCM Yes £300 Yes No FXPro Yes $100 Yes No IC Markets Yes $200 Yes No IG Group Yes £250 Yes No Interactive Brokers Yes $10000 No No Invest.com Yes £0 Yes Yes Investous Yes $250 Yes No IQ Option Yes $10 No No LCG Yes 0 $/€/£ Yes No Markets.com Yes $100 Yes No Nadex Yes $250 No No NinjaTrader Yes $50 Yes No NordFX Yes $10 Yes No Oanda Yes $0 Yes No Pepperstone Yes £100 / $200 Yes No Plus500 Yes $100 No Yes Saxo Bank Yes 0 $/€/£ Yes No Skilling.com Yes 100 £/€/$ or 1000 NOK, SEK No No Spreadex No $1 No No TD Ameritrade Yes None No Yes Trading212 Yes €/£/$100 No No UFX Yes $100 Yes No VantageFX Yes $200 Yes Yes Videforex Yes $250 No Yes XM Yes 5 $/€/£ Yes Yes XTB Yes $250 Yes No ZuluTrade Yes $1 to $300 (Broker choice dependent) Yes No. Forex Regulation. Regulation should be an important consideration. Whether the regulator is inside, or outside, of Europe is going to have serious consequences on your trading. ESMA (the European Securities and Markets Authority) have imposed strict rules on forex firms regulated in Europe. This includes the following regulators: CySec (Cyprus Securities and Exchange Commission) FCA (Financial Conduct Authority) BaFin - (Bundesanstalt für Finanzdienstleistungsaufsicht) Swiss Financial Market Supervisory Authority (Switzerland) ESMA have jurisdiction over all regulators within the EEA. The rules include caps or limits on leverage, and varies on financial products. Forex leverage is capped at 1:30 (Or x30). Outside of Europe, leverage can reach 1:500 (x500). Traders in Europe can apply for Professional status. This removes their regulatory protection, and allows brokers to offer higher levels of leverage (among other things). Outside of Europe, the largest regulators are: SEC - Securities and Exchange Commission (US) CFTC - Commodity Futures Trading Commission (US) CSA - Canadian Securities Administration ASIC - Australian Securities and Investments Commission. These cover the bulk of countries outside Europe. Forex brokers catering for India, Hong Kong, Qatar etc are likely to have regulation in one of the above, rather than every country they support. Some brands are regulated across the globe (one is even regulated in 5 continents). Some bodies issue licenses, and others have a register of legal firms. So to reiterate, an ASIC forex broker can offer higher leverage to a trader in Europe.
MetaTrader 4 or 5. Integration with popular software packages like Metatrader 4 or 5 (MT4 or MT5) might be crucial for some traders. Many brands offer automated trading or integration into related software, but if you are going to rely on it, you need to make sure. Bonus. From cashback, to a no deposit bonus, free trades or deposit matches, brokers used to offer loads of promotions. Regulatory pressure has changed all that. Bonuses are now few and far between. Our directory will list them where offered, but they should rarely be a deciding factor in your forex trading choice. Also always check the terms and conditions and make sure they will not cause you to over-trade. Execution Speed. Desktop platforms will normally deliver excellent speed of execution for trades. But mobile apps may not. While this will not always be the fault of the broker or application itself, it is worth testing. Scams. Our reviews have already filtered out the scams, but if you are considering a different brand, avoid getting caught out with these checks; Were you 'cold called'? Reputable firms will not call you out of the blue (This includes emails, or facebook or Instagram channels) Are they offering unrealistic profits? Just stop and consider for a minute - if they could make the money they are claiming, why are they cold calling or advertising on social media? Are they offering to trade on your behalf or use their own managed or automated trades? Do not give anyone else control of your money. If you have any doubts, simply move on. There are plenty of legitimate, legal brokers. With all these comparison factors covered in our reviews, you can now shortlist your top forex brokers, take each for a test drive with a demo account, and select the best one for you. We have ranked brokers based on our own opinion and offered ratings in our tables, but only you can award '5 stars' to your favourite! Read who won the DayTrading.com 'Best Forex Broker 2019' on the Awards page.
Payment Methods. Deposit method options at a certain forex broker might interest you. Do you want to use Paypal, Skrill or Neteller? Are you happy using credit or debit cards knowing this is where withdrawals will be paid too? Some forex brokers now accept deposits in Bitcoin or a range of other crypto's too. Security. Most brands will follow regulatory demands to separate client and company funds, and offer certain levels of user data security. Some brands might give you more confidence than others, and this is often linked to the regulator or where the brand is licensed. A worthy consideration. Demo Accounts. Try before you buy. Most credible brokers are willing to let you see their platforms risk free. Trading on a demo account or simulator is a great way to test strategy, back test or learn a platforms nuances. Try as many as you need to before making a choice - and remember having multiple accounts is fine (even recommended). Account Types. From cash, margin or PAMM accounts, to Bronze, Silver, Gold and VIP levels, account types can vary. The differences can be reflected in costs, reduced spreads, access to Level II data, settlement or different leverage. Micro accounts might provide lower trade size limits for example. Retail and professional accounts will be treated very differently by both brokers and regulators for example. An ECN account will give you direct access to the forex contracts markets. So research what you need, and what you are getting. Leverage. For European forex traders this can have a big impact. Forex leverage is capped at 1:30 by the majority of brokers regulated in Europe. Assets such as Gold, Oil or stocks are capped separately. In Australia however, traders can utilise leverage of 1:500. That makes a huge difference to deposit and margin requirements. Australian brands are open to traders from across the globe, so some users will have a choice between regulatory protection or more freedom to trade as they wish. Just note that higher leverage increases potential losses, just as it does potential profits. Tools Or Features. From charting to futures pricing or bespoke trading robots, brokers offer a range of tools to enhance the trading experience. Again, the availability of these as a deciding factor on opening account will be down to the individual. Level 2 data is one such tool, where preference might be given to a brand delivering it. Education. Forex trading beginners in particular, may be interested in the tutorials offered by a brand. These can be in the form of e-books, pdf documents, live webinars, expert advisors (ea), courses or a full academy program - whatever the source, it is worth judging the quality before opening an account. Bear in mind forex companies want you to trade, so will encourage trading frequently.
Trading Platform. The trading platform needs to suit you. Whether you want a simple cut down interface, or multiple built in features, widgets and tools - your best option may not be the same as someone else's. Demo accounts are a great way to try out multiple platforms and see which works best for you. Remember also, that many platforms are configurable, so you are not stuck with a default view. Mobile Trading. Trading forex on the move will be crucial to some people, less so for others. Most brands offer a mobile app, normally compatible across iOS, Android and Windows. If this is key for you, then check the app is a full version of the website and does not miss out any important features. The download of these apps is generally quick and easy - brokers want you trading. Customer Service. Is customer service available in the language you prefer? Is there live chat, email and telephone support? When are they available? How high a priority this is, only you can know, but it is worth checking out. Asset List. Does the broker offer the markets or currency pairs you want to trade? A pretty fundamental check, this one. If you are trading major pairs, then all brokers will cater for you. If you want to trade Thai Bahts or Swedish Krone you will need to double check the asset lists and tradable currencies. Regulation. Do you want a broker regulated by a particular body - the FCA, SEC or ASIC perhaps? Remember European regulation might impact some of your leverage options, so this may impact more than just your peace of mind. We cover regulation in more detail below. Spreads Or Commission. Partly covered in trading costs, but the spreads are often a comparison factor on their own. This is because you are not tied down to one broker. If you trade 3 or 4 different currency pairs, and no single broker has the tightest spread for all of them, then shop around. There is nothing wrong with having multiple accounts to take advantage of the best spreads on each trade. Beware of slippage 'hiding' wider spreads too often.
Currencies Traded In Forex. Major. In the international forex day trading world, the vast majority of people focus on the seven most liquid currency pairs on earth, which are firstly the four 'majors': EUR/USD (euro/dollar) USD/JPY (dollar/Japanese yen) GBP/USD (British pound/dollar) USD/CHF (dollar/Swiss franc) In addition, there are three emerging pairs: AUD/USD (Australian dollar/dollar) USD/CAD (dollar/Canadian dollar) NZD/USD (New Zealand dollar/dollar) These currency pairs, in addition to a variety of other combinations, account for over 95% of all speculative trading in the forex market. However, you will probably have noticed the US dollar is prevalent in the major currency pairings. This is because it's the world's leading reserve currency, playing a part in approximately 88% of currency trades. Minor. If a currency pairing doesn't include the US dollar, it's known as a 'minor currency pair' or a 'cross-currency pair'. Hence the most popularly traded minor currency pairs include the British pound, Euro, or Japanese yen, such as: EUR/GBP (euro/British pound) EUR/AUD (euro/Australian dollar) GBP/JPY (British pound/Japanese yen) CHF/JPY (Swiss franc/Japanese yen) You can also delve into the trade of exotic currencies such as the Thai Baht and Norwegian or Swedish krone. However, these exotic extras bring with them a greater degree of risk and volatility. Finding The Best Forex Broker. The "best" forex broker will often be a matter of individual preference. It may come down to the pairs you need to trade, the platform, trading using spot markets or per point or simple ease of use requirements. Below are a list of comparison factors, some will be more important to you than others but all are worth considering. Details on all these elements for each brand can be found in the individual reviews. Lowest Trading Costs. Spreads, commission, overnight fees - everything that reduces your profit on a single trade needs to be considered. High frequency trading means these costs can ratchet up quickly, so comparing fees will be a huge part of your broker choice. Inactivity or withdrawal fees are also noteworthy as they can be another drain on your balance.